W. Edwards Deming’s view of systems

I’ve had a general interest in systems and systems theory and how different people have written about it. Depending on the context different authors will view what a system is differently. Recently I’ve been reading W. Edwards Deming’s The New Economics for Industry, Government, Education. Deming, who passed away in 1993, had a long career as a management consultant. He is probably most known for his work in Japan introducing them to concepts of quality control. The Deming Prize was created in his honor and continues to be awarded every year. (See here for more information on the Deming prize than is available on the JUSE site.)

Deming’s concept of a system is a key part of his overall thinking and is the basis for what he termed the ‘system of profound knowledge’. His view of systems differs a bit from how systems are described elsewhere. To start, Deming is primarily concerned with man-made systems, though he does not go on to elaborate much on how a man-made system differs from naturally occurring systems. His basic point that any system consists of several, interdependent components is not, in itself, a radical departure from other conceptualizations of systems. A component might be a person, and it does seem that often Deming uses the term ‘component’ interchangeably to refer to people in a system. There’s no reason to think that components can’t include other items besides people though — equipment of various kinds, raw materials, etc.

Where he does differ are in other statements about systems and their dynamics. To understand how Deming arrives at his conceptualization of a system it is worth focusing for a moment on his idea of the aim of a system. Any system must, according to Deming, have an aim, and if it doesn’t then by definition it isn’t a system. All the components in the system need to be focused on the aim and pursue that to the best of their ability. He further recommends that the aim of a system should be that all the people involved in the system benefit over the long term from their participation in it.

What is perhaps an unexpected point is that he argues that competition is ultimately a destructive force, and a system must be actively managed to prevent that. If left untended, the components of a system will naturally turn towards pursuing their own individually-based aims at the expense of the overall aim of the system. This is what the role of management was then — to regulate the components and keep them focused on the aim. What is interesting here is that either this means Deming didn’t think that there could be any self-regulation in a system, at least among totality of the components. The other interpretation is that the management in a system constitutes the self-regulatory mechanism. That, however, seems to be a different kind of self-regulation than the emergent phenomenon that arises from the interaction of all the components in a system.

Deming had nothing good to say about competition. Deming explicitly states that competition is ultimately a destruction force, and instead we should strive towards cooperation. At the same time he argues that a system includes competitors, so it does seem that he acknowledges that competition exists. There is perhaps a bit of ambiguity here, but it seems that some form of competition could be beneficial; he describes a positive form of competition when competitors are seeking to expand a market or to provide better service in some way. It does seem that Deming has two views of competitive practice. In the first ‘win-lose’ form, this is ultimately destructive. When companies seek to increase their share of a market or to push other competing companies out, that is ultimately unhealthy. The second ‘win-win’ version would look a bit different: instead of looking to take over more of a market, all the players in some space looked to expand that market so that all would come out ahead. Such a ‘competitor’ is a kind of cooperative competitor ultimately.

The description of systems in The New Economics is not as fully fleshed out as one might hope. There are a number of statements that Deming makes that are simply asserted without any further discussion. The text often refers to another book Deming wrote some years prior, Out of the Crisis and it may be that Deming thought of these books as being companion pieces. Suffice to say in concluding that Deming, given his profession and most of his experience, was primarily interested in systems as they are found in organizations we create. This is clear from the full title of the book, referring to industry, education, and government. While Deming no doubt had a broad view of how systems thinking could be applied, it probably did have limits.

The New Economics for Industry, Government, Education
Second Edition
Deming, W. Edwards

© 1994 The W. Edwards Deming Institute

ISBN-13 : 978-0-262-54116-9