Book review: Out of the Crisis

Thanks to interlibrary loan, I had the privilege of reading W. E. Deming's classic book "Out of the Crisis" yesterday.  For the uninitiated, Deming was a guru of quality engineering who played a huge role in making Japanese industry what it is today.  If you've ever bought anything from Toyota, Honda, Sony, Hitachi, or a host of other Japanese companies, you have Deming (and a hot of other American QEs who went to Japan because U.S. businesses wouldn't hire them) to thank.

The book is more or less a summary, written at a time (1980s) when the national psyche was terrified of what would happen if, God forbid, the Japanese ever got more than 30% market share in automobiles.  And so Deming used a very simple motif--basic statistical tests along the lines of Shewhart's control charts--to point out the folly in any number of areas.  More or less, his point is that, from corrective actions to annual reviews and incentive programs, statistics generally point out that the problems at hand are not special causes, but rather the ordinary variation of the system.

The end conclusion he makes--to summarize perhaps too tersely--is that managers need to organize a system that works for the long term. 

What strikes me at the end, though, is how few of the companies I've worked for follow Deming's wisdom.  Now to be sure, two of the four are out of business, and a third is likely to follow, so perhaps this isn't such a bad bit of data after all.  And to be sure, Toyota and Honda are still going gangbusters.  But even so, I wonder what Deming would think to know that few American companies use his statistical methods to evaluate their policies, let alone subscribe to his "14 points" or avoid his "7 deadly diseases.  I reckon he would have something to say about the matter.

Maybe those of us who inherited his wisdom should.