Ash Moran's Reviews > The New Economics for Industry, Government, Education

The New Economics for Industry, Government, Education by W. Edwards Deming
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's review
Feb 27, 2010

really liked it
bookshelves: books-i-read-in-2010, business, leadership, management, manufacturing, systems-thinking
Read from March 21 to 23, 2010 — I own a copy

I didn't know what to expect from this - and it turned out to be one of the strangest reads I've had for a long time. The tone of the whole book reads like the translation I have of The Art of War.

Despite being brief, Deming covers a huge amount here. The key topics are:
* systems - treating organisations as wholes rather than bags of parts
* variation - understanding why the output of a system is not perfectly uniform, and the impact this has on correct management
* knowledge - building theories to predict the future over merely consuming information noise
* competition - why it is harmful to systems, and how it can be avoided
* leadership - and the importance of human psychology in this

Deming draws on many powerful anecdotes to explain his point. I prefer, however, the more coherent approach to describing systems found in The Goal. Where Deming gets real leverage is in his descriptions of the Red Bead and Funnel experiments. The Red Bead experiment is more famous, and illustrates the futility of judging people according to their part in a system they are largely helpless to control. But I found the Funnel experiment even more enlightening - illustrating not only the terrible consequences of naively managing by results, but how this can distract from simple solutions to improve a process.

Slightly disappointing is the emphasis on manufacturing/repeatable process over design/creative process. Deming makes one reference to design but does not directly tie this into his management style.

Deming has an agenda. He wants to replace the current system of management - isolated, competing business units; reward schemes; ignorance of theory, variation and psychology - with one of co-operation, intrinsic motivation and understanding of systems. And he wants to replace it in all forms of organisation. But as a social manifesto it has one alarming omission: biology. Deming appears to think that the problem of growing larger and larger co-operative systems is just one of more difficult management. But this assumes that all people want to co-operate in this way, that nobody has a personal, conflicting agenda. While a monopoly may be more efficient than a marketplace, and while it may be in the long-term harmful to abuse a monopoly position, that doesn't stop someone manipulating their way into a position of power and taking short-term advantage. The weakness of Deming's vision is, in my opinion, that it does not contain the assumption that some people will always be selfish and/or evil.

Overall, The New Economics is an immensely valuable collection of ideas for anyone in management (or suffering mismanagement), or with an interest in social change. But I suggest having some skepticism for its idealism.
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Reading Progress

03/21/2010 page 92
34.72% "Profound doesn't begin to describe this, but then neither does contentious"
03/23/2010 page 247
93.21% "Thought-provoking manifesto for change, but will need some very careful attention"

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