Over the years, I’ve worked with several family-owned companies founded twenty or thirty years ago by an earlier generation. Through a lot of hard work and perseverance, these companies could find a niche in the marketplace. They were able to grow and expand their operation from the original few employees to over one hundred. I often see that although they’ve grown in size and revenue, many of the systems they use are remnants of the founders and have not developed into those needed now and into the future. This failure to appreciate systems and their importance is why many organizations struggle with some of the most basic tasks and are why the important work is often done improperly.
In 1994, Dr. Edwards Deming published his famous System of Profound Knowledge. He described how the competencies needed then and now are based on different premises, assumptions, and basic beliefs about people and organizations. These competencies include:
Competency I: The ability to think in terms of systems and knowing how to lead systems. A system is a method by which you achieve results. The failure to achieve desired results is caused by the inadequacy of the system or method you use. Understanding the purpose of your systems allows you to determine whether your system is functioning well, poorly, or not at all. Without a clear purpose, you won’t know how to improve or design the system.
Competency II: The ability to understand the variability of work in planning and problem-solving. As we all know, variability occurs in everything we do. Most of the time, the variability is small and doesn’t affect the products and services we deliver, known as common cause variation. However, there are times when variability becomes larger and does affect our products or services. This is known as a special cause or assignable variation. Understanding the difference between common and special cause variation can help us plan our systems and how we solve the errors and mistakes we sometimes observe.
Competency III: Understanding how we learn, develop, improve, and lead true learning and improvement. To be effective, individuals and organizations must learn every day. Without understanding how we learn, develop, and improve, leaders create several vulnerabilities for themselves and their organizations. Organizations without systems of continuous learning are probably doomed to obsolescence.
Competency IV: Understanding people and why they behave as they do. In the lobby of many organizations, you see the slogan “People are our most important asset.” Our rhetoric is humanitarian, but our premises, reflexes, relationships, and leadership behavior are not when we look closely.
Competency V: Understanding the interdependence and interaction between systems, variation, learning, and human behavior and how they affect the other. Whether it is a problem to be solved or an accomplishment to be attained, anything of importance involves an understanding and application of all parts of the system of profound knowledge. We must learn to see all the parts as being interactive, interdependent, and concurrent.
Competency VI: Giving vision, meaning, direction, and focus to the organization. To maintain the cohesiveness of an organization and the integrity of its systems, all the members of an organization need to know the following:
- Who are we?
- What business are we in?
- What business are we not in?
- Where are we headed in the long term?
- What are the priorities for the short term?
- What values and principles should be characteristics of all our relationships and all of what we do?
- What is my own personal job, and how do my functions and operations fit into the larger purposes and systems of the organization?
- What is the best way to do my job, and what is expected of me? By whom? What is a good job, and who defines it?
- How will improvement to my job be accomplished? Who will make the improvements, and by what methods? Will I be involved in these improvements? How?
- What sources and forms of feedback are available to help me know how I’m doing?