W. Edwards Deming's book “Out of the Crisis” is an influential and timeless piece of work that has guided many modern businesses to strive for excellence. In the book, Edwards Deming offers 14 principles for transforming the quality of goods and services, raising productivity and restoring pride in workmanship for business owners, workers, and executives alike.
The book opens with an introduction to Deming’s philosophy and methodology for achieving a profitable and successful organization. He stresses importance on the “system of profound knowledge” (SPK) as the only way to reduce costs, improve profit margins and reach high quality levels. The SPK breaks down into four main areas: appreciation of a system; understanding variation; theory of knowledge; and psychology.
The first section of the book goes into a detailed explanation of organizations needing to adopt the SPK system. Deming stresses the importance of organizations to utilize the SPK in order to improve total quality, make plants cost effective and break down cultural barriers. This includes concepts such as reducing fear, recognizing individual contributions, producing long-term relationships with suppliers, and engaging workers in problem-solving.
The second section of the book focuses on management’s role in creating an effective workplace and encourages them to accept the idea that everyone in the organization is connected and reflects on the overall performance of the business. Managers must take the lead in communicating their vision and strategy to their team members. Leadership must understand that employees need coaching and develop enthusiasm—by motivating them to work with a sense of pride in the work that they do.
The last section of the book dives deeper into optimizing the potential of the organization by putting into practice the methodology taught in the first sections. Deming introduces the concept of “reward-and-punishment” concept, where failure to follow the guidelines is punished, yet following the principles resulted in recognition, satisfaction, and reward. He also provides a guide to successful implementation of the methods mentioned in the previous sections, including the need to have ambitious goals, address common problems in a logical and systematic way, apply data-driven measurements, and break down long-term goals into achievable short-term goals.
Overall, W. Edwards Deming’s book “Out of the Crisis” is an invaluable guide to creating a successful organization. By teaching a new methodology, companies are able to reduce costs and increase profitability while also creating a culture of pride, joy and enthusiasm in the workplace. The 14 principles effectively apply to nearly every company, regardless of size and industry, and provides business owners and managers with the tools and resources to run a successful and profitable organization.
