Out of the Crisis - A New Paradigm for Managing People, Systems and Processes - Deming E. Edwards Deming "Out of the Crisis

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Business Book Description:

This book is for those who have already understood that business cannot be done by traditional methods, because the world has changed. Edwards Deming, an outstanding consultant of the 20th century, one of the authors of the "Japanese economic miracle", throws an intellectual and moral challenge to the stereotypes of traditional management. His revolutionary theory offers the philosophy, methods and management technologies necessary to build a sustainable, efficient business that balances the interests of all stakeholders: consumers, employees, owners, suppliers, society as a whole. The proposed principles and concepts are illustrated by numerous examples from various industries industry, services and management. The book will be of interest to managers of all levels, entrepreneurs, engineers and technicians, as well as teachers and students of organizational, managerial and engineering specialties.

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Edwards Deming. Out of the Crisis: A New Paradigm for Managing People, Systems and Processes

Today I want to introduce one of my favorite books: Edwards Deming. Way out of the crisis: A new paradigm for managing people, systems and processes. – M.: Alpina Publisher, 2011. – 424 p. By the way, the book is included inThe 100 Best Business Books of All Time(according to Jack Covert and Todd Sattersten).

What is so great about this book? In my opinion, it provides the most powerful theoretical and partly practical groundwork for practicing managers in the question, what is the management of our organizations, on what fundamental principles should it be based. Many spears have been broken around Deming's fourteen principles of management, which, again, in my opinion, should not be approached dogmatically. If you defend these principles "with foam at the mouth", then how will Deming's followers be better than any other dogmatists!? Time passes, and dogmas (principles) cannot remain unshakable. At the same time, the next two pillars of Deming's teaching - operational definitions and understanding of variability - will survive the centuries!

So…

Foreword by science editors

When applied to business and social tasks, operational definitions of key concepts make it possible to prevent huge economic losses and help reduce risks. Operational definitions are of great importance for achieving mutual understanding and joint cognitive activity of people. … Trying to understand the reasons why managers around the world tend to reproduce the stereotypes of a primitively simplified (“reflexive”), confrontational style of management, Deming came to the conclusion that the root of the problem is the lack of the required knowledge about the patterns of formation of the effectiveness of socio-economic systems.

Blindly following a certain principle, copying successful way action potentially poses a threat. Successful management in such systems is guaranteed only if in their actions the subjects of management are guided by the continuously developing "model of the world". It is possible to present such a model of the world for management in different forms. Historically, the famous 14 points of Deming - the Program of Action for American Manufacturers - became the first such form. In subsequent years, Dr. Deming created a new, even more general version of the organizational "model of the world" - a system of in-depth knowledge - scientific concepts and principles that are conditionally grouped into four main areas: understanding the system properties of organizations, the doctrine of optimal management methods in conditions of variability (variability a) processes, objects and environment; elements of the theory of knowledge; bases of knowledge about individual and group psychology.

Bankruptcies are usually cited as high costs of starting a new business project, exorbitant costs, devaluation of excess inventory, competition - anything but the actual reason - simple and clear - bad management.

Chapter 1.Chain reaction: quality, productivity, cost reduction, market penetration

The purpose of this chapter is to point out the presence of a stable system of problems on industrial enterprise and explain why, when the system is stable, management is responsible for improving quality. …the common belief is that quality and quantity are incompatible - you can't have both at the same time. Those who claim this do not know what quality is and how to achieve it.

A clear and compelling answer to the question, “Why does productivity increase when quality increases?” (Fig. 1):

· Less rework.

· Not many losses.

Rice. 1. Better quality leads to higher productivity

Quality for a production worker is, first of all, an opportunity to get satisfaction from work, to be proud of one's skill. By improving quality, we turn wasted man-hours and underused machine time into superior products and superior services.

What happens when we improve the quality? An illustration of the increase in productivity against the backdrop of improved quality:

Indicator	Before improvement (11% defective products)	After improvement (5% defective products)
General costs
The cost of producing quality products
Cost of manufacturing defective products

What could management do? The manager and two foremen worked out a single criterion and got to work. After seven weeks of trial and error, they developed operational definitions, prepared samples of acceptable and unacceptable products, and put them on public display. This is an example of the productivity gains associated with changing the system itself, namely by refining the definitions developed by management in order to make the process easier to do rather than complicate it (Fig. 2). The next step is to get rid of 5% of defects.

Rice. 2. Reducing the defect rate after the introduction of an operational definition of what work is considered acceptable

If I were a banker, I would not lend money for new equipment until the company applying for a loan provides statistical evidence that it is fully exploiting the potential of existing equipment ...

Chapter 2

Guiding questions and comments from Lloyd Nelson (Director of Statistical Methods at Nashua Corporation):

1. The central problem of management is the lack of understanding of the meaning of variability and the inability to extract the information that it contains.

2. If you can improve productivity or sales or quality or whatever by (say) 5% in next year without a logical improvement plan, why didn't you do it last year?

3. Most important factors, needed to manage any organization, as a rule, are unknown and quantitatively indeterminate.

4. In a state of statistical control, the response to the appearance of any defect will be ineffective and will create new difficulties. What needs to be done is to improve the process by reducing variability or changing the mean, or doing both. Studying the sources of product properties from the very beginning of the production process provides a powerful lever for improvement.

“...and if you can’t come yourself, then don’t send anyone”

These are the words from a letter written by William Conway (President and CEO of Nashua Corporation) to one of the Vice Presidents in response to a request to send him an invitation to visit Nashua Corporation. With this phrase, Mr. Conway said that if this person does not have time to do his job, then he cannot do anything for him.

14 points for management

1. Achieve a constancy of purpose - continuous improvement of products and services to achieve competitiveness, save business and create jobs.

