William Deming was an American statistician, professor, author, lecturer, and consultant who defined a theory of management and leadership called the System of Profound Knowledge.

It is a theory of management that provides a framework of thought and action for any leader wishing to transform or improve their team or organisation and consists of four components, or ‘lenses’ through which to view the world simultaneously:

 

Improving systems is about appropriately applying the four principles and practices so that the organisation can simultaneously reduce costs through reducing waste and variation whilst increasing quality.

An appreciation of a system

Deming defined a system as ‘a network of interdependent components that work together to try to accomplish the aim of the system. The aim for any system should be that everybody gains, not one part of the system at the expense of any other’.

Understanding of variation

Understanding variation is critical to managing systems effectively. Deming identified two types of variations within a system:

  • Common cause variations are problems built into the system, such as defects, errors, mistakes, waste and rework. In a stable system, common cause variation will be predictable within certain limits.
  • Special cause variations represent a unique event that is outside the system, such as a natural disaster which has to be managed in a different way.

Reducing common cause variation and building stable systems is a key goal of effective system management.

Psychology

Leaders can create the best system, know all about variation and knowledge, and still not have a successful organisation if they don’t understand people, and particularly what motivates them to want to do a good job.

Deming understood the importance of effective people management and accepted that people cannot all be managed in the same way. He also understood that people are primarily motivated by intrinsic needs, including taking pride in workmanship and working with others to achieve common goals, in contrast to simply being motivated by monetary reward.

Theory of knowledge

Theory of knowledge is based on the premise that management is prediction and knowledge acquired is a rational prediction based on a theory of what may happen. This is then revised based on comparison of prediction with actual observation. The new knowledge is then reflected in the new theory of what action is needed to effect change.

The process of learning is embodied in the Deming Plan Do Study Act cycle, a systematic and dynamic process covering theory and application that helps gather knowledge, not simply data or information. It is a means of achieving a never-ending cycle of valuable learning for the continual improvement of a process or product.

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(NB information on this page is adapted from QI Hub Scotland)