Introduction
The process of running a business can be considered as both a skill and an art. Sure, it would greatly help a business or a project manager if he has the necessary educational background and credentials, and also an ample amount of experience in successfully conducting the business’ operations but without the right side of his brain contributing—that is the part of the brain responsible for processing things that have something to do with creativity and variation, it would be difficult to spice up the operations and in the long run, to have the employees and other key personalities running the business or organization interested and motivated to contribute to its further growth. The process of running a business can never be regarded as a simple thing because by studying it in a nearly molecular level, any researcher would be able to arrive at the conclusion that it is not. It is a complex and compound thing. A simply knowledgeable business owner may be able to reach the monthly or even yearly milestones that the executives have set up for the business but by solely relying on his intellect and disregarding the amount and impact of contribution that other members of the organization can provide—especially the functional units of a business, the employees, it is highly likely that everything will surely and sharply go down. This and other important principles of running a business have all been pointed out by the author of the book Out of the Crisis, Edward Deming, when it was published in 1986. One good thing about the book is that it can be summarized into fourteen easy to read and understand sentences, pointing out the main idea behind the author’s proposed core principles with regards to managing and running a business. The fourteen ideas, or principles if you will, have been regarded by the author’s readers as the golden standard when it comes to the process of running a business. However, it has been more than two decades, specifically 27 years since the author gave birth to such ideas and shared them to the people. Surely and in reality, a lot of things have already changed in the local and international business environment since the inception of such ideas. The fact that there have also been massive and small but still significant political, economic, and environmental shifts in the world economy to the equation, which can add up to the extent of change that the local and international business environment have undergone since 1986. Now, this paper will revolve around this dilemma. The question whether the 14 points that Edward Deming stated in his 1986 book Out of the Crisis is still valid and applicable considering the drastic changes that took place in the past 27 years since that edition of his book was published is what this paper will try to answer.
Edward Deming and his 14 Points on Running a Business
Deming argued that any business owner shall thrive towards product and or service development and innovation. He did so because he knew for a fact that only those who know how to successfully invest in these two aspects of running a business are the only ones who would survive after major fallout of a business industry, or even a more catastrophic economic or political upheaval. The only thing that a successful and prudent business owner or manager can expect is that the market, as well as the different environments with which the market the business is catering services or products to interacts will always continue and will never stop to experience changes. Consumer behavior and appetite is one of the most dynamic or from a lay person’s perspective, rapidly changing aspect of running a business. This, according to Deming, is the main reason why every business owner should strive to invest an ample percentage of the company’s total profits towards product and or service improvement, development, and basically anything that has something to do with innovation. In today’s case, the fact that consumer behavior and that every market as well as the different environment that each and every market interacts with are bound to experience changes—at varying levels, remains unchanged. This is to say that Deming’s argument about the creation of constancy of purpose and focus on improvement can still be considered valid. So far, the variables that made this point valid in 1986 remain unchanged which means that it can still be considered valid today. Changes in say any business environment for example will almost always compel any business owner or manager to react or make a reaction, more so if such change or changes bring about negative changes to the company’s performance—in all aspects, or the public’s opinion and confidence about its products and or services. Either way, the resulting effect of any change is a reaction—otherwise, the business and its current line of products or services will be left out, especially if the business’ competitors have reacted swiftly to the shifting of the market tides. Now, how the business or project manager would react is another story simply because each and every person’s knowledge, judgment, and decision making skills may great vary. Nonetheless the fact that any small changes can still be significant to bring about a reaction from an individual business entity or organization. In the world of capitalism or running a business, business managers can be classified according to their style of making decisions when confronted with major and minor but still significant changes. A business manager or owner can either be a passive or active decision maker. A passive decision maker is one that simply goes with the flow. In some references, it has been suggested that a passive decision maker is also a good problem solver because he is the one that focuses on the absolute solution to the problem—which is very likely to be caused by a change. An active decision maker on the other hand is the one who solves a problem or makes a decision based on a more diverse set of factors and or variables. He usually thinks not just outside the box but also beside, on top, and under the box, hence the adjective active. When it comes to the process of making either short term or long term decisions, the passive business manager would oftentimes be the one who would make short term decisions because he only acts and decides depending on the presence of a stimuli that requires him to, which is a problem. An active business owner or project manager on the other hand has all the room and resources to make longer term decisions or such that lasts. These business mangers do not simply stop even though the problem has already been solved. They try to get to the root cause of the problem and eliminate it. When the two get compared, it would easily turn out that the active business owner or manger wins because of the bigger room for improvement and making varied decisions and not just simply going with the flow, although it would likely be a given that being the active one, he is expected to be the one who would require more effort and dedication in doing things and making decisions that are expected from him, or probably even more than that.