2. Accept new philosophy. We are in a new economic era. Western management must accept the challenge and realize its responsibility by becoming a leader of change.

3. End dependency on quality control. Eliminate the need for mass inspections by building quality into products first. Quality is not created by testing, but by improving the manufacturing process.

4. End the practice of judging and selecting suppliers based on price alone. Instead, minimize overall costs. Strive to find a single supplier for each type of supply based on long-term relationship loyalty and trust.

5. Constantly and continuously improve the production and service system to improve quality and productivity, and thus continuously reduce costs. Extinguishing the fire does not mean improving the process. Identification and elimination of special causes of variation, determined by points that go beyond the boundaries of the control chart, is also not an improvement. This is simply returning the process to where it should have been from the very beginning.

6. Enter on-the-job training.

7. Establish leadership. The job of management is not oversight, but leadership. The goal of managers should be to help people, improve machines and fixtures so that they work better. It is necessary to reconsider the methods of management in relation to both managers and production workers.

8. Cast out fear so everyone can work more effectively for the company.

9. Break down barriers between departments. Employees in research, design, sales and manufacturing must work as a team to anticipate possible problems in the production and operation of products and the provision of services.

10. Reject slogans, slogans and goal setting for workers demanding "zero defects" and going to new level performance. Such appeals only generate hostility, since in most cases low quality and productivity are at the mercy of the system and, therefore, are beyond the control of the workers. Management, of course, wants to see higher productivity and fewer defective products. Their method is to call on the workers to work better. The poster is addressed to the wrong people.

11. a) Eliminate quantitative norms and tasks for workers in the shop. Replace them with leadership.

6) Eliminate management by goals. Stop managing by numbers and quantitative results. Replace it with leadership. To manage, you need to be a leader. To be one, you must understand the work for which you and your people are responsible. Who is the consumer (next step) and how can we best serve them? The beginning manager must learn to become a leader and manage the sources of improvement. He has to learn from his employees about what they do, as well as a lot of new things. It's much easier, however, to cut corners, save on the required knowledge, and focus on the end of the process to manage output with quality reports, failure rates, defective rates, inventory, sales, and people. However, focusing on the output is not an effective approach to improving a process or activity.

12. a) Break down the barriers that deprive regular workers of the right to take pride in their workmanship. Absenteeism mostly lies on the conscience of management. When people feel they are needed at work, they go there. Masters should be responsible not for numerical indicators, but for quality.

6) Break down the barriers that deprive managers and engineers of their pride in their craft. This means, among other things, the abandonment of annual evaluations or ratings and management by objectives.

13. Establish a broad program of learning and self-improvement.

14. Get everyone in the company to work together on a fundamental change. Transformation is a job for everyone (Figure 3).

Rice. 3. Shewhart cycle (aka Deming cycle, cycle PDCA : plan, do, check, act)

Chapter 3

A. List of deadly diseases

1. Lack of constancy of purpose in designing products and services that will keep the company in business and provide jobs.

2. Short-term focus: short-term thinking (which is completely inconsistent with the persistence of the goal of maintaining a business), fueled by the fear of a hostile takeover and pressure from bankers and stockholders.

3. Certification and ranking of personnel. Counting is the path to degradation. One of the main outcomes of performance evaluation is support for short-term thinking and short-term performance. A person must have something that he can submit for evaluation. His boss needs numbers. It's easy to count. And calculations free management from the need to develop meaningful indicators.

4. Jumping managers from place to place.

5. Management based only on known quantitative criteria.

Actually the most important numbers needed by management, are unknown and quantifiable, but successful management must nevertheless keep them in mind. For example:

1. The effect of multiplying sales if your customer is delighted, and the reverse effect of a disappointed customer.

2. Improvement in quality and productivity at all stages of the process with a successful improvement in quality at any previous stage.

3. Increasing the quality and productivity of the company, in which management clearly shows that its policy is to keep the company, adapting to the market, and that such a policy is unshakable towards everyone.

4. Improvement in quality and productivity as a result of continuous process improvement, as well as due to the rejection of production standards and better education or better leadership.

5. Improved quality and productivity with a team consisting of representatives from the selected supplier, purchasing, designers, sales, and a customer company that has developed a new component or redesigned an existing part.

6. Improving quality and productivity due to the teamwork of technologists, manufacturers, salespeople and representatives of the consumer company.

7. Losses due to annual appraisals.

8. Loss due to barriers that prevent employees from being proud of their skills.

9. Where in a trucking company can you find numbers that indicate losses from running empty or from improper maintenance?

B. Obstacles

· Hope for instant pudding

· The assumption that by solving problems, introducing automation, fixtures and new equipment, we will transform the industry.

· Looking for examples... Copying is risky.

· "Our problems are different"

· Outdated programs in educational institutions

· Insufficient training in statistical methods in industry.

· Use of military standard and other tables for sampling acceptance control.

· "Our quality control department solves all quality problems."

· "We have implemented quality management." Anyone who talks about “implementing quality control” unfortunately knows little about what it is. Quality and productivity improvement, to be effective in any company, must take the form of year after year learning led by top management.

· "Dehumanized" computer.

· Belief that you just need to get into the admission. The programmer has a similar problem. Upon completion of the work, he learns that he wrote an excellent program that meets the TR, but the TR itself was not perfect. If only he knew the purpose of this program, he might have made it fit for that purpose even with imperfect TRs.

· The fallacy of the "zero defects" theory.

· "Anyone who comes to try to help us must have an excellent understanding of our business."

Quality circles can never replace the unwavering responsibility of management to redefine its own role and reshape the corporate culture.

Chapter 4. When? How long?

