94% Belongs to the System

I should estimate that in my experience most troubles and most possibilities for improvement add up to the proportions something like this: 94% belongs to the system (responsibility of management), 6% special.

Page 315 of Out of the Crisis by Dr. W. Edwards Deming.

the system that people work in and the interaction with people may account for 90 or 95 percent of performance.

Dr. Deming’s quote from the introduction to the Team Handbook

I think, in looking at the total of Deming’s work, that the point he is trying to make is that looking to blame people is not a good strategy for improvement. The impact due solely to a person’s direct action (not including their interaction with the system and with others) is small in comparison to that of the system within which they work. So, Deming (and I) want people to focus on improving the system; which will achieve better results than searching for what people did wrong.

What did Deming want people to take from his statements?

Did he want us just to accept bad results? No. He was not saying it is the system there is nothing we can do just accept that this is how things are. He wanted us to focus on the most effective improvement strategies. He saw huge waste directed at blaming people for bad results. He wanted to focus the improvement on the area with the greatest possibility for results.

Did he want to say people are just cogs in the machine? No. Read or listen to most anything he said at any significant length (a full chapter of this book, a full article he wrote on management, an hour from one of his videos) and it is hard to maintain such a thought.

photo of forest trail

Pinetree Trail, Frasers Hill, Malaysia by John Hunter

Did he believe that people were not important? No. He was trying to direct the focus of improvement efforts to look not at the fault with one person but to look at the system. I believe strongly he was correct. If you blame a person as the root cause of a problem, my first, second and third reactions are why? why? why? It is possible the person is to blame and there is no benefit to exploring system improvement instead of settling for blaming the person. But that is rare.

I have written about the importance of developing people to build the capability of the organization. My father wrote about it previously, “American organizations could compete much better at home and abroad if they would learn to tap the potential information inherent in all processes and the creativity inherent in all employees.”

I wrote about the importance of the ideas behind Deming’s quotes here, back in 2006 – Find the Root Cause Instead of the Person to Blame

Why did he see it that way, while so many others first inclination is to blame someone?

As I see it the issue has to do with what is the effective way to improve. Often if you ask why do we have this problem or defect, people will point to some error by someone. So you can blame that person (there are reasons this is not a very accurate way to view the situation often but even without accepting that premise the blaming a person strategy is not wise). The reason the blaming a person is a bad idea is that your organization will improve much more effectively if you keep asking why.

Why did they make that error? Why did the process let them make that error? When you follow the why chain a couple more steps you can find root causes that will allow you to find a much more effective solution. You can then pilot (PDSA) an improvement strategy that doesn’t just amount to “Do a better job Joe” or “that is it Joe we are replacing you with Mary.” Neither of those strategies turns out to be very effective.

But investigating a bit more to find a root cause can result in finding solutions that improve the performance of all the workers. What kinds of things? You can apply poka yoke (mistake proofing) concepts. You can institute standard practices so that everyone is using the best methods – not whatever methods they have developed over time. You can rearrange the process to simplify the steps and eliminate chances for errors. These improvement, and many more, are sustainable and can be built upon over time.

There are some who seem to take Deming’s intent (which I believe it was an admonition against so many management system blaming people for things that were out of the individuals control) as a lack of concern or respect for individuals (or respect for their talents, efforts, abilities or contributions). Looking at this one quote I can see how someone can make that mistake. But looking at all of Deming’s work it is obvious he believed deeply in training and eduction of employees. He believed deeply in removing the barriers that rob people of joy in work. He, as much as any other leading management thinker of the 20th century promoted the importance of treating employees as deserving respect. Failing to consider his whole management system leads to misunderstanding the meaning behind quotes, it seems to me.

I don’t think Deming’s choice to quote the figures was the best decision. I think he was trying to give additional weight to saying something like the system accounts for much of the results. Using the figures leads to the next question; which is what the operational definitions used to collect this data are. Which can’t be answered because the figures are not based on collected data. But that is my opinion, Deming did use the figures.

