MacFormat 1996 July/macformat-039.iso/DATABASE/POWER/DEMING.TXT

Text File | 1996-01-29 | 24.0 KB | 532 lines | [TEXT/MSWD]

1.5
More than any one
man, Deming was
responsible for the
economic miracle of
Japan in the years that
followed the second
world war. His
revolutionary ideas had
been ignored in the US,
but Deming found an
audience among
Japanese business
leaders when in 1950
he was assigned by the
Allied Supreme
Command in Tokyo to help rebuild Japan's war-torn
economy. Deming advocated secure employment for
workers, an end to the divide between management and
the factory floor, and above all an emphasis on quality.
"We didn't really believe him" said one executive, "But we
did what he said in order not to lose face." Japanese
companies soon began achieving enormous success, and
Deming became the best-known American in Japan after
General MacArthur. Yet he remained almost unknown at
home. But by the late Seventies the US electronics industry
had been almost destroyed by such Japanese brands as
Sony and Panasonic, and it dawned on some US companies,
among them Ford and Xerox, that Deming might be right.
Under his guidance they eliminated cherished
management perks - private dining rooms and special
parking spaces - because Deming said workers found them
offensive. They were hard lessons to learn, but when they
bore fruit the western world, like Japan before, began to
listen. At the age of 80, Deming found himself deluged
with demands to act as consultant to the largest companies
in America. In 1987 President Reagan awarded him the
National Medal of Technology, which was presented in the
Rose Garden of the White House. It was a late vindication
for this curmudgeonly, frugal man who had for so long
been a prophet without honor in his own country
@
2.2
Politically and economically Japan has so far been in an
indeterminate and perhaps unrealistic frame of mind. She
has been living in a dream world of neutralism, cushioned
against the shocks of international events by the presence
of American "security forces" and by continued dollar aid.
The Korean war, fought on her doorstep, meant no more to
Japan than a chance to earn money by supplying goods
and services to the United Nations forces. The present
armistice is considered mainly in terms of the
opportunities it presents for making money out of the
reconstruction of Korea. Relations between Japan and
Korea remain as bad as ever, with disputes in progress
about fishing rights, property claims and the island of
Takashima.

Meanwhile, 85 million people, their number increasing by
more than a million a year must make a living in four
small islands which only a century ago supported no more
than 30 million. This pressure of population is the biggest
single factor in Japan's economic instability to-day; in the
past it was the driving force in her expansion. Because of
the mountainous nature of the land, only one sixth of the
total area is arable. Yet the people are so skilled in
cultivation that they produce four-fifths of their normal
food supply. Japan cannot produce much more food; the
alternatives are to import or to starve, large-scale
emigration being out of the question. The prime task
before the Japanese statesmanship is clearly to encourage
birth control by every legitimate modern means. Only
when Japan's population is stabilized will she cease to be a
menace to her neighbours.

The nation's greatest asset to-day, which accounts for the
rapid recovery from the moral and material devastation of
defeat in the last war, is the frugal and hard-working
nature of the people. Used to simple living, most of them
are content with little more than a wooden shack, the
minimum of clothing and a diet of rice, vegetables and fish.
(By contrast, in the cities there has been much rich living
and extravagance since the war.) Because of their capacity
for hard work, the Japanese live better than any other
Asian people and are as well off as some European ones.
The Japanese farmer or factory hand will work longer and
harder for less reward than his opposite number
anywhere in the world. The advent of trade unionism since
the war has made some difference to this but has not yet
seriously impaired it.

It is hard to say how deep anti-American feeling runs
among the Japanese. Certainly some people, such as
farmers and fishermen whose livelihood is affected by the
proximity of American bases, and families whose morals
are also affected by this, are critical of the need to
maintain an American garrison under the security pact.
Left-wing politicians and university students take
advantage of this and lead the clamour of "Yankee Go
Home!" But on the whole the sentiment of most Japanese is
more one of natural pride in their newly regained
independence than of active hostility to Americans.

The unpopularity of rearmament stems from the revulsion
of feeling caused by the losses of the last war, and
especially the use of the atom bomb, and from the pacifism
preached by the MacArthur regime in its early days. Yet
to-day Japan is being urged to rearm by the United States,
which is offering between $100m. and $150m, in aid in
condition that Japan enlarges her army.

If Japan is ever to regain economic stability she will have
to correct her present industrial shortcomings, among
them, too high costs, outdated production methods and
inflationary finance, and then find markets in Asia. Like
the rest of the free world, she will have to reach a modus
vivendi with China. That she will be a competitor of the
United Kingdom is inevitable; that she will undercut prices
as severely as she did before the war is unlikely. At the
moment she is struggling to reduce her export prices to the
level of world prices.