Catch up? People wonder how long it will take America to catch up with Japan. This is a relevant but misunderstood question, born of misunderstanding. Will the Japanese sit back and wait for someone to catch up with them? How can you overtake someone who is constantly picking up speed? Now we know that it is not enough just to defend against competitors. Those who hope to get by with "building bastions" have already lost.

Chapter 5. Questions to Help Managers

This chapter contains questions that may give management some basis for understanding its responsibilities.

Chapter 6. Quality and the consumer

Quality should be measured as the result of the interaction of three elements (Fig. 4)

Rice. 4. Three corners of quality

Chapter 7 Quality and Productivity in Services

Everything we have learned about the 14 points and the diseases of management applies to both production organizations as well as to service companies. In this chapter, we will focus on the service industry. The Ishikawa Chart (Figure 5) helps us find our goal to stick to day by day in a typical service company.

Rice. 5. Components of customer service costs electric company(Ishikawa's "fish skeleton" scheme)

Chapter 8 Some New Principles for Teaching and Leadership

The goal of leadership.Leadership should be aimed at increasing the productivity of people and machines, improving quality, increasing output, and at the same time making people feel proud of their work. Formulated in denial, the goal of leadership should not be to discover and fix the person's faults. Eliminating the causes of errors is what will help people do better work with less effort. The leader is also responsible for improving the system, that is, he creates opportunities for everyone to constantly improve their performance and enjoy work more and more.

Obviously, it is extremely important to train new people to do their job well as soon as they start it. As the learning curve flattens out, the control chart will show if and when the learner has reached a state of statistical control. Once he has reached this state, further training by the same method will not give anything. If the work of a person is far from the state of statistical controllability, continued training can still bring an effect.

Should you tell the worker about the mistake? Consider:

1. Has the operational state of statistical control been reached? or

2. The worker has not reached the state of statistical control.

First, let's talk about the first worker. In a state of statistical control, the answer to the question must be negative. Unless his chart shows the presence of a particular cause of variation, in which case he should have already noticed it on his control chart and eliminated it. The underlying principle suggested here is that no one should be blamed or punished for outcomes that they cannot control. Violation of this principle can only lead to disappointment and dissatisfaction with the work and, as a result, to a decrease in the level of production.

An example of erroneous control . Erroneous control leads to three types of problems: 1) frustration of production workers; 2) misinterpretation points on the control chart; 3) defective products are delivered to the consumer.

The method of dealing with control errors is the operational determination of what is acceptable and what is not. The operational definition includes the test method, example, and criteria by which a decision is made as to whether a piece of work can be classified as defective or acceptable. An operational definition is a definition whose meaning can be communicated to others; it is a language through which people can understand each other.

Chapter 9. Operational Definitions, Compliance, Efficiency

According to many industrialists, nothing is more important to business than operational definitions. Everything meaningful begins in the human brain with concepts (thoughts, ideas, images). The only way to convey the meaning of any word, prescription, instruction, specification, indicator, property, regulation, law, system, decree is through a description of what happens when a certain operation or test is performed.

An operational definition allows a concept to be given a definite form that is clear to everyone. The meaning of such adjectives as “good”, “reliable”, “homogeneous”, “round”, “tired”, “safe”, “unsafe”, “unemployed”, cannot be conveyed until they are expressed through operational terms of samples, tests and criteria. The concept of an ordinary definition is inexpressible: it cannot be communicated to anyone. An operational definition is one with which man of sense may agree.

Operational definitions include:

1. Specific test method for a sample of a material or subassembly

2. Criterion (or criteria) for making a decision.

3. Decision: yes or no, the object or material meets or fails the criterion(s).

Practice is more precise than pure science; more accurate than learning. According to Shewhart, the standards of knowledge and skill required in manufacturing and service industries are more stringent than those of pure science. Without operational definitions, problem research will be costly and inefficient, almost certainly leading to endless debate and controversy.

Chapter 10. Standards and regulations of state bodies

I oppose the proposal to transfer the standardization function to the government. It's not a flexible system. It does not allow one of the manufacturers to deviate from the standard in order to create a specialized and useful business. Standards created under such conditions usually take the form of containment, control, and limitation procedures. They narrow the choice for consumers.

Chapter 11. General and specific causes of variation and opportunities for improvement. stable system.

The main problem of management and leadership, according to my colleague Lloyd Nelson, is the inability to interpret the information contained in the variations. …the actions required to reduce the special causes of variation are fundamentally different from the actions required to reduce the number of variations and errors caused by the system itself. Managers must understand why as quality improves, costs decrease. It is very important for industry and science to understand the difference between a stable and unstable system and how to correctly present data in order to make a reasonable conclusion about whether the system is stable.

The control chart indicates the existence of causes of variation that lie outside the system. She does not disclose the reason. Accordingly, the first step in examining data is to understand whether it is obtained in a state of statistical control. The easiest way to analyze data is to arrange the points in the order in which they appear to see if there is any benefit to be gained from the distribution generated by the data.

On fig. 6 shows the distribution of the results of measurements of 50 springs of the same type used in a camera of a certain type. The springs were measured in tension under a force of 20g. The distribution looks pretty symmetrical... Any attempt to use the distribution shown in fig. 6 is useless. For example, calculating the standard deviation for a given distribution will not provide a value that can be used for prediction. It says nothing about the process because it is unstable.

Rice. 6. Normally distributed but statistically uncontrolled data

A process is reproducible only if it is stable.

A common mistake in interpreting observations is to assume that every event (defect, error, accident) can be attributed to someone (usually someone at hand) or linked to some particular event. The fact is that most of the problems of the service sector and production are connected with the system. Sometimes the defect is really local and can be attributed to the incompetence or laziness of the worker. We will call system defects general causes, and defects associated with transient, fleeting events, special causes.