Related: Appreciation for a systemFiring Workers Isn’t Fixing ProblemsEveryone Deserves the Opportunity for Joy in WorkCreate a System That Lets People Take Pride in Their WorkPeople: Team Members or Costs

Here are some thoughts on this topic I shared in a comment on this blog previously:

I agree with the idea that the 94% figure is questionable to begin with, and may be even more questionable in knowledge work. I do still think that most organization should shift to looking for solutions based on the entire system and not looking at individual people and special causes (even not just people).

So I agree that the 94% figure is not of much value. Saying it is 94% or 80% really makes no difference. Even saying it is 60% doesn’t change anything. It doesn’t actually have any impact on what action you are supposed to take. For an improvement effort a special cause or common cause strategy will be used (I believe far more often, a common cause strategy will be most useful in knowledge work organization). And in general special cause issues are of lower scope and have a lower impact (therefore just counting the number of occurrence probably underestimates the importance of system issues (versus special causes). But, in any event I certainly can see reason to question 94%.

Deming repeatedly experienced managers and executives blaming people for results that the system made likely. And in the many cases when the people that were blamed were replaced the results didn’t change. The system continues to produce the same results.

Now you have to be careful: often we can be mislead by “regression to the mean” into thinking a system that stays the same got better after some change because we take action when these odd events happen and the system would have “regressed to the mean” without a change or a random change too.

I do believe certain people (leaders, technical masters, insightful engineers) have an inordinate ability to take heroic action to overcome systems (which is another argument for reducing the 94% figure). They can both work miracles and be extremely difficult to replace and maintain success. The best possible result, in my opinion, is to capture the remarkable benefits of these exceptional people and create systems that are robust. This means creating processes to track and manage success, use check sheets, monitor in-process measure, use kanban and agile methods (to have system that are much more robust)…

While I accept the arguments that knowledge work is different (and thus the 94% figure shouldn’t be considered) I have found I don’t share a frequent desire of those making that case. Which largely amounts to “let heroic knowledge workers be free to creatively build success without all your controls making them into robots that can’t find inspiration for their gifts to flourish.”

A recent blog post touched on some on a similar idea, How much is your success dependent on those around you?

You’d think that doing thousands of heart surgeries would make you better at them.

Not necessarily.

Surgeons only got better at their home hospital: the one where they knew the team best and developed strong working relationships.

If you actually read all the way to the end of this post you may be interested in my book – Management Matters: Building Enterprise Capability.

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15 Responses to 94% Belongs to the System

  1. Daniel Lang says:

    This drum can be beaten ad infinitum. Most just do not get it.

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  3. Francis Fish says:

    I think there’s a fundamental misunderstanding here. When you do statistical analysis you look at populations of results, typically you have a null hypothesis that states ‘the figures I see are from the same population with a 95% confidence’, as in the hypothesis is that they are not, there is some effect.

    Deming’s point was that when you look at the numbers, bullying and heroism, in the long run, don’t make a difference to these figures, they don’t move with any significance – it’s just statistics, it’s like the laws of physics. The deeper point is the figures come from the system itself – and that’s where changes need to be made if you want different results.

    So it’s just statistics 101, looking for differences in populations of results, and finding none.

  4. John Hunter says:

    No, Francis, that is not it. In Dr. Deming’s career he talked, for decades, about the flawed thoughts people have when applying statistics 101 ideas to business improperly. They use statistical ideas for fixed populations (where enumerative studies and confidence intervals make sense) to analytic situation without fixed population (such as the results of a process over time – and such situations produce most data important to business).

    You can read more about the issue in my post on the Deming Institute blog on Enumerative and Analytic Studies (with video from Mike Tveite at the 2012 annual Deming conference). The post also has links to more resources on that topic.

    Your statement:

    “The deeper point is the figures come from the system itself – and that’s where changes need to be made if you want different results.”

    is correct.

    Deming has written a great deal on sampling and such topics including several books, and several papers available on the Deming Institute web site.

  5. David Schwinn says:

    Well done. I just wandered upon your blog looking for the source of Dr. Deming’s “94%” to include in my “Final Lecture” this term in the Managerial Statistics course I teach here at LCC. Your dad was and would continue to be proud.
    Keep up the good work,
    Dave Schwinn

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  13. Tim Walker says:

    Is the 94% wholly unnecessary? It is the sum of all things in the system that creates outcomes, good or bad, and it can be no other way. Even shadow-systems emerge from the system.

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