The Japanese people, faced with ideological and practical
problems as great as any in their long history, are striving
to safeguard their future. Notwithstanding Communist
blandishments, they are beginning to make up their minds
that their future lies with the free world. Their Emperor,
no longer a divine figure but still held in great respect, has
given them a sound lead. Right-wing diehards and former
military men have gained some ground lately, and may yet
prove a bigger menace than the Communists. But the
people have shown in two recent elections that they prefer
to follow the middle course in politics.

Their future depends upon whether their political leaders
can match the common sense of the voters with their own
foresight and moderation. Of these qualities the last
session of the Diet showed little evidence, being give over
to party manoeuvring, personal quarrels, and even
physical violence. At present there is much talk of a
possible coalition between the Liberal and Progressive
parties, but personal rivalry stands in the way. If a
coalition comes about it will make for greater political
stability in the coming years. But unless and until Japanese
leaders can show as much sense as the voters the future of
democracy in these islands remains doubtful.
@
2.3
Rousing company songs, physical jerks before the
production line starts up, bowing good morning to the
foreman ... these are some of the details which make the
Japanese way of work so extraordinarily different. But
there are differences which go much deeper than this.
Professor Ronald Dore and a team of British and Japanese
economists and sociologists have made the first detailed
analysis of these differences with a point-by-point
comparison of two Japanese factories and two British ones
making similar products - the Furusato and Taga factories
of Hitachi and the Liverpool and Bradford factories of
English Electric.

Work begins at 8am at Furusato. The whistle blows at
7.50am as the last stragglers come running in - office
workers and operatives indistinguishable in white, short
sleeved shirts, carrying their lunches in tins wrapped in
Japanese furoshiki cloth. Most people are already at the
bays where they work and have changed into working
overalls. Each has a badge on his breast-pocket giving his
department, his name and a very revealing number.
Number 580003 means the wearer was the third new
entrant to be registered in 1958. He belongs to the 1958
intake, say his managers, when discussing his promotion,
and whether he is moving ahead faster or slower than the
seniority norm.

Loudspeakers have been playing Liszt's Hungarian
Rhapsody. Suddenly this gives way to rhythmic piano
physical jerk music. With lesser or greater enthusiasm
everyone joins in five minutes of swinging, swaying and
bending. Afterwards they gather round their foreman,
bowing to each other and simultaneously chorusing "Good
Morning." The foreman offers the day's ration of
reminders, tips and hints destined to keep people up to the
mark, to remind them where things can go wrong if they
are not careful. Then comes work allocation. The foreman
remarks on the absence of one of his team. A readjustment
is made.

At Bradford and at Liverpool work begins more gradually.
Hourly rated men and staff are clearly distinguishable.
Manual workers generally wear boiler suits. The collars
and ties belong to office workers or foremen. Fifteen
minutes before the Liverpool hooter blows a good many
people are at their benches. There is an air of relaxation. A
few men are cleaning their tools, most are reading a
newspaper, chatting. A small group of women is brewing
the day's first cup of tea. After the hooter the pace of
movement increases; the noise level rises as machine after
machine is switched on, but it may be still some time
before things are fully under way. At 8.30 am the foreman
takes stock. Eleven of his 45 workers are missing.

The day is not typical because it is a Monday, there is a
bus strike and it is raining. In all probability, says the
foreman, those who have been walking to work since the
strike looked out in the wet half-light of the morning and
asked themselves if they really needed a full wage packet
the following week, said "Oh, sod it" and went back to bed.

There is a lot to be said for the reasonableness, mutual
consideration, co-operativeness and orderliness with which
the Japanese manage their affairs, but they pay a heavy
price in the sacrifice of individuality, of independence and
of those other enjoyments besides pride in work which can
bring happiness. The British manage to preserve these
virtues better, but in preserving them they too pay a
heavy price in suspicion and bad-tempered obstinacy, in
inertia and in a shifting mixture of complacency and
national self doubt.

One of the most striking characteristics of the Japanese
employment system is lifetime commitment: the fact that
almost the only way to get into big firms, the elite half of
the industrial structure, is at the beginning of one's
working life. Once in a worker expects to stay until
retirement, whereas entering English Electric involves a
much less permanent commitment with a relatively high
rate of job mobility for both workers and managers.
Hitachi is a typical big Japanese firm: low labour turnover,
wages determined more by seniority than by function, and
its workers belonging to the same house, or enterprise
union.

It is the sort of firm which has given rise to the popular
assumption by westerners (as well as some Japanese) that
the Japanese are only suffering from a slightly prolonged
form of industrial immaturity - that sooner or later they
will shed their abberations and become like us.
Paternalism, runs the argument, is characteristic of labour
relations in immature economies more marked to Japan
because a fully fledged feudal past was so recent; which is
why it has persisted to a more advanced stage in the
country's development.