The confusion of general and special causes leads to disruption of plans, to greater variability and increased cost. Based on my own experience, I can give the following assessment for most problems and opportunities for improvement:

· 94% of problems belong to the system (management responsibility);

· 6% of problems are special.

Good management and good control presuppose the ability to make calculations to separate the two types of causes.

We can now formulate two sources of waste arising from the confusion between specific and general causes of variation.

1. Attributing variation or error to a particular cause when in fact the cause belongs to the system (general causes)

2. Attributing variation or error to a system (general causes) when in fact that cause is a particular one.

regulation is common feature mistakes #1. Inaction, instead of looking for a specific cause, is a common symptom of error #2.

Shewhart recognized the fact that even good managers make mistakes of one kind or another from time to time. He realized that practical rules were needed to try to minimize the net economic loss caused by both types of errors. To this end, he calculated three-sigma control limits. They, in a wide range of future and past unknown circumstances, provide sound and economical guidance for minimizing the economic loss from both types of errors.

A stable process, that is, one in which there are no signs of special causes of variations, following Shewhart, is called statistically controlled, or stable. In the state of statistical control, all special causes previously identified have already been eliminated. The remaining variability is determined by chance, that is, by general causes, unless a new special cause suddenly appears. This does not mean that we have nothing to do in a state of statistical control, just that we should not overreact to booms and busts, such a reaction will only lead to additional variations and increase the number of problems. The next step is a continuous effort to improve the process. Process improvement is effective only when a state of statistical control is achieved and maintained.

Funnel Monte Carlo experiment. A frightening example of rule 4 is in the training of a new employee. This newcomer in a few days himself teaches the next newcomer. At the same time, the methods that are taught degrade indefinitely. But who knows about it?

Control limits are not tolerance limits. The control limits, as soon as we have really reached the state of statistical controllability, characterize this process and give a forecast for tomorrow. The control chart is the voice of our process. The distribution of a quality characteristic that is in a statistically controlled state is stable and predictable, day after day, week after week. Output and costs are also predictable. Now you can think about the kanban system or just-in-time deliveries.

Moreover, as William Conway pointed out, engineers and technologists become more inventive, more creative, take more initiative to improve the process, as soon as they see that it is in a statistically controlled state. They feel that further improvement is their job. Without statistical methods, attempts to improve a process are guesswork, which usually only makes things worse.

Two Main Ways to Use Control Charts

1. To make a judgment. Was the process (in the past) in a statistically controlled state?

2. To justify action (continuous). The control chart can also be used to achieve and maintain a state of statistical control during production. In this case, the process has already been brought to a statistically controlled state. We propagate control limits into the future, and plot points one by one.

It is sometimes useful to build a control chart for each member of the work team. The worker, seeing a point outside the control limits, can almost always immediately identify the special cause and rule it out. Such a map is analyzed only by the worker and his immediate supervisor.

There are many misconceptions about reproducibility. It is absolutely wrong, for example, to take a certain number of products, for example 8, 20, 50 or 100, measure them and use 6 standard deviations obtained from these measurements as a measure of process reproducibility. The first step should be to analyze the data using a process flow chart to decide if the manufacturing process and measurement system demonstrate statistical controllability. If so, then the reproducibility of the process will be evident from the control chart. If not, then reproducibility does not exist.

The experiment with red beads is so characteristic that it is described separately.

Statistical control does not exclude the presence of defective products. Statistical control is a state in which variations are random and stable in the sense that their limits are predictable. The process may be in a statistically controlled state, yielding defective products. By itself, the statistical controllability of the process is not the ultimate goal. Once the process is stable, serious work can be done to improve the quality and economy of production.

An example of misunderstanding. The line of action is mapped based on judgment, not calculation. As we have learned, the limits on the control chart are about what to expect from the process, not what we would like it to be. Suppose a worker plots a line on a map showing the percentage of defective items per day. He draws (for example) a line at 4%, which he thinks would be a reasonable target. He showed me a point high above this line. Here, he said, is a point that has gone out of control. "Where are your control limit calculations?" I asked. “We don't count; we're just putting the line where we think it should be." Unfortunately, some textbooks mislead the reader into allowing control limits to be set based on tolerances or other requirements.

People are part of the system ; they need help. While management is responsible for the system, or the lack of it, I own experience convinced that few people know what constitutes a system. When I talk about a system, many people think of hardware and data processing. Few people know that hiring, training, supervising and assisting production workers is part of the system.

Chapter 12

Examples are given, emphasizing that the responsibility for improving the system lies with management, which is obliged to understand the situation and act according to the circumstances.

Chapter 13

For every problem there is a solution: simple, elegant and wrong
(Perhaps borrowed from H. Mencken)

The examples in this book show that people do not understand four fundamental principles:

· Several points in a group must be above the group average.

· Not all points will lie on the midline (except for rare coincidences).

· It is rare that the state of statistical control is accompanied by variations in quality and quantity, however, jumps of points up and down satisfy the criterion of randomness. In other words, variations are stable. Controlled quality characteristic is stable, constant; it plays hour after hour. Responsibility for reducing variation and for more suitable value the point of adjustment lies almost entirely with management.

· There are not only special, but also general causes of losses and variations due to the system.

Chapter 14

This chapter contains two quality audit reports prepared for the management of the company, which describe its real problems and give recommendations for their elimination. …the obstacle is the management's belief that production workers are responsible for all problems because they are doing their job wrong. The natural reaction of people to any production problems is to blame the operators. In my experience, most production problems stem from common causes, which only management can solve or reduce.

As for special reasons. I found that your company does not have a system feedback with the production worker, by means of which he is informed when he himself must act in order to improve his work. Special causes can only be detected with the right statistical methods. In order for workers to master statistical tools, extensive training is needed. You have to train hundreds of workers to use simple control charts.

