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October 13, 2010

Deming vs Drucker

Follow-up to Inspiring from MKN Chronicles

So far in my reading it seems to be that every management theory i've come accross can trace its routes back to one of the two contrasting ideas belonging to either Deming or Drucker.

From Deming's work arose the EFQM model. This model which was developed from the Deming circle and the importance of continuous self improvement emphasises the importance of all the enablers of an organisation to achieve the desired results. With this model, success isn't solely based on performance and that for the proccesses which achieve results to work efficiently, cooperation is needed to effectively coordinate all the enablers.

The contrasting view of Drucker, who coined the term Management by Objectives, placed heavy emphasis on target setting to harmonize the efforts of the organisation towards a specific goal. As this theory developed, Performance Management was born. Despite seemingly integrating the workforce into the target setting process, this method still relies heavily on the idea of setting objectives and reviewing performance against them.

I have also come accross the balanced scorecard strategy. While my reading into this is more limited that the previous methods I have mentioned it seems to me that this strategy has similarities to Performance Management with its reliance on metric data to assess the business. And while it does try to include other factors into how it assesses performance by including aspects such as customer opinion, it does seem to be more heavily focussed on the financial aspects. I have to read further into this strategy to fully understand it, but at the moment my first impressions are that it has many parallels with the ideas of Performance Management, and in a loose way has some rootes in the ideas of Drucker.

Both the Deming view and Drucker view (as well as their derivatives) have certain benefits, both have certain drawbacks, but until I have gained a more thorough understanding of them I shall not be delving into the critiques just yet. For now, I have many unanswered questions, many books at my side in which I hope some answers, and a few days of extensive reading.


October 11, 2010

Inspiring

Well, what can I say. 8:00 this morning, driving down the A45 all I could think of was how many people seem to know very little, if anything at all about the highway code, or how to drive in general. Feeling I had to express my road rage creatively I thought a full on grumpy rant would more than likely by my next blog entry. Little did I expect that our introduction to CBE (Creating Business Excellence) would capture my imagination and completely distract me from the mornings frustrations.

A discussion based on the ideas W. Edwards Deming regarding the principals of Management. Principals which contradict the widespread westerm management techniques internal competitiveness in the work force and target based management. In the UK for example, they are both clearly present in most areas of the private and public sectors. Hospitals have targets in terms of patient care, time with each patient, and number of people "processed". Schools have set targets to meet in terms of grades. Private enterprises base their management goals on sales targets. Individuals are frequently renumerated based on their performance leading to people striving for individual gain as opposed to collective gain within their workplace. None of this is revelatory however.

For me, what sparked my interest was Deming's alternate view on how to achieve management excellence, and the wide applicability of his ideas. This theory centred around 14 principles of manangement that would create a situation in which the leadership and workforce within an organisation would cooperate in such a way that teamwork is promoted and the desire for self-improvement is created on both an aggregate level for the whole organisation, and a micro level for each individual employee. By the removal of interdepartment and hierarchical barriers, efficiency problems become clearer and a process of improvement can be initiated. If the desire for self improvement is present, the Deming Cycle, or PDCA (Plan-DO-Check-Act) method can be applied to determine the source of any potential improvement and act accordingly. This PDCA method of self assessment and improvement can be applied into all aspects of life and work in which a desire or need for improvement exists.

I am under no illusions that my knowledge on this topic is incomplete, but these ideas of removing statistics and target based management for leadership and motivation got me thinking about what firms that have used various aspects of this theory in a successful manner, and to what extend Deming's ideas were utilised. Google for example allows employees time for personal projects as part of their working day which has lead to many successful innovations in various aspects of their organisation. John Lewis can be used as an example of a business that has organised its ownership structure in a way that all employees are part owners of the organisation, which naturally promote a desire to collective self improvement because all employees gain from the success and development of the business.

My reading on this topic is far from over, but what I do know at the moment is that this is going to be an interesting topic to explore.


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