Eventually therefore, it is bound to give way to a kind of
system of the Anglo-American kind - impersonal, market
determined, fluid, where the concept of loyalty has little
place and the notion that it should override material
interests has none; a system which is achievement-based
and which ignores such irrelevant characteristics as an
employee's age; a system in which workers are committed
to a craft, a way of life, a labour market and not over-
committed to a single firm; a system in which trade union
loyalties transcend corporation boundaries.

Dore believes the theory is at fault in assuming that the
market-orientated forms of work organisation developed
in the early industrialising countries are permanent, part
of a state of modernity which, once reached, is never likely
to be abandoned. He argues that they are giving way to
organisation-orientated forms where conditions of
employment are less and less influenced by consideration
of the price a worker might get from another employer in
the external market, more and more fitted into an internal
structure of relative rankings peculiar to the enterprise
and predicated on the assumption of stable long-term
employment. In short there are signs that the British
system is getting more like the Japanese, instead of the
other way about.

Late starters, of course, do have some advantages - Japan
in ship-building after the Second World War, her yards
destroyed and unencumbered with the 19th-century
machinery which cluttered Clydebank. There is also a late
development benefit in social technology - educational
systems, and methods of personnel management.
Furthermore ideologies which, although originally the
consequences of an advanced stage of industrialisation in
the societies in which those ideologies first appeared, can
have an independent life and force of their own when
diffused to those just beginning industrialisation. By this
process late developing countries can get ahead - can show
in a more developed form, patterns of social organisation
which in the early starters, are still emerging, still
struggling to get out from the chrysalis of 19th-century
institutions.

The gap which remains between the British and Japanese
employment systems after a decade of rapid growth and
increasing labour shortage is large enough, and the union
structure and the pattern of company welfare seems
sufficiently firmly entrenched, to hazard a guess that in
1990, Japanese workers will still be hired, promoted, paid,
trained and socialised in a distinctively Japanese way.

Such as is enshrined, for instance, in a document called the
"Guiding Spirit of Hitachi" which sets down the company's
key principles to its employees as: sincerity of heart and
mind, a spirit of forward looking positivism and a spirit of
harmony.

It also appears in the Hitachi Song (the firm's, not the
union's) which goes:

Over hill, over valley, each calls and each responds.
We are united and we have dreams,
We are Hitachi men, aroused and ready
To promote the happiness of others.
Great is our pride in our home-produced products.
Polished and refined our skills.
@
2.4
In Hitachi the foreman's role is intended to be much more
like that of any army sergeant's than like that of a British
foreman.  He is usually referred to as "the old man" (oyaji
is also a common way of referring to one's own father).  He
is the natural person for a young man to ask to be a
ceremonial go-between at his wedding or to play an even
more important role and actually find a bride for a young
man.  He would be the natural person to ask to be master
of ceremonies at a parent's funeral if one did not have any
convenient uncles.

Similarly, as paterfamilias, the foreman presides over the
team's communal leisure activities - outings and drinking
parties for the spring cherry-blossom viewing, a mid-
summer "cool-in" (an evening river-bank party, preferable
with municipal fireworks display, farewell parties for
someone going to erect a generator abroad, victory parties
when the group's team wins a soft-ball competition,
celebrations of some notable work achievements or just
straightforward "social parties."  Apart from such
occasions, bachelors may make up a group of three or four
to buy a bottle of rice-wine and go to "assault" the foreman
at home - i.e. boisterously demand that he invite them in
to share their (and subsequently, in larger measure, his)
wine.

To be a foreman, as to be the patron in any kind of patron-
client relationship in Japanese society, is not in-expensive.
This is recognised by the firm in a little something extra on
the mid-summer and year-end bonuses; otherwise the
only other compensations are the flattery the system
offers his ego, and the gifts he may receive from his
subordinates when they come to pay their new year
respects.  New year is a time for a hectic round of gift-
giving, calling particularly on anyone - superior or
colleague - on whose goodwill one depends.  The standard
greeting formula is; "during the last year you have been
very good to me.  I hope I can count on you again this
year."
@
3.2
I have learned from experience that if an organisation is to
commit itself to the quality process, the senior
management must commit to it just as rigorously as the
rest of the company, W Edwards Deming, a leading
authority on total quality, is unequivocal when he states
that quality is made in the boardroom.

Quality is not a public-relations exercise, nor is it some
kind of training programme provided by the human-
resources department.  Total quality means a
transformation of the whole philosophy of the company. It
is a measurable process; it makes individuals accountable
and, by definition, it is unforgiving.  This is often
underestimated.  A process that forces a company to
scrutinise and improve such functions as management and
leadership, strategic planning, employee involvement and
recognition, the quality of its products and services and
customer satisfaction is no facile commitment.  It demands
different attitudes and approaches.

Executive management must explain to an organisation
that the quality process will mean a shift upwards in
standards, and that performance is going to be measured
against those standards.  Once they understand what total
quality means to the organisation, executive management
has begun to do its job.

