I am going to write the next few posts concerning some of the contributions of W. Edwards Deming. His insight and practical vision have literally changed industries and nations.
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I want to begin with Deming’s idea of the purpose that an organization exists in the first place.
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He says:
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“The aim proposed here for any organization is for everybody to gain - stockholders, employees, suppliers, customers, community, the environment - over the long term.”
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One writer interprets that in this way, “An organization exists to provide good jobs to employees, provide products and services to customers and to make money for the owners.”
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Some people struggle with the profit motive of a company. While Deming makes the case for all people gaining in the long term, nonetheless, it cannot happen without the profit factor being the first consideration.
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For example when the writer above inverts Deming’s comment and reverses the order, they miss the reality of how business really works. The purpose of a company is not to provide good jobs to employees; it is a byproduct of a company seeking profits first. If a company isn’t profitable, it is in no position to offer quality pay.
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Now of course that ties in with products and services. It is the ability to understand and know what it is a consumer wants that allows a company to exist in the first place. Of course it is the providing of those services. while making a profit, that allows all of the rest to come.
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Another blog connected to the one mentioned above continues on the subject of job provision being the purpose needed to be improved upon by a business.
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He says, “The marketplace does a pretty good job of asserting the importance of customers and suppliers. Even so, regulation and law enforcement are necessary actors in those instances where the free market is insufficient.”
Anytime someone starts saying that the free market is insufficient, they have moved out of reality into politics. In other words the market is said to work for shareholders, suppliers, and customers, but not for workers.
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He goes on to say:
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“How those interests are balanced is not such an easy issue to address. I think Deming's quote is a good starting point for discussion. Right now we have the balance pretty heavily in favor of the owners (and making profit). I personally, think it makes sense to have that as a very important factor, though I favor increasing the focus on some other factors than is the current normal practice. Most importantly, I believe we need to increase the importance of the purpose of providing good jobs for employees.”
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The market isn’t insufficient as is suggested above. What a worker makes is totally determined by market forces, not the forces of government regulation and law enforcement. That has never worked historically and never will.
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Businesses that compete in the market for quality help do have market pressures to compete with others in their industries to offer benefits that will attract the types of candidates they desire.
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Deming wasn’t suggesting socialism in any way shape or form by the statements he made, rather, a company that is able to be profitable while serving its customer base will have the ability, and should have the will to do the rest.
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