Dr Deming’s 14 Points

Contingency Management Theory

The contingency management theory is an organizational theory that claims that there is no best way to organize a corporation, to lead a company, or to make decisions. Instead, the optimal course of action is contingent (dependent) on the internal and external situation.

Contingent leaders effectively apply their own style of leadership to the right situation. Contingency theory of leadership emphasizes that effectiveness of leadership is dependent on matching a leader’s style to the right situation.

Fiedler’s contingency theory was originally developed by Fred Fiedler after studying various leaders in different contexts, but predominantly those in the military. Fiedler’s theory proposes that a leader’s effectiveness on how well his or her leadership style matches the current context and task.

Effective leaders know that just because one approach to an individual or an issue worked well in the past, it does not mean that it will work again when the individual, situation, or task is not the same.

Fiedler’s pioneering theory suggests that leaders fall into one of two different leadership styles:

1. Task-oriented, or
2. People-oriented

The effectiveness of a person’s style in a particular situation depends on how well-defined the job is, how much authority the leader has, and the relationship between the followers and the leader (see Figure X-1; Fiedler 1976).

Transformation of Western management style is necessary to halt the continued decline of business and industry. Americans are too tolerant of poor workmanship and sullen service. We need a new religion in which mistakes and negativism are unacceptable.

3.    Cease Dependence on Mass Inspection

Require statistical evidence of built in quality in both manufacturing and purchasing functions.

American organizations typically inspect a product as it comes off the assembly line or at major stages along the way. Defective products are either thrown out or reworked. Both practices are unnecessarily expensive. In effect, a company is paying workers to make defects and then to correct them.

With instruction, workers can be enlisted in this improvement.

4.    End Lowest Tender Contracts

Reduce the number of suppliers for the same item by eliminating those that do not qualify with statistical and other evidence of quality. The aim is to minimize total cost, not merely initial cost, by minimizing variation.

This may be achieved by moving toward a single supplier for any one item, on a long-term relationship of loyalty and trust. Purchasing departments customarily operate on orders to seek the lowest price vendor. Frequently, this leads to supplies of low quality.

5.    Improve Every Process

Improve constantly and forever every process for planning, production, and service.

It is management’s job to work continually on the system (design, incoming materials, maintenance, improvement of machines, supervision, and training). Improvement is not a one-time effort. Management is obligated to continually reduce waste and improve quality.

6.    Institute Training on the Job

New skills are required to keep up with changes in materials, methods, production, and service design, machinery, techniques, and service.

Too often, workers have learned their job from another worker who was never trained properly. They end up following unintelligible instructions and can’t do their jobs well because of improper training.

7.    Institute Leadership

Adopt and institute leadership aimed at helping people do a better job. The responsibility of managers and supervisors must be changed from sheer numbers to quality. Improvement of quality will automatically improve productivity.

Management must ensure that immediate action is taken on reports of inherited defects, maintenance requirements, poor tools, fuzzy operational definitions, and all conditions detrimental to quality.

The supervisor’s job is not to tell people what to do or to punish them. A supervisor must lead.

8.    Drive Out Fear

Many employees are afraid to ask questions or to take a position, even when they do not understand what their job is or what is right and wrong. They continue to do things the wrong way or not to do them at all.

The economic losses from fear are appalling. To ensure better quality and productivity, it is necessary that people feel secure.

9.    Break down Barriers

Break down barriers between departments and staff areas!

Often a company’s departments or units compete with one another. They do now work as a team, and so they cannot solve or foresee problems. Worse, one department’s goals may conflict with another’s.

10.    Eliminate Exhortations

Such exhortations only create adversarial relationships; the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce. These never helped anybody do a good job. Let workers formulae their own ideas.

11.    Eliminate Arbitrary Numerical Targets

• Eliminate work standards that prescribe quotas for the workforce and numerical goals for people in management.
• Substitute aids and helpful leadership in order to achieve continual improvement of quality and productivity.

Quotas take into account only numbers, not quality or methods. They are usually a guarantee of inefficiency and high cost. To hold a job, some people will meet a quota at any cost without regard to damage to the company.

12.    Permit Pride of Workmanship

This implies, among other things, abolition of the annual merit rating (appraisal of performance) and of management by objectivesOpens in new window.

Again, the responsibility of managers, supervisors, and foremen must be changed from sheer numbers to quality. People are eager to do a good job and are distressed when they cannot do so. Too often, misguided supervisors, faulty equipment, and defective materials stand in the way of good performance.

13.    Encourage Education

What an organization needs are not just good people; it needs people who are improving with education.

Advances in competitive position will have their roots in knowledge. Both management and the workforce must be educated in the new methods, including teamwork and statistical techniques.

14.    Top Management Commitment and Action

Clearly define top management’s permanent commitment to ever-improving quality and productivity, and its obligation to implement all of these principles.

It is not enough that top managers commit themselves for life to quality and productivity. They must know what it is they are committed to, what they must do.

Support is not enough: Action is required! Involve everyone in the organization in accomplishing the transformation. A special top management team with a plan of action will be needed to carry out the quality mission.

Neither workers nor managers can do it on their own (Deming 1989). It takes a critical mass of people that have been trained, understand the 14 points, and are committed to the Continuous Quality Improvement (CQI) concept to make it work in any organization.

These 14 points have inspired significant changes among a number of leading U.S. companies striving to compete in the world’s increasingly competitive environment. To accomplish this, many organizations have developed internal processes for their entire organizations to begin to institutionalize this mind-set into the organization’s DNA.

The Commission on Fire Accreditation International (CFAI) agency accreditation processOpens in new window is built on Deming’s, and other quality improvement pioneers’ work, including system design, organizational quality improvement, and agency accreditation.

Evolution of the Continuous Quality Improvement (CQI)

Dr. Deming is known as the father of the Japanese post-war industrial revival and was regarded by many as the leading quality guru in the United States.

Trained as a statistician, Dr. Deming's expertise was used during World War II to assist the United States in its effort to improve the quality of war materials. In an interview with Industry Week magazine, Dr. Deming was quoted as saying, “We have learned to live in a world of mistakes and defective products as if they were necessary to life. It is time to adopt a new philosophy in America.”

Invited by Japanese industrial leaders and engineers to Japan at the end of World War II, Dr Deming was asked how long it would take to shift the perception of the world from the existing paradigm that Japan produced cheap, shoddy imitations to one of producing innovative quality products.

Dr. Deming told the group members that if they would follow his directions, they could achieve the desired outcome in five years. Few of the leaders believed him, but they were ashamed to say so and would have been embarrassed if they failed to follow his suggestions. As Deming told it, “They surprised me and did it in four years” (Deming 1989).

It is a philosophy, not only about how the system works but also about how the strategic leaders enhance systems and processes, and work to provide better service to their customers.

Cooperation and coordination at all levels within every division of a department will be necessary to implement an effective Continuous Quality Improvement (CQI) System, which is the application of quantitative methods and people to assess and improve materials and services supplied to the organization and all significant processes within the organization and to meet the needs of the end user now and in the future. Dr. Deming’s business philosophy is summarized in his famous 14 points, discussed earlier.