He Made America Think About Quality

By Andrea Gabor

Fortune
October 30, 2000

Twenty years ago NBC aired a documentary titled If Japan Can, Why Can’t We? The broadcast trumpeted Japan’s manufacturing prowess and humbled American corporations. The unlikely hero of the story was W. Edwards Deming, a statistician from Wyoming, who was credited with helping to turn around Japanese industry after World War II. Deming was virtually unknown in the U.S. at the time, but his success in helping to build quality products in Japan made him, for a time, the most sought-after sage in corporate America.

Deming would have celebrated his 100th birthday this month. Today the quality movement in American business is synonymous with Jack Welch and the Six Sigma process he has used to lead GE to ever greater heights of profitability. But it was Deming who made it all possible.

Deming descended on Detroit in the early 1980s at the behest of Ford CEO Donald Petersen. At the time Fordwas hemorrhaging red ink, battered by Japanese competition and still reeling from the Pinto disaster — the last major quality debacle before the company’s current tire troubles. Deming preached a gospel of long-term process improvement, rigorous manufacturing discipline, and organizational revolution. Dr. Deming, as he was widely known, introduced U.S. industry to statistical methods needed to measure and improve a range of processes — the foundation of what today Jack Welch et al. know as Six Sigma (a term for the statistical measure that refers to 3.4 defects per million).

But unlike many current quality programs, Deming pushed beyond scientific method for improving work processes. Cultivating the know- how of employees at all levels of the company was “98%” of the quality challenge, Deming insisted with characteristic hyperbole. He advocated teamwork, cross-department collaboration, rigorous training, and working closely with suppliers — long before empowerment became the e-word of the ’80s.

What made Deming both effective and controversial was his status as a quintessential outsider. A man of towering stature who thought nothing of berating top executives publicly, who inspired reverence among workers and engineers, and who composed liturgical music in his spare time, Deming was grudgingly respected but also despised by many CEOs. America needed Deming’s brand of shock therapy, argues John O. Whitney, a renowned turnaround expert. “Today CEOs understand the importance of process because of Deming. This has been a sea change in American business.”

Deming, who delivered his final lectures with the help of a respirator, steadfastly refused to build an organization, afraid his philosophy would transmogrify. He spent most of his professional life working out of the basement of his modest home in Washington, D.C., cultivating a loose-knit group of hangers-on who were not up to perpetuating his legacy. Consequently Deming’s name has been all but forgotten in influential management circles. Yet the quality movement that Deming inspired is very much alive. It endures in the popularity of Six Sigma, which borrows liberally from his work. Ford’s experience, however, shows just how difficult it is to maintain a commitment to quality over the long term. Says one Ford engineer: “Deming understood that you can’t turn quality on like a spigot. It’s a culture, a lifestyle within a company.” And that’s a lesson worth remembering.

Copyright 2000 Fortune/Money Group

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