Deming versus Drucker
Management Titans Clash Like Rivals in Ford versus Ferrari
Are you Team Drucker-Ferrari or Deming-Ford? For operationally excellent business results, there is one clear choice.
Both Peter F. Drucker and W. Edwards Deming are recognized as forefathers and titans of modern operational management.
Peter F. Drucker was an Austrian-born American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of the modern business corporation. He invented the concept known as management by objectives.
W. Edwards Deming was an American engineer, statistician, professor, author, lecturer, and management consultant. He was famous for the industrial quality movement that inspired and influenced Japan’s growth to become the world’s second-largest economy.
There is one topic where Drucker and Deming had a significant disagreement. That topic? How to go about achieving business results. Sound important? It is.
Drucker’s position in management by objectives in practical application suggests the ends justify the means. Paramount is the objectives, the business outcomes and goals (the ends) to be achieved. It is far less important how those objectives (the means) are accomplished.
Deming’s position was to respect the required business outcomes (the ends) but emphasize that good management required a methodical and systematic approach to earn those results (the means) over time. The means were very important to assure the ends are met. Deming argued that focusing only on results caused short-term thinking and undesired behaviors that hurt long-term performance, corresponding to item number two on his seven deadly diseases of management.
This assertion is echoed in Driving Out Fear and Other Similarities between Drucker and Deming by Kelly Allen on the Process Excellence Network.
In Drucker’s case, his “Management-By-Objective” approach (which was intended to be used to focus very long-term thinking) was popularized into a quarterly — even monthly — scorecard of quotas.
This was a travesty of misapplication, causing harmful unintended consequences and resulting in what Drucker would call misdirection of management, because “objectives that become a straitjacket do harm.” According to Art Kleiner in his excellent book, AGE OF HERETICS, the MBO management package came to be called a “do-it-yourself hangman’s kit” because if a manager didn’t make his numbers, he was hanging himself. His bonus, and indeed his job, could be in jeopardy
This key difference is caused by a misunderstanding in the application of Drucker’s philosophy. It does not matter. Those two opposing sides exist are waging a quiet war in our organizations today.
Why is this important? Most industrial sector asset owning organizations have strong management by objectives leadership culture. MBO is taught in business schools and endorsed by corporate executives across the globe. Operational leaders are rewarded and punished for their ability to achieve the results, or ends. They will deliver those results by any means necessary, or else. That is their job. In one organization I observed this was called leaders’ “commitment to their commitments.” The default system of management is firmly in Drucker’s skewed misdirection of management corner. Despite Drucker’s good intentions, this feature is real and present in today’s organizations.
In the other corner is team Deming. Professionals, technical practitioners, and support staff care immensely about how, the means. That is their job. This includes all the activities of an organization required to produce its results that are earned, not declared. These activities are reflected in the transactions and decisions within our documented policies, standards, business processes, and procedures as well as undocumented customs and practices. It is what they do, how they do it, and why they do it. The devil is in the details of how all those activities contribute collectively across organizational boundaries to produce the results we deserve from our assets.
Our organizations believe they have alignment but they do not. We all care about business outcomes. Everyone is doing the best they can given what they’re asked to do and with what they’re given to do it. We do not all agree on how to best get there. There is a chasm between senior leadership and its workforce. A quiet and unspoken battle rages on. We feel it but we won’t name it. From this misalignment stems inefficient and ineffective use of our finite resources that adversely affect the bottom line. There is a gravitational pull towards mediocrity.
Which operational management system should we choose for the culture we want? There should be only one. Organizations achieving and sustaining operational excellence results through the means of asset management principles and fundamentals choose W. Edwards Deming. Organizations stuck in mediocrity by chasing quarterly and annual results only choose Peter F. Drucker.
In many organizations Drucker is the incumbent, Deming is the challenger.
This battle reminds me of the famous Ford versus Ferrari competition for racing supremacy in the mid-1960’s. This drama was depicted well in the 2019 movie starring Matt Damon as builder Caroll Shelby and Christian Bale as driver Ken Miles.
Ferrari is the legendary current champion — team Drucker. Ford is the upstart competitor — team Deming. This bitter rivalry was very public.
Ford was highly motivated to develop a new and innovative race car to take on Ferrari. Their ambitions were bold. Their approach had to be different. Failure was not an option. Persevering through several iterations resolving significant technical obstacles, Ford eventually and victoriously knocked Ferrari off the top podium. They won the championship and made history.
Today, I’m playing the role of Caroll Shelby. My new Ford GT40 MK II is in the shop getting ready for the test track. I’m building a new category of enterprise operations management system tailored to leaders and fabricated with sound asset management principles in the race towards operational excellence. It’s a game-changer.
Tomorrow we race with the best means to excellent ends.
My ultimate thrill will be when I receive that precious nod from a trackside Enzo Ferrari “l’Ingegnere” (the Engineer) acknowledging me as a worthy rival in the 24 Hours of Le Mans race — my favorite scene in the movie.