The production worker, when he reached the state of statistical control, had already put everything he had into the process. It is the responsibility of management to provide greater uniformity of input materials, greater uniformity of upstream operations, better equipment setup, better maintenance, process changes, sequence changes, or some other fundamental change.

…despite the abundance of numbers that are given so much attention in your company, you do not discover the root causes Bad quality. Expensive computers processing a lot of data will not improve the quality.

Mention should also be made of the misconception that many managers have, namely that in order to work with a process, the consultant must know everything about it. Practice shows the opposite. A competent person in every place, from the worker to the top management, knows everything about his work, except for how to improve it. Help to improve can only come from outside.

Chapter I5. Plan to minimize the average cost of control of incoming materials and finished products

The principle of input control "all or nothing" is described separately.

The above theory applies to a bank, a department store, a trading company with payroll errors, and most other situations. The flow of work moves from stage to stage, the end point is the consumer's account, or the numbers on the check, or the report. The work may go through several stages before the error is discovered. By this point, the cost of fixing it could be 20.50 or 100 times the cost of finding it and fixing it at the point of origin.

Finding errors in service operations is perhaps even more difficult than in manufacturing. The verifier can detect only half of the mistakes made, or in best case two out of three. My experience is that parallel work of employees and comparison of results with the help of a machine is the only satisfactory way to check critical work.

The consensus that results from a discussion in which people are not afraid to speak their mind and ask questions, speaks of a healthy team spirit and benefits through interaction and learning from each other. Unfortunately, agreement at the control stage or elsewhere can only mean that one imposes his opinion on the other.

Chapter 16

The main problem of management, leadership and production, as my friend Lloyd Nelson formulated it and as we have emphasized in previous chapters, is a misunderstanding of the nature of variation and an inability to interpret them. The efforts and application of methods to improve quality and productivity in most companies and government agencies are fragmented, do not require an overall competent leadership, nor a coherent system of continuous improvement. Everyone, regardless of their position, needs training and development. In an atmosphere of fragmented efforts, people move in their own direction, not being able to bring great benefits to the company, and even more so to develop.

Companies stock up on material components but ignore the need for knowledge.

Chapter 17

The reader must have noticed with what tenacity, page after page, I called for clearly defined terms of reference and work instructions.

Data on incidents does not affect the reduction in their number. The first step to reducing the frequency of incidents is to determine who or what causes them: whether the system is at fault, or a specific person, or a certain set of conditions. Statistical methods provide the only true way to analyze the nature of incidents and reduce their number.

People tend to look for the culprit directly at the scene. The typical reaction of almost every person to unpleasant event- attribute it to someone else's negligence or equipment failure. It is wiser to refrain from hasty conclusions that are fraught with an incorrect conclusion, it is wrong decision, continued troubles, an increase in the number of incidents. The system ensures that the average number of incidents (by location and time) is unpredictable.

Appendix. Transformations in Japan

Serious passions rage around the writing of the author's name ... J On the one hand, the websiteDeming Associationsthe name is spelled Edward. On the other hand, in English spelling there is definitely a letter s-Edwards . Finally, such a name basically no in English. But the surname Edwards is very popular and is even among100 most common English surnames. I don’t know what to think… Assuming that I will be subjected to terrible criticism, I risk hypothesizing that in writing William Edwards Deming the first word is the first name, and the second and third are the double surname... J

In my opinion, the preface by Yu. Adler, Yu. Rubanik, V. Shper is of great independent importance. Also noteworthy is the bibliography at the end of the preface.

Edwards Deming

Way out of the crisis. A new paradigm for managing people, systems and processes

translators Yu. Adler, V. Shper

Scientific editors Yu. Rubanik, Yu. Adler, V. Shper

Technical editor N. Lisitsyna

Editor N. Velichenko

Commissioning Editor S. Turco

Corrector O. Ilinskaya

Computer layout K. Svishchev

Art Director S. Timonov

Illustrator D. Izotov

All rights reserved. The work is intended solely for private use. No part of the electronic copy of this book may be reproduced in any form or by any means, including posting on the Internet and corporate networks, for public or collective use without the written permission of the copyright owner. For copyright infringement, the legislation provides for the payment of compensation to the copyright holder in the amount of up to 5 million rubles (Article 49 of the zoap), as well as criminal liability in the form of imprisonment for up to 6 years (Article 146 of the Criminal Code of the Russian Federation).

* * *

Preface to the Russian edition

With agreement, the small grows; with disagreement, the greatest is destroyed.

From Sallust

My acquaintance with the management philosophy of Dr. Williams Edwards Deming began with a meeting with Grigory Nosonovich Fidelman, an admirer and popularizer of the ideas of the world famous scientist in the Russian business community. Grigory Nosonovich gave me two books: "Alternative Management", which he wrote in collaboration with Yu.P. Adler and V.S. Dedikov, and "The Space of Dr. Deming" by Henry Neave. After reading both books, I realized that the management philosophy described in this book and those listed above is nothing but the basis for developing a business that is able to achieve an international level of competitiveness.

After reading this book, you will discover 14 principles for building a globally competitive business, get answers to questions about how to unite people around one goal, how to achieve teamwork in the true sense of the word, how to create an atmosphere of trust between employees, between employees and management, between business leaders and owners. It is difficult to overestimate the importance of such a derivative of teamwork as "collective wisdom", at the stage of the qualitative development of the company and for further increasing the profitability of the business, nothing can replace it. The red thread running through the book is the meaning of the category "trust" for successful business, how difficult it is to nurture it and how reverently one must treat such a subtle matter. An important aspect financial well-being– building business management not on the basis of even the most objective numerical indicators, but on the basis of an understanding of the variability (variability) of these indicators and the nature of the variation. Another aspect of great importance is the commitment to quality. The reader will discover the limitless possibilities that continuous quality improvement provides when both the company and the customer win as a result.