Deming’s first point is actually directly related to the first point because they both pertain to changes. A real business manager would not normally expect his employees to be the ones who would cause or initiate the change or the application of the new philosophy even though there is already a dire need to. The author argued that this should be a part of the business owner or manager’s foresight. He should know when exactly a particular change or a new adaptation or shift in organizational philosophy should take place in order to take advantage of the shifting tides of consumer behavior, market trends, and other possible indicators of business performance, both in real time and in paper. The upper management should adapt to the new philosophy rather than merely expect the workforce to do so. Sitting pretty and expecting the entire workforce to be the initiator and bringer of change despite the obvious need to do so would likely lead to a disaster .
In Deming’s third point, he talked about the importance of ceasing dependence on inspection. In running a business, receiving and recognizing feedbacks can be very important. Unfortunately, almost all type of feedbacks, both positive and negative can be caught through regular inspection. Deming argued that in order to cease dependence on inspection, which can be a very daunting task or even a time-eater, the level of variation of the business’ products or services should be reduced. This way, it would be exponentially easier to scan the items for defects because it would be highly likely that there would not be any. This may work or may have worked—during the 90s or even up to the early 21st century in some industry but it would surely be not at par with today’s current best practices of running a business. Firstly, this part of Deming’s book suggests that a business manager limit the level of product or service diversity that his business has just so its employees can save itself from doing the complex process of conducting inspections and inventories, which could very well be the only way by which they can regularly and objectively monitor the quality and integrity of their products and or services. Secondly, such organizational policy would be too risky. Assume that the already limitedly diverse product or service line have been tagged as “independent from inspection” but did not perform as promised or as they were first analyzed in terms of market share. How can the business manager safeguard himself and his business from catastrophic losses when he only has a couple of products and services to rely on. In a highly competitive business environment such as the one in the 21st century, it has been proven that a more diverse product and or service line would be more beneficial for the business in the long run as it provides the company with stronger footage in the market and more safeguards in case some products and or services do not perform well in their respective segments . Therefore, the author of this paper does not find that this principle would work wonders in the current global economic and market situation even though it may have worked for some when Deming’s ideas about running a business were first publicized. In fact, we do not think that having a limitedly diverse product or service line as a strategy would have worked wonders in the past even though it is logical to think that minimizing the time and financial costs of regular inspection of products for defects and other quality assurance-related matters could have minimized the total cost for every product manufactured and sold to the market.
The fact that each people’s knowledge, experience, and skill in doing their respective duties and responsibilities can greatly vary has been supported by Deming all throughout his book. He suggested that an effective business manager should institute training on the job because if people are inadequately trained, they will not all work the same way, and this will introduce variation. This statement has been so widely accepted that other people who authored scholarly studies about business operations management have also made similar statements, which only further justified this particular point from Deming. Training an organization’s employees and basically all functional units can be a very good way to establish norms and standards of practice within the organization, especially if the business is customer service oriented or if its performance can be greatly affected by such . Making sure that everyone performs well and learns how to do so by continuously training them—the employees, on the job is essentially better rather than relying on the employees’ individual differences, stock skills, and expertise and then expecting them to perform the same. Providing trainings and other opportunities promotes uniformity when it comes to the provision of a standard quality product or service, which may well develop into a business trademark for quality and excellence .
A business manager is a leader and without distinct leadership skills, how then can he lead his people and his organization towards prosperity? Deming emphasized that a business manager should be able to institute leadership by making a distinction between leadership and supervision. He suggested that the latter is quota and target-based while the latter is far more complex to be merely based on these two objective measures we just mentioned. All leaders can be supervisors but not all supervisors can be leaders . This statement only leads to the idea that being a leader is a far more complex job than being a supervisor. A leader should look into both the subjective and objective side of things because that is the best way how he can make other people follow him in contrast to the act of supervising which only deals with objectivity, nothing more and nothing less. This principle is still very applicable in today’s business and market conditions. But then again, due to the tight competition in various business industries, business managers tend to be more of a supervisor, crunching in numbers after number, than a leader who cares about both the figures and his people’s perspective of him as a leader.
Conclusion
In summary, most of the fourteen points that Deming revealed and shared in his book were general business practices that any business manager can opt to live by. The ones presented in this paper are the most controversial ones, especially when we start to consider their applicability and validity given the condition of today’s market and business environment. Also, the author of this paper has noticed that majority of Deming’s points are directly related, often to the point that they say almost the exact same thing. All in all, majority of his points can still be deemed as valid given today’s market and business conditions except for the ones that suggest a limitedly diverse product and service lines in an effort to cut down dependence on inspections would be beneficial for a business.
References
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