All entries for Wednesday 30 October 2013
October 30, 2013
Reading Deming's The New Economics, (I literally recommend this book to everyone I know!!!) offered an interesting insight into failure and success. When discussing variation in his concept of System of Profound Knowledge, Deming offers a good example. When a student receives their grades, some of the class will be above average, and some of the class will be below average. If you are rated as being below average, I personally (and believe most people would too) feel greatly inferior in comparison to others. What is irrelevant here is how good the average could be. The average could be 95%.
Therefore, understanding this variability is of key importance to an organisation. In order to understand this, Deming argues that data needs to be brought into a state of statistical control. This subsequently allows for future outcomes to be far more predictable. What is more important is to understand whether any variation is a special cause or common cause. A common cause of variation is something that is built into the process. For example, my times when jogging may vary based on how much energy have I already expended in the day, what have I eaten, how recently have I last exercised and my general mood. A special cause of variation is something that is unique and outside the system, such as having to alter my route because a road is closed, thus varying my time.
Therefore, and back in a business context, understanding this variation and drawing knowledge from it is of significant importance to an organisation looking to develop and grow. That's what the System of Profound Knowledge exactly tries to do, it is aimed at making employees within an organisation get an external view of what is going on in the organisation. If you complain that David Cameron is not doing a good job as Prime Minister, would you be able to do a better job by taking over and working harder? No. You would make exactly the same decisions leading to the same outcomes that David Cameron has. It is only new knowledge that guide an individual in a different, (and hopefully) better direction. As Deming states himself, best effort and hardwork only dig deeper in the pit we are in. It is new knowledge that allows us to climb out of this pit.
Therefore in the future, when I apply for jobs and undertake online tests, if I fail and fall below the average, I will not be to aggreived. Why? Because half of the applicants will fall short of the average, because results will always vary. Who knows in the future what I will achieve? I could be by far a better potential worker for an organisation, but lose out of a job because of variability in my performance on online tests. The candidate that beats me could have experienced a common cause of positive variation, whilst a special cause of variation could have caused me to fall far short of my potential.