This book is especially useful for owners and senior management of companies. I'm sure you won't be disappointed. Even if you just read this work and do not apply the principles set out in the book, you will get food for thought, enriched with knowledge about a completely different approach to business, you will understand that in betting on winning over the long run, it is important and you need to rely on people working in the company, on their knowledge and experience. And you will definitely feel their gratitude for the trust, they will repay you with hard work and devotion.

Indeed, once you start reading The Way Out of the Crisis, as well as Henry Neave's The Space of Dr. Deming, you understand the meaning of the word "consent." Recently, many tools have been developed to create a successful business, one of the most popular is the balanced scorecard (BSC) by Robert Kaplan and David Norton. The largest international companies began to hastily implement the BSC, because they believed that this was the key that would give them a new impetus for development. However, the evidence suggests that only less than 10% of Western companies have successfully implemented BSC and thus implemented their own strategies. It is noted that the main reason for failures is the low involvement of middle and below average employees in the implementation of strategic plans. Naturally, various consulting companies specializing in the development of the BSC and its implementation offer all sorts of ways to solve this problem. However, all of the above is the tip of the iceberg, what is hidden under water, many have never seen. Everything that is written in this book, just to a greater extent, opens the underwater part of this "ice mountain" and will give answers to many questions that the dear reader, it would seem, have already despaired of getting an answer.

E.N. Begimbetov, Chairman of the Board of London-Almaty Insurance Company

Foreword by science editors

Troublemaker's message

Only knowledge can change the world, and nothing else.

Yukio Mishima

This book appeared a quarter of a century ago and was first published in the United States. The reason for writing it was the crisis that the American industry was going through at that time. The book caused heated debate and divided the debaters into enthusiastic supporters and implacable opponents. The controversy has not stopped to this day, although after the author's death in December 1993 (at the age of 94), its nature has changed somewhat. The book has been reprinted several times, this translation is based on the 2002 edition. So why are we returning to the problems of a bygone era?

There are such works made on the occasion that do not lose their relevance after years, or maybe they will live for centuries. This is the book you are holding in your hands right now. This book was an attempt to answer the question of the causes of the crisis of American industry in the face of the Japanese competitive offensive in the late 1970s and early 1980s. As a result, a work has appeared that summarizes the principles and methods of a new approach to management, which can only be called revolutionary.

Unfortunately, until recently, the Russian reader did not have the opportunity to get acquainted with Deming's teaching in any detail. And although the first attempt to publish this work of the professor in Russian was made back in 1994 (1), the quality of translation and publication did not allow the book to win the mass readership.

As far as we know, the first publication about Deming in Russian appeared in the journal Course on Quality (1991) (2). It was a magazine version of the first chapter of Nancy Mann's book (4). Almost immediately after this, a large article about Deming appeared in the magazine "America" (5), published in Russian. It was written by the talented American journalist L. Dobyns, the author of the text for the famous television report “If Japan can, why can’t we?”, Which was shown by the NBC television company in 1980. It was after this report that Deming became famous in America. In 1998, a book by Y. Adler and L. Makhovikova “Should a country be poor?” was published, which briefly described the essence of Deming's teachings (6).

However, no matter how much they write about Deming and his teachings, so far, in the opinion of everyone, the best introduction to the world of the concept of management he created is the book of his student and friend Dr. Henry Neave. The path of this book to the reader was also long and difficult. The first part of the translation of the book was published by the Committee for high school RF in 1996 (7). I had to wait five years for the second part, until it was published by the Standards and Quality publishing house (8). It was only in 2005 that the two parts finally came together in the book The Space of Dr. Deming: Methods for Building a Sustainable Business, published by Alpina Business Books (9). In the preface to this edition, we said that for complete happiness, the Russian-speaking reader lacks only an adequate Russian translation of Deming's book "Out of the Crisis". And now I want to believe that the happy moment has come. Now the Russian reader can get acquainted with Deming's teachings not only through talented, but still retellings and interpretations, but also "hear the voice" of the doctor himself, which will undoubtedly give a synergistic effect.

Deming created an innovative theory of management. According to Albert Einstein, the hallmark of a truly new, breakthrough theory is that it seems “abnormal”, “crazy” to contemporaries. From the very moment of its appearance, Deming's theory has thrown not only an intellectual, but also a moral challenge to all who are trying to study and, moreover, to put it into practice. And evidence of this is the numerous and often harsh criticism of Deming. Although his arguments are based on systems approach and the theory of variability, apparently, modern society the majority is not ready to accept these arguments (10).

Detailed information:

This book is for those who have already understood that business cannot be done by traditional methods, because the world has changed. Edwards Deming, an outstanding consultant of the 20th century, one of the authors of the "Japanese economic miracle", throws down an intellectual and moral challenge to the stereotypes of traditional management. His revolutionary theory offers the philosophy, methods and management technologies necessary to build a sustainable, efficient business that balances the interests of all stakeholders: consumers, employees, owners, suppliers, society as a whole. The proposed principles and concepts are illustrated by numerous examples from various industries, services and management. The book will be of interest to managers of all levels, entrepreneurs, engineers and technicians, as well as teachers and students of organizational, managerial and engineering specialties.

Edwards Deming - Out of the Crisis. A New Paradigm for Managing People, Systems and Processes read online

Way out of the crisis. A new paradigm for managing people, systems and processes. Edwards Deming, author of the book, title: Out of the Crisis. A new paradigm for managing people, systems and processes. Genre: Management, recruitment, year of publication 2014, Moscow, publisher Litagent "Alpina", isbn: 978-5-9614-3893-2.

