Competitive Intelligence & Deming

(Driving Out Fear & Breaking Barriers)

I was searching through some old documents when I came across a document on W. Edward Deming’s 14 Points for Management. I haven’t looked at this document for many years, and reading it proved to be an intellectually refreshing experience.

Deming’s principles are more valid now than at any other time in the recent past.

This quote from Deming likely runs counter to the management techniques used by most companies, where success is determined based on quantitative measurements.

Deming called for building quality into the product/service during development and before launching it into the market. This means building a product/service from the customer’s perspective first, and then working backwards to build in cost efficiencies to increase profits. The emphasis is on fine-tuning the process so that customers become fans and promoters of the company’s product or service, as opposed to the company promoting itself by emphasizing what it did for a customer after something goes wrong and remedial steps are needed.

Competitive Intelligence: Driving Out Fear & Removing Barriers

There are occasions, however, when a flaw in the product or service is left unchecked, leading to customer dissatisfaction and competitor exploitation.

This writer described such a situation in a previous article, where a Competitive Intelligence study found a fatal flaw in a client company’s offering – a flaw that was acknowledged by its customers and exploited by its main competitor. It took a significant effort to bring the client around to accepting the existence of this flaw, its impact on the client’s reputation and profits, and the need to take immediate remedial actions to protect its position within its business sector.

At this point we can look at two other Deming principles: drive out fear and break down barriers.

Drive out fear: Generally speaking, no one wants to “rock the boat”, whether you are an employee or a third-party vendor providing a service to a corporate client. There are occasions where it is necessary to present some unpleasant truths about a company’s offering not with intention of making the company “look bad”, but rather that modifications can be implemented to restore the company’s reputational integrity and profitability.

Break down barriers: Deming’s original intention was to break down barriers between departments. This principle remains valid today, especially for anyone managing a CI unit.

What this writer has found is that a corporate culture, when misapplied, can be the greatest barrier to a company’s success. This is when a corporate culture (a company’s self-image and/or set of principles) acts like an echo chamber blinding the company’s key decision-makers from market realities like customer dissatisfaction and competitor inroads. “Compliance” becomes another word for “submission” to a management team that will not tolerate bad news.

This type of corporate culture is the hardest barrier to overcome. Symptoms of a dysfunctional corporate culture include high employee and customer turnover rates. The end comes when the company gets blindsided by “unforeseen” events.

Conclusion

Deming’s 14 Points are based on the idea that an entity, whether it is a person or a corporation can only survive and thrive if it is willing to continuously learn and improve. I will conclude with four quotes from Dr. Deming:

A bad system will beat a good person every time. 

It is not necessary to change. Survival is not mandatory.

Learning is not mandatory … neither is survival. 

I am forever learning and changing.