The Business of Business Is People
This speech was presented by Laurie A. Broedling, Senior Vice President,
People, McDonnell Douglas, to the Quality Conference-Deming Study Group in Washington,
Today I want to talk to you about reaffirming quality. By that I mean breathing new
fire and spirit into the quality movement.
According to an old Chinese proverb, whom the gods would destroy, they first condemn to
30 years of success.
As part of the quality movement inspired by W. Edwards Deming, we have been
"condemned" to 30 years of success.
Over the past several decades--and in the last decade, most particularly--some of the
ideas that are central to our movement have gained widespread acceptance throughout the
corporate world. In the process, they have gone from being revolutionary in their content
to being perceived as part of the conventional wisdom.
As you all know, one of Deming's 14 points is to "eliminate slogans."
Nonetheless, it is a sad fact that many of us in the quality movement have been guilty of
But if we have sometimes been guilty of sloganeering, we have other problems as well in
trying to communicate an effective quality message.
The biggest of those problems--to my way of thinking--is that some people in the
business consulting field have drawn some ideas and concepts from Deming, while discarding
others. The total effect of this has been to distort... to dehumanize... and, I fear, to
detract from the quality movement.
I am thinking, in particular, of the reengineering movement--or at least some
expressions of it.
Reengineering is sometimes presented as a kind of turbocharged version of
Deming--promising fast and dramatic results. In fact, exponents of reengineering are
sometimes critical of Deming and TQM as offering too much of a gradualist approach to
change and improvement.
Reengineering--often done with the help of outside consultants-- is very much of a
top-down phenomenon. Reengineering seeks breakthroughs, not by enhancing existing
processes, but by creating new and wholly different processes. Because it has often been
associated with radical downsizing, re-engineering has become almost a code word for
pushing up profits by pushing people off the payroll and out the door.
In all of this, there is much that is contrary to the thinking of Deming--and indeed,
to the whole concept of quality, as I see it.
Dr. Deming took a holistic approach to quality... and a holistic approach to
management. As he saw it, improvements in quality led to improvements in productivity,
which in turn led to lower prices, greater market share, and future growth.
In his view of the world, the interests of the employees and the shareholders were
complementary, rather than antithetical.
Deming was highly explicit on this point. In Out of the Crisis, he stated, "The
job of management is inseparable from the welfare of the company... Management must
declare a policy for the future, to stay in business and to provide jobs for their people,
and more jobs."
According to Deming, loss of market, and resulting unemployment, were seldom, if ever,
foreordained or inevitable. They were management-made.
In Deming's view, the problem was never people--in the sense of the multitude of people
working for an organization. It was always management.
Reengineering turns that view of the world upside-down and inside-out. When a company
is "reengineered," it seems that it is the people who are to blame for bad
performance, while management is presumed to have all the answers.
This reminds me of a line in a Bertolt Brecht play, where one of the characters says,
"The people have lost the confidence of their leaders. They must be punished."
Ladies and gentlemen, quality is not something that comes about as a result of
all-powerful leaders punishing their people for failing to follow.
Quality presupposes integrity--integrity that is present at all levels in an
There is no better or fuller description of the meaning of quality than that offered by
Max DePree, the chief executive of Herman Miller, Inc., which is perennially ranked at the
top of the list of the most admired companies in its category in the annual Fortune
magazine survey. In his book, Leadership Is An Art, Depree wrote:
"When we talk about quality, we are talking about the quality of product and
service. But we are also talking about the quality of our relationships and the quality of
our communications and the quality of our promises to each other. And so, it is reasonable
to think about quality in terms of truth and integrity."
Looked at in those terms, quality is a good thing, in and of itself. In addition--as
Deming pointed out, quality is efficient- -in a way that mere power can never be.
Consider a story that is told of Joseph Stalin. At the height of the terror in Russia,
Lenin's widow--a revered figure in the Communist Party--attempted to criticize some of
Stalin's actions. Stalin brought her to heel with the magnificent threat--"if you
don't shut up, we'll make somebody else Lenin's widow."
