The New Economics for Industry, Government, Education

I have recommended this book in my previous review of "Out of the Crisis" to managers who are new to Deming's ideas, being a manual that will be easier and more effective to comprehend and follow. At the final stages of his life, Deming (1900-1993) wrote this epilogue of his career with an honest attitude and sincerity that I, along with many of my colleagues, admire. The frankness of his opinions regarding the (lack of) essentially fundamental leadership traits in today's modern global societies, in all vital areas at all organisational strata, are both valid and brave; the information voiced is made possible only through his previous experiences and status in the field.
If all managerial leaders of this world were to listen, be able to understand and follow Deming's ideas and underlying philosophies, societies will be enhanced beyond recognition in many aspects.
However, if you are a lone crusader in your organisation or even country, then you are in for hell... but do hang on tight, as the world generally hates challenges in any forms and situations... Implementing Deming's philosophies (as with any corporate strategy) involves innovation by the introduction of new ideas into an organisation, which includes rearrangements from jobs and roles to structures and systems; which people generally hate. Even within the book, Deming had already highlighted the various problems to that, and had always emphasised on EDUCATION of the organisation, rather than decreed training to extinguish corporate flames, for he had said:
"Knowledge is theory. We should be thankful if action of management is based on theory. Knowledge has temporal spread. Information is not knowledge. The world is drowning in information but is slow in acquisition of knowledge. There is no substitute for knowledge."
- W. Edwards Deming 12th September 1993
This is my humble tribute to a great man.

This is the last book written by Dr. Deming before his death in 1993 at the age of 93. Dr. Deming is perhaps best known for the work he did in Japan at the end of World War II, and his famous 14 points. In this book Dr. Deming introduces his System of Profound Knowledge, which consists of: An understanding of Systems,A Theory of Knowledge, An understanding of Variation and Psychology Dr. Deming defines a system as: "A series of interdependent components that try to work together to achieve the aim of the system." The system must have an aim, without an aim there is not system. Dr. Deming explains variation as follows: All systems have some variation in them. The secret is to know what kind of variation is occuring and to respond accordingly. Common cause variation is the random variation tha occurs in any system. Special cause variation is a result of something outside the system acting on the system. An example would be that it normally takes you 25 minutes to drive to work, give or take a few minutes, but this morning, because of an accident the commute required 50 minutes. The normal drive time, with variation represents common cause variation, while the accident represents special cause variation. A theory of Knowledge is a way of doing experiments, or defining a mind set. According to Dr. Deming without theory no learning takes place. He give an example of a rooster that has a theory that he causes the sun to rise because he gets up early and crows. One morning he forgets to crow. The sun rises anyway. While the rooster's theory is blown out of the water he has learned that he is not responsible for causing the sun to rise and in the future he can sleep in. Dr. Deming's discussion on psychology has to do with the difference between intrinsic and extrinsic motivation. His basic theory is that people enter the world motivated to learn and do well and that the excessive use of extrinsic motivation kills the intrinsic motivation. In this book Dr. Deming also discusses in some detail his famous Red Beads Experiment which he uses to demonstrate the power of systems and how they victimize the people working in them.

It can be a little hard to grasp at first due to the terms but he's really just applying the scientific model to manufacturing, business, and government administration. Excellent book once you get the main idea.

I want to encourage people who work in management department or any department that link with management to read this book. Dr Deming gave us good explanation of why hard work and old management system will not survive in this new era. His believed in equality or socialism is the best way to excel while merit system and competition will destroy a company might surprise you, but his explanation and example will make you think twice. His book will also give you a picture about system in organization and how management should make transformation to understand and improve the system.
In the second half of the chapter he will give more explanation about leadership, management and understanding about variation so that management can lead the team to success by making decision from the variation in the process. His example like "The Read Beads" and "The Funnel" will teach you about what needs to be done when there are common cause and assignable cause which create variation inside the data.
In conclusion, this book will give you more knowledge with easy wording to understand. He also put less statistical calculation and focuses more on explaining how to manage organization.
PS: If you believe in capitalism, you will have a hard time reading it, but overall his idea is great.