Robert Heller: Why don't we hang bad admirals of industry? | Business | The Observer
I don't think the columnist is literally suggesting hanging CEO's… but his point is a good one, that the “carrot & stick” management philosophy is all carrot, no stick.
Heller makes a tie in to the Deming philosophy at the end of his piece, valid comments from Dr. Deming (of course), but I didn't quite get the connection to the rest of the commentary:
That great teacher W Edwards Deming made managers play competitive games to prove that achievement is largely random and that in any team, somebody inevitably comes bottom. Belabouring that unfortunate loser does nothing for overall performance. Treating people as individuals and helping them to succeed and improve is the true answer. Top managers who don't know or practise that truth don't deserve employment, let alone incentives.
Help me out… what are your comments on this? I don't think Dr. Deming would have advocated NOT holding top executives accountable. The failure of many of these CEOs is far from random — it was based on badly failed business models and greed, for the most part.
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My guess is by games he is referring to the red bead experiment, which does show the system results negating individual impact.
Dr. Deming also strongly advised against performance appraisals with arguments that determining the impact on the system due to one person was impossible to determine.
Dr. Deming did, however, challenge senior executives very strongly about their actions. It is difficult though to understand exactly how this plays out without a great deal of reading on Dr. Deming’s idea, I think. My take would be that he was very critical of those in authority that failed to maximize the well being of all the stakeholders by clinging to outdated notions like performance appraisals, management by numbers (MBO and cost accounting), short term thinking, disrespect for people…
He did definitely challenge those with authority for not doing all they could to improve results for all the stakeholders. And he would certainly criticize practices engaged in by senior executives that he found wanting.
Mark/
Good post. Thought provoking as usual.
After reading Heller’s article. I think the game he refers to is Deming’s Red Bead experiment – but his interpretation is not accurate. The game (experiment) was not designed to prove that achievement is random (it’s NOT) but rather to demonstrate that an individual’s performance in a system/process is largely the result of the system – not the individual’s best efforts. Deming would hammer this point home with warnings, hectoring and wall posters (e.g. “Take Pride in Your Work” or “Increase Productivity”) – none of which altered the daily production outcomes.
Secondly, Heller mistakenly states “in any team, somebody inevitably comes out bottom”. In a team, there are no individual results. When the Phoenix Suns win, they all win and vice versa. What he may have meant to say was – again from the Red Bead experiment – that in any set of system/process results, there are inevitably “high performers” (results we like) and “low performers” (results we don’t like) – and that an individuals position in the results is essentially random.
To your question, Deming was indeed famous for holding top executives accountable – for the system and its relentless improvement.
/Dr. Pete
I agree that it’s probably the Red Bead game. It’s amazing how competitive people DO get in that, given that the # of red beads is pure chance.
I think managers and executives don’t want to believe it’s “the system” giving them good results when they happen (it’s because they’re brilliant execs). But when things are bad, somebody must be blamed (or “it’s the system”).
They can’t have it both ways.
I agree that there’s not necessarily “a loser” in any team. That’s the old GE forced ranking “fire the bottom 10%” scheme. That’s not a Deming system. On a winning team, everyone can be a winner.