The point here is that any system built on coercion and control, such as Stalinist
Russia, impedes the flow of critical information (in both senses of the word
"critical"). And that is not the only disadvantage of coercive versus
Sydney Pollack, the Academy-award winning film director, was eloquent in expressing
some of the limitations of authority in speaking to management guru Warren Bennis. Pollack
"Up to a point, I think you can lead out of fear, intimidation, as awful as that
sounds. There is a lot of leadership that comes out of fear, dependence, and guilt. But
the problem is that you're creating obedience with a residue of resentment. If you want to
make a physics analogy, you're moving through the medium, but you're creating a lot of
drag, a lot of backwash."
If I were living in a monastery in Tibet, in charge of the monastery's TQM program, I
might consider advocating quality solely on the basis of it being a good thing. However,
since I work for a large corporation that is very much in the business of making money, I
advocate quality programs and people-centered policies on the basis that they contribute
not just to attitudes and morale but also very importantly--to improving the bottom line
and winning new business.
Unlike reengineering, which begins by discarding existing processes, Total Quality
Management follows a path of engaging people at all levels in continually enhancing the
processes that determine the flow of work. That will succeed if, and only if, people buy
into the need for improvement... and the opportunity to make it.
In recent years, the idea of Kaizen, striving for a large number of incremental
improvements, has taken something of a back seat to the idea of making big one-time
breakthroughs through superior innovation and creativity.
Deming believed that both Kaizen and breakthroughs (big one-time improvements in
products and processes) are very important.
The trick, then, is not choosing between the one or the other, but learning how to
pursue both at once. A good place to begin is in recognizing that creativity exists in all
people... in all levels of an organization.
Here is another area where I believe that reengineering tends to be both de-humanizing
and destructive in its thinking. It has embraced the idea of a few Nietzchian supermen who
determine all real change and progress.
But innovative or creative thinking is something that goes on all the time in a dynamic
organization. It is a terrible (though common) mistake to think of creativity, and
imagination as the exclusive province of the gifted few.
There is a growing body of research showing that creativity is almost universally
present in people--at least in childhood. The pre-school years have been described as a
kind of golden age of creativity, when every child sparkles with artistry, and innovative
problem-solving skills. Young children paint in bold and daring strokes. They are able to
master two or more languages with little difficulty.
After that, however, with exposure to more structure and discipline, and with more peer
group pressure, a kind of rot sets in, and most of us grow into artistically stunted
adults. It starts with school and it gets a whole lot worse as one enters corporate life.
As part of the maturation process, as we advance in our analysis skills--or what is
sometimes called linear thinking--all but a few of us become markedly weaker on the
artistic or creative side--in so called non linear thinking.
No less a genius than Pablo Picasso paid homage to the creativity that we all begin
with. At an exhibition of children's work, he observed: "When I was their age, I
could draw like Raphael, but it has taken me a whole lifetime to learn to draw like
In a similar vein, Albert Einstein was acutely aware of parallels between his thought
patterns and those of children. He told one interviewer:
"How did it come to pass that I was the one to develop the theory of relativity?
The reason, I think, is that a normal adult never stops to think about problems of space
and time. These are things which he has thought of as a child. But my intellectual
development was retarded, as a result of which I began to wonder about space and time only
when I had already grown up. Naturally I could go deeper into the problem than a child
with normal abilities."
If creativity is something that can be unlearned, it is also something that can be
re-learned. It can be exhumed--from the slag heap of institutional thinking--and brought
back to life, with careful nurturing.
That is something we have tried... and are trying to do... at McDonnell Douglas.
Through integrated product teams--spanning various disciplines and disregarding
hierarchical rank--we are endeavoring to capture more of the creativity, imagination, and
motivation of all of our people.
I could cite a number of examples where we have achieved extraordinary progress through
the work of ordinary people released from the constraint of ordinary expectations.
To cite just one example: Thanks to the work of integrated product teams, the new E/F
Super Hornet version of our F/A-18-- due to enter service with the Navy before the turn of
the century--is able to provide 40% more range, greater versatility, and more firepower
than earlier versions of the Hornet at a fraction of the cost of a new program.