It is management's responsibility to be accountable for the
success or failure of total quality.  If the process does go
wrong, it is executive management that has to listen and
take action.

All too often, I hear examples of companies making
excuses.  "After all," they will say, "didn't we make several
fine presentations to our people about quality; didn't we
talk to them seriously about it and surely they read the
booklets and brochures we supplied them?  But why is it
they didn't get the message, why is it we are not making
progress; not improving?"  The answer is often executive
management.

Executive management may be committed to good internal
communications.  It may have agreed to some training.  It
may well have invested a little money in the exercise and
it will almost certainly have hired a consultant or two.
What executive management has not done is commit itself
wholeheartedly to being the foundation on which the
whole company's quality approach is built.  Executive
management has the responsibility to communicate, to
lead by example and to put the quality process in place.  It
must also be accountable for the end result.  But there are
many examples of good practice, where leadership from
the top is clear and unambiguous.

In an increasingly competitive world, following the
principles of quality makes sound economic sense.  I am
not deterred by the fact that total quality is so difficult to
implement.  In fact, I am grateful that it is.  Were it easy,
everybody would have it in place.  The fact that it is so
difficult presents considerable competitive and commercial
advantage to those companies that persevere and achieve
it.

I recall the story of a leading Japanese industrialist asked
to comment on whether the numbers of American firms
rushing to introduce TQM would pose a commercial threat
to Japanese companies.  His reply was that it would take
American companies 10 years to get the process working
properly, by which time Japan would have zero-defects
management in place and be 15 years ahead again.  That
really is competitive advantage.  Viewed in those terms,
total quality makes hard commercial sense and if it
becomes an integral part of the longer-term strategic-
planning process, along the lines of the Japanese
experience, it will clearly have a positive impact on a
company's bottom line
@
3.3
In the past three years I have visited 70 British companies
and had long talks with another 80. The experience has
filled me with optimism. This is mainly because of the
"total quality" movement, which is transforming the way
business is done.

In total quality, people "learn through the job" to do
everything better all the time. "Continuous improvement"
is the watchword. It is no longer a question of "We've
always done it this way", but rather, "There must be a
better way."

I went on to study quality in depth and continued seeing it
in practice in companies where I had first seen its power.
In the old days, and still in some places, people came to
work to do as they were told. They were supposed to park
their brains at the factory gate. Thinking was for
management.

What could I say that would bring total quality to a wider
public as well as being of some use to those responsible in
companies?

Reflecting on my tour of British industry and reading the
works of the gurus, W Edwards Deming, Joseph Juran,
Philip Crosby and others, it became obvious to me that this
quality business is no mere technique for making better
goods and providing better services.

It is nothing less than a revolution in the management of
business. It is bound to be if quality means "fitness for
use" (Juran) or "delighting the customer" (Deming). Surely
there are no other aims for businesses that want to
succeed. But it does mean turning things upside down, a
new mindset and death to a lot of traditional attitudes. It
means:

- liberation to people at work whose talents are recognised
and utilised: restoring pride in workmanship.

- involving everyone in the search for continuous
improvement in everything by everybody, individually
and collectively.

- banishing fear of using initiative; eliminating
management by blame.

- teaching all employees basic statistical process control, so
they can build quality into the job first time.

Getting rid of status divisions, such as different
arrangements for pensions, car-parking, eating and sick-
pay and everything else that implies that some people are
superior and others are subordinates (at Bosch in Cardiff,
two words are banned: "semi-skilled" and "unskilled").

Self-directed work teams, which run their own day-to-day
affairs, with coaching from a team leader who is trained to
listen.

Breaking down departmental barriers that waste so much
time because people look after their own patch and don't
see the total picture.

Organising work on the basis of a co-operative chain of
suppliers and customers, both externally and internally:
everyone is a customer awaiting results from a supplier;
everyone is a supplier too; all depend ultimately on
satisfied end-customers.

Working in partnership with outside suppliers, not trying
to screw them down on price or continually changing them.

Recognising that quality exceeding customer expectations
gives competitive edge and saves money, especially if you
take into account all the indirect administrative costs and
paying people for doing the same job twice.

Training people who are face to face with customers,
especially with external ones, on how to win their loyalty
and meet their problems with courtesy and understanding.

Above all, quality means co-operation instead of
confrontation; it means respect for suppliers, customers
and employees in place of treating them essentially as
means to your own ends; it means the ability to stand in
others' shoes and act accordingly.

You see why I say this quality business is a revolution. It
changes everything we do when we focus on delighting the
whole chain of customers, not least the consumer at the
very end.

It's happening. The quality revolution is changing
everything in some organisations. It's a matter of doing
what Deming said: "Put everybody in the company to work
to accomplish the transformation. The transformation is
everybody's job."