Deming and Systems in Today's Business World - No Answers Just Questions - I2I

In the last few weeks I've seen a couple of people quote Deming saying "95% of the problems in business are system driven and only 5% are people driven." (Or similar to that.)

Based on that simple statement it would seem that you should spend 95% of your time on improving the process in order to get your biggest bang for your buck no? Seems logical. If that's the case - don't run incentives or reward programs - pour all your money into system design and try to create a system that is fool proof.

But not really...

One of the people that used that Deming quote was @bobcorlett - who runs Staffing Advisors and is a Deming guy. I'm not - I'm familiar but not a scholar.

So Bob and I connected on the phone (gasp! I know - real time, analog) to discuss the quote. My point was that a quote like that would seem to indicate you should worry less about the people themselves and more about the system in which they behave. Bob reminded me that Deming also said a poor system will win every time over a good employee. There is a lot of truth in that as well.

But after a great conversation about people and systems that meandered around a bit, (btw - Bob does not advocate ignoring your human resources in favor of systems) I was left with this thought...

Deming focused on systems because they were the process by which business got done and that's what drove success at that time. A good, predictable, non-variable system produced quality products en masse. Since business was about production of product primarily made by doing the same thing as many times as you could in a quality manner, it made all the sense in the world to focus on the process not the people.

But are we production oriented today?

Today however, our economy changes rapidly, businesses change rapidly, business models change rapidly, technology changes rapidly. Do systems still matter more than the people? Should you worry more about systems or people?

When we were an industrial economy, success was a function of economies of scale, quality and mass production. Controlling variability was a good thing. We wanted to make sure that all the machines contributing to the process behaved within the specifications. The tighter the specifications the better the quality, the lower the costs and the ultimately - the better the product.

But today, it seems to me we are driven more by innovation and new ideas brought to market quicker and incrementally better or through big disruptions. To me that is the antithesis of the Deming formula for managing variability in a system. To me creating variability has more value than limiting it.

Plus - there is no machine in the world with as much variability as a human being. Our specs are off the chart on what is possible.

So, I'm left with this... how much should you spend on systems versus people in today's business world?