Having said this, let me go a step beyond and address the need for creativity of the
highest order--meaning the kind of creativity that resulted in the discovery of
penicillin, the polio vaccine, or the computer chip.
Clearly, there is more than one kind of innovation. There is the kind we have already
discussed that expands the envelope of an existing product or an existing concept.
But there is another kind of innovation--which not only builds upon previous
innovations, but also, in some important way, departs from them.
Breakthrough thinking of this kind often depends more on individual output than on
group or team work. After all, a brain is a unitary thing. Sometimes it does its best work
in an informal environment where there are no committees or task forces... where people,
working on their own, are free to experiment and to think the unthinkable. Dr. Deming
often referred to Bell Labs as such a place.
At McDonnell Douglas, we have encouraged that kind of thinking at our Phantom Works
advanced R&D facility in St. Louis.
Just a few weeks ago, some of the top officials in NASA were in St. Louis for the
roll-out of an experimental aircraft, called the X-36, which was designed and developed at
the Phantom Works. This aircraft--which has no horizontal or vertical tail and a severely
shortened wing structure--may truly change the shape of things to come in fighter
aircraft. It is extraordinarily light and agile. Its design represents the kind of radical
simplicity which is characteristic of breakthrough thinking.
There is no single answer to the question of how to encourage breakthrough thinking in
the midst of large and all-too-often cumbersome organizations.
Clearly, there are some areas where empowerment is appropriate and others where it is
not. For instance, you would not want to rely on empowered teams--given the freedom to
ignore established procedures and processes to install nuclear devices on a submarine.
Management must use common sense and good judgment in striking a balance between the
need to let go in some areas and the need to exercise oversight in others.
On the topic of striking a balance between the one and the other, I read an interesting
article entitled, "TQM, Reengineering and the Edge of Chaos," in a recent issue
of Quality Progress magazine, I would urge all of you to read it.
As defined by the author--Lawrence Leach, the head of a consulting firm in Idaho
Falls--"the edge of chaos" is a "constantly shifting battle zone between
stagnation and anarchy," For most purposes, this is where you want your organization
to be... because systems that are too stable will die as the environment evolves, while
systems that are too chaotic will tend to self-destruct.
One set of forces (the need for order and control) pulls every business toward
stagnation, while another set of forces (the need for growth and creativity) drives it
Deming's philosophy allows organizations to alter their control systems to avoid
attraction either to disintegration or ossification.
"TQM provides both sets of forces needed to keep a company together," he
writes. "Continual improvement provides the force to drive the system toward
disequilibrium, while other aspects of TQM--such as constancy of purpose, managing the
business as a system, and joy in work--provide the restraining forces to keep the
By building a process of continual improvement, Dr. Deming's philosophy makes change
the norm within an organization. People who learn how to change their organization in
small steps gain the confidence and skill to succeed at larger changes.
At the outset of this talk, I noted that many of us in the quality movement have been
guilty of resorting to slogans. Without a doubt, one of the reasons Deming bothered to
include the elimination of slogans in his 14 points is the fact that he was espousing a
profoundly humanistic approach to achieving improvement and creativity in the workplace.
He did not want people to become the slaves of any theory--his own included.
Deming concluded every seminar with the same five words, saying, "I have done my
It is up to each of us to do our best in reaffirming quality within our own
To do that, there are three things that we must do very well.
First, we have to promote the understanding that quality makes good sense from a
business perspective. To be understood... and to be persuasive... we must speak in the
language of business, plainly and clearly.
Second, we must continue to emphasize the need for incremental improvements as well as
breakthrough achievements. Total Quality is a journey, not a destination. Like many
journeys, it is a journey that carries the hope of self-renewal without self destruction.
And last, we must never forget that the real bottom line is people. At the end of the
day, the success or failure of a business depends on management's ability to harness the
willing participation and creativity of people.
Now... perhaps more than ever... the business of business is people. That is an awesome
responsibility... and for all of us in this room... an inspiring challenge.
Copyright © 1998 The Executive Speaker® Company