Edwards Deming

Way out of the crisis. A new paradigm for managing people, systems and processes

Translators Yu. Adler, V. Shper

Scientific editors Yu. Rubanik, Yu. Adler, V. Shper

Technical editor N. Lisitsyna

Editor N. Velichenko

Managing editor S. Turco

Proofreader O. Ilyinskaya

Computer layout K. Svishchev

Art director S. Timonov

Illustrator D. Izotov

* * *

Preface to the Russian edition

With agreement, the small grows; with disagreement, the greatest is destroyed.

From Sallust

After reading this book, you will discover 14 principles for building a globally competitive business, get answers to questions about how to unite people around one goal, how to achieve teamwork in the true sense of the word, how to create an atmosphere of trust between employees, between employees and management, between business leaders and owners. It is difficult to overestimate the importance of such a derivative of teamwork as "collective wisdom", at the stage of the qualitative development of the company and for further increasing the profitability of the business, nothing can replace it. The meaning of the category “trust” for a successful business runs like a red thread through the book, how difficult it is to grow it and how reverently one must treat such a subtle matter. An important aspect of financial well-being is the construction of business management not on the basis of even the most objective numerical indicators, but on the basis of an understanding of the variability (variability) of these indicators and the nature of the variation. Another aspect of great importance is the commitment to quality. The reader will discover the limitless possibilities that continuous quality improvement provides when both the company and the customer win as a result.

E.N. Begimbetov, Chairman of the Board of London-Almaty Insurance Company

Foreword by science editors

Troublemaker's message

Only knowledge can change the world, and nothing else.

Yukio Mishima

However, no matter how much they write about Deming and his teachings, so far, in the opinion of everyone, the best introduction to the world of the concept of management he created is the book of his student and friend Dr. Henry Neave. The path of this book to the reader was also long and difficult. The first part of the translation of the book was published by the Higher Education Committee of the Russian Federation in 1996 (7). I had to wait five years for the second part, until it was published by the Standards and Quality publishing house (8). It was only in 2005 that the two parts finally came together in the book The Space of Dr. Deming: Methods for Building a Sustainable Business, published by Alpina Business Books (9). In the preface to this edition, we said that for complete happiness, the Russian-speaking reader lacks only an adequate Russian translation of Deming's book "Out of the Crisis". And now I want to believe that the happy moment has come. Now the Russian reader can get acquainted with Deming's teachings not only through talented, but still retellings and interpretations, but also "hear the voice" of the doctor himself, which will undoubtedly give a synergistic effect.

Deming created an innovative theory of management. According to Albert Einstein, the hallmark of a truly new, breakthrough theory is that it seems “abnormal”, “crazy” to contemporaries. From the very moment of its appearance, Deming's theory has thrown not only an intellectual, but also a moral challenge to all who are trying to study and, moreover, to put it into practice. And evidence of this is the numerous and often harsh criticism of Deming. And although his arguments are based on a systematic approach and the theory of variability, it seems that modern society for the most part is not ready to accept these arguments (10).

This means that the stated theory offers not only a new conceptual, scientific and methodological basis of management, but also a different worldview, a different value orientation. It needs a deep transformation contemporary practice in which the interests, needs of people - consumers, employees, managers - and society as a whole are subject to a narrow, short-sighted interpretation of the economic interests of the owners of capital. No wonder Deming's contemporaries in the United States called him the "pink professor", the "revolutionary of capitalism."

You can understand the origins of this revolutionary theory if you remember who Deming studied with, on whose ideas he relied.

Deming had great teachers and colleagues. Deming's first teacher and elder friend was Walter Shewhart (1891–1967) (11, 12), an eminent statistician who described himself as a "tough engineer." Shewhart is credited as the founding father of statistical process control methods, he created the concept of cost-effective quality. Although Deming never forgot to express his gratitude to Shewhart, he significantly developed his doctrine of the statistical nature of variability (variation) and transferred it from the sphere of production to all kinds of processes in social systems.

It should be noted that Deming also studied with the eminent astronomer Sir Ernest Brown and the great statistician and geneticist Sir Ronald Fisher. He collaborated with one of the greatest American statisticians of the last century, John Tukey, and with the great Indian statistician Prasant Chandra Mahalanobis.

Add to this that Deming's different time worked with brilliant experts in the field of censuses and statistical surveys, collaborated with the leading masters of statistical methods in quality control, Roming and Dodge.

Thus, the foundations of Deming's worldview and methodology as a scientist and researcher were formed in the field of exact sciences, primarily in the field of statistical theory and its applications to solving problems in practice. It is no coincidence that even after becoming a recognized guru, the author of the original concept of management, on his business card he designated himself as a “specialist-statistician”.

And although the logic of the work subsequently took Deming far beyond the sphere of interest of professional statisticians, they nevertheless continue to consider him theirs (13). In 2000, when Deming's 100th birthday was celebrated, the well-known American statistician Jerry Hahn circulated an interesting questionnaire to his colleagues regarding Deming and his legacy (14). The questionnaire asked what Dr. Deming did and did not do well. Of course, it was precisely the statistical aspects of Deming's teaching that were discussed most sharply. Many statisticians were not ready to share his point of view. The fact is that Deming radically revised the classical theory of statistical inference. He brought it into line with the theory of variability developed by Shewhart and supplemented by himself. This led to many years of controversy and to various interpretations of Shewhart's control charts. The bone of contention is the idea of statistical controllability of processes, which goes back to classical ideas about the representativeness of the sample. But only Shewhart and Deming gave these concepts an operational meaning, thereby making them suitable for practical use. Besides, in last years began the rapid development of the direction, which with light hand Deming called "statistical thinking". Books, articles and dissertations are devoted to this topic. Let us note only one of the first monographs on this topic (15) and our works (16, 17) and give references to the works of his closest followers in statistics - Brian Joyner (18) and Donald Wheeler (19).

