KEY FOUNDATIONAL CONCEPTS 69
Long-term stability, growth, and prosperity are dependent on goal orientation
towards higher quality, cost-effectiveness and resultant higher productivity. Given
the same capital, labour, and technology, one firm can produce better quality with
higher and continually improving productivity than another, if it possesses
profound knowledge. Unfortunately, in traditional management systems, task ori-
entation towards achieving short-term financial targets takes up all available
managerial effort and energy, while goal orientation towards higher quality, cost-
effectiveness and higher productivity takes a back seat. Manipulating the visible
numbers or the economic variables does not lead to improvement, regardless of
our ability to do so and regardless of the amount of money thrown into the effort.
Deming has said many times, ‘He who runs his company on visible figures alone
will soon have neither the company nor the visible figures to work with.’
5
Profound knowledge helps to identify invisible figures and intangibles, and teaches
us to balance between the visible and invisible figures to become competitive.
VARIATION
Understanding variation is a part of profound knowledge. Professionals in any
organization who are seriously contemplating improving their business ought to
pay attention to understanding variation and the imperatives of variation control.
Control and reduction of variation is one of the key elements of TQM implemen-
tation. The legendary statement of Dr Deming, ‘consistency and constancy of
purpose’ implies variation control in all aspects of management to achieve the
stated vision and mission. Failure of top management to study and understand
‘Variation’ is a serious hindrance to leverage the full potential of TQM. In the
words of eminent statistician and consultant Lloyd S. Nelson, the central problem
in management and in leadership is failure to understand the information in vari-
ation. Walter Shewhart, who worked during the 1920s with Bell Laboratories,
developed insight into variation, its nature and ways to minimize it. Edwards
Deming propagated the utility of this concept, and incorporated it into his treatment
and application of statistical techniques for continuous improvement. He taught
the concept of ‘variation’ to the Japanese who conscientiously concentrated on
variation control through application of statistical techniques, which they also learnt
from Deming. The roots of post-war Japanese rejuvenation are in the understand-
ing and control of variation as well as other teachings of Deming, supplemented
by Juran.
Both Deming and Juran have explained the phenomenon of ‘variation’ through
a simple demonstration. The experiment is quite simple and can be conducted
easily with some modifications. A suitable bowl is selected to accommodate 1,000
round beads, 900 are white and 100 are red beads. Six people are randomly chosen
to take part in the experiment. They are called in by turns and blindfolded. They
are required to stir the mixture and draw 50 beads from the lot. After they have
drawn the sample of 50 pieces and eyes are set open, they are asked to count and
record the number of red beads. Each person has gone through the same series of

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