The discussion around Deming's statistical ideas will probably not subside soon. Interestingly, Deming's student, Joyce Orsini, believes that all of Deming's endeavors were successful, at least partially. And about those that have not yet been implemented, it's just too early to judge. The time will come for them.

But this is, so to speak, a "home" discussion, which is of interest only to specialists. For us, what is important is that it was the inexorable consequences of the statistical laws that forced Deming to reconsider the principles of management.

Another, natural-science, component of Deming's managerial method, thanks to which the concepts of the lifelong learning cycle - PDCA (20) and operational definitions, have taken a central place in it, has, if you like, a philosophical underpinning. At the beginning of the XX century. the scientific community, physics, philosophy of science experienced a deep crisis associated with attempts to comprehend qualitatively new scientific results relating to the regularities of the structure of the micro- and macroworld. The most important scientific "products" of this crisis were quantum theory and the theory of relativity. Philosophically, this turbulent period of scientific paradigm shift gave rise to the concept of logical positivism. One of the largest representatives of the physical community who contributed to the formation of this philosophical trend was the English physicist and philosopher, Nobel Prize winner for his work in the field of high pressure physics, Paul Bridgman. He formulated the principle of operationalism, which identified scientific concepts, which are used by the scientific community, with methods (operations) for measuring the parameters corresponding to them (21). Later, more developed, modern philosophical constructions replaced positivism as the basis of philosophy. scientific knowledge. However, the extension by W. Shewhart and E. Deming of the principle of operationalism to the field of technical and business applications turned out to be exceptionally fruitful. “Business is much more precise than science,” Deming wrote. When applied to business and social tasks, operational definitions of key concepts make it possible to prevent huge economic losses and help reduce risks. Operational definitions are of great importance for achieving mutual understanding and joint cognitive activity of people.

The proposed principles and concepts are illustrated by numerous examples from various industries, services and management. The book will be of interest to managers of all levels, entrepreneurs, engineers and technicians, as well as teachers and students of organizational, managerial and engineering specialties.

book characteristics

Date of writing: 1986
Transfer date: 2007
Name: Way out of the crisis. A new paradigm for managing people, systems and processes

Volume: 620 pages, 121 illustrations
ISBN: 978-5-9614-3893-2
Translator: V. Shper, Yu. Adler
Copyright holder: Alpina Digital

Preface to the book "Out of the Crisis"

After reading this book, you will discover 14 principles for building a globally competitive business, get answers to questions about how to unite people around one goal, how to achieve teamwork in the true sense of the word, how to create an atmosphere of trust between employees, between employees and management, between business leaders and owners. It is difficult to overestimate the importance of such a derivative of teamwork as "collective wisdom", at the stage of the qualitative development of the company and for further increasing the profitability of the business, nothing can replace it. The meaning of the category “trust” for a successful business runs like a red thread through the book, how difficult it is to grow it and how reverently one must treat such a subtle matter. An important aspect of financial well-being is the construction of business management not on the basis of even the most objective numerical indicators, but on the basis of an understanding of the variability (variability) of these indicators and the nature of the variation. Another aspect of great importance is the commitment to quality. The reader will discover the limitless possibilities that continuous quality improvement provides when both the company and the customer win as a result.

Foreword by science editors

However, no matter how much they write about Deming and his teachings, so far, in the opinion of everyone, the best introduction to the world of the concept of management he created is the book of his student and friend Dr. Henry Neave. The path of this book to the reader was also long and difficult. The first part of the translation of the book was published by the Higher Education Committee of the Russian Federation in 1996 (7). I had to wait five years for the second part, until it was published by the Standards and Quality publishing house (8). It was only in 2005 that the two parts finally came together in the book The Space of Dr. Deming: Methods for Building a Sustainable Business, published by Alpina Business Books (9). In the preface to this edition, we said that for complete happiness, the Russian-speaking reader lacks only an adequate Russian translation of Deming's book "Out of the Crisis". And now I want to believe that the happy moment has come. Now the Russian reader can get acquainted with Deming's teachings not only through talented, but still retellings and interpretations, but also "hear the voice" of the doctor himself, which will undoubtedly give a synergistic effect.

Deming created an innovative theory of management. According to Albert Einstein, the hallmark of a truly new, breakthrough theory is that it seems “abnormal”, “crazy” to contemporaries. From the very moment of its appearance, Deming's theory has thrown not only an intellectual, but also a moral challenge to all who are trying to study and, moreover, to put it into practice. And evidence of this is the numerous and often harsh criticism of Deming. And although his arguments are based on a systematic approach and the theory of variability, it seems that modern society for the most part is not ready to accept these arguments (10).

This means that the stated theory offers not only a new conceptual, scientific and methodological basis of management, but also a different worldview, a different value orientation. It requires a profound transformation of modern practice, in which the interests and needs of people - consumers, employees, managers - and society as a whole are subject to a narrow, short-sighted interpretation of the economic interests of the owners of capital. No wonder Deming's contemporaries in the United States called him the "pink professor", the "revolutionary of capitalism."

You can understand the origins of this revolutionary theory if you remember who Deming studied with, on whose ideas he relied.

Way out of the crisis. A new paradigm for managing people, systems and processes - Edwards Deming (download)

(introductory fragment of the book)

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Out of the Crisis - A New Paradigm for Managing People, Systems and Processes - Deming E. Edwards Deming "Out of the Crisis

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Edwards Deming - Out of the Crisis. A New Paradigm for Managing People, Systems and Processes read online

book characteristics

Preface to the book "Out of the Crisis"

Foreword by science editors

Way out of the crisis. A new paradigm for managing people, systems and processes - Edwards Deming (download)

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