Транскрипт и пересказ интервью Эдварда Деминга #2

Деминг - теоретик менеджмента, который является прародителем Японской системы постоянного улучшения качества.

Зачем? Качество аудио - полное говно, а вот сам материал мне очень интересен.

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I: Dr. Deming. In order for American industry to be competitive in world markets in the years and decades to come, a transformation needs to take place in management. Part of that transformation, in order to make that transformation a lot of training needs to be done among other things. Right now there's a whole lot of training going on but there is some good training and some bad training and I was wondering whether you could comment on some of the problems you see in current training programs.

D: I don't know what to mean by training but I know what I mean. The training has got to take place in the management and I mean top management. If you speak of the decades to come, I think you may be aware that Western industry, and including American industry, has been on the decline for years. They can't hold a market at home or abroad. That's not true with every product as you know but it's true with most of them and it's adversely affecting the balance of trade. The market has been declining because American stuff on the hold does not hold, cannot compete at home or abroad. A new kind of management must take place that must be quite different, totally different! from what management has been accustomed to. The management if you ask me, I'd say there's lots to talk about quality but very little action. In fact I think, my impression is and I have some reason, some basis for my statement that most management is unaware that anything has been happening and if it has certainly had nothing to do with it. How could there be anything wrong with management and we did so well?! In the decade 1950 up till 1968 or 69 American stuff held a market the world over. Well what could be wrong is that we didn't do a good job. The answer is that they did a reed job and are still doing it. The decline has set in because of failure of American management. Unemployment is not inevitable. It is the result of bad management. People go on the street for the loss of the Market. I don't mean that there can always be success and never any loss of Market, but loss of Market comes mostly from bad management and people go on the streets because of bad management. Lost the market. Can't hold it. it's so ridiculous to me to think that uh that Americans can't do it this is sheer nonsense. Management of course thinks that it's for the other F top management has no awareness of what their job is. How could they learn? You cannot learn the job of management on the job. Experience teaches nothing without the in theory may be only a hunch it may be a wrong hunch. But unless you ask questions and learn nothing. In management or any or in any other profession. Now management is unaware that they have a job. I'm speaking generally. 97-98% of management are unaware that they have a job! If the Market is lost because of bad quality then they think that it's the fault lies in the factory floor. I receive in the mail, perhaps two times a week, plans that some people in management have for improvement and it's always for the other flaw. Always for the factory floor if they would turn out better quality we'd have better quality. I haven't seen a word sent to me on any page about what management must do.

The fact is that management must do most of it. I could recount to you an example where with a simple suggestion the company saved as saving from here on out $186,000 per day. Now that sounds like a lot, sounds terrific. Did you know that's only about 130th as much as the total most of the rest must be accomplished by the manager they have no idea of the magnitude of their job it's staggering and they have no idea what it is and they could not learn on the job

I: if experience will not teach them what they need to know for their job, how are they going to learn it?

D: They can learn only by listening to somebody on the outside. Their impression is that somebody that does not know the company that is not tramped around in the factory and not helping them that's ridiculous. You mean that they don't have anybody that knows anything about the factory. They have hundreds of people that know a lot. They know everything except what's necessary to know for improvement. They know everything else.

I: how can our education system help prepare people better for management positions

D: our educational system could teach the obligations of the responsibilities of top management. What happens when they fail? What happens when they see the responsibility as an act and I don't mean that results will always be good, or great, or that they'll take place immediately course it's a lot of management when they think think that something can be done is looking for uh instant pudding not knowing that uh in my estimate it'll take three decades for American industry to stabilize. Have to be a lot of changes in management and a lot of changes in government. But a lot will have to happen within two years Mr Shuren and I mean in two years the time fuse is running pretty short and a lot of activity will have to be obvious. The results obvious within two years or the decline will get worse sharply.

I: Could you explain what you mean by instant pudding?

D: By instant pudding I mean people that write to me these words: "please find a day to come and spend with us what you did for Japan."

A company on the west coast called me yesterday several times begging that I would spend a day with 300 people in management. I declined because they would learn nothing in three days, in one day they'd learn nothing. They would only come away confused. I fear it takes time to learn what the job is and then time to put into action what has been learned and with help. I mean it's a big job. Management has no idea how big the JW is or how long it will take but I'm telling you a lot of activity will have to be obvious within two years or the decline will bend down pretty sharply

I: where could management start in trying to learn their jobs?

D: It's possible to learn. There are publications, there are seminars in which they can learn what their job is they will not wear it on the job.

I: So far I have to get help from the outside so far what you've said evolved, involves management relearning their job for first of all finding out what the job is and not once have you mentioned statistics or statistical thinking if you will use SPC. I was wondering why that hasn't come into the conversation?

D: well it does not always come into the conversation but it does come in sometimes the somehow or other it's some people have the idea that improvement of quality comes solely by application of statistical methods and the record is very clear and clean that within 3 years you cannot even find smoke where the methods were in spite of brilliant accomplishments. The company goes broke or the impact is so small by comparison with what is required that it all just disintegrates. The job of management as I said is staggering. People in management for the most part have no idea what their job is or how important it is. How could they know if they knew if experience would teach Mr Shen back why we are in this predicament? There is only one answer: experience does not teach.

I: how could the educational system in the United States perhaps from the grade schools on up through universities help educate management?

D: There's a lot to learn. One could make a statement. I would sign it. But I think it would be misleading it would not be understood by the non-technical listener that had even a fuzzy understanding of variation would understand a great deal about management about supervision which is management responsibility, one of their great responsibilities, would understand procurement better would understand manufacturing better we understand the service industries better would understand sales better. This teaching of variation could start in the 8th grade if not sooner. In fact people learn a lot in the ninth grade about probability but I'm afraid they learn not what's wrong but they deal with idealized situations and without applications that are important. For example my good friend Dr. Lloyd Nelson who now works for Nash Corporation makes the remark that engineers are taught that if you want to know how wide something is for example this piece of wood here you just measure it then you know. But if you measure it twice you get another number and now you don't know! So it's better just to take a deterministic point of view, measure it once and you know. My friend who's deceased now Professor Fred Stan was talking to the head of the organization of pharmacist I don't know the actual title of the organization but the man wanted to know something about the work that Professor Stefan was in and he made the remark well now you weigh something on balance you get a figure number of grams, milligrams you weigh again you get something else and now you don't know but the way it is and you have to work with variation the man said not our trade we have to be right right the first time no errors in our work are permitted. It's uh that's the way people view it. Do it right there's a lot of talk about doing it right the first time, how can people do it right the first time and they don't know what the job is. How can they do it right the first time and the stuff is already defective. So simple to management when they know nothing about it. If you ask what are some of the jobs of management let me just recount one or two only one or two. Number one two sources of supply for someone item for example well take uh any any part of this pin one of the different parts could be made in different factories could be and you might have two three or four suppliers of this of this. Part better to have one in the transition that is going to take place transformation there will be one supplier for anyone item now this will take time it'll take years to work with two doubles your responsibility to work with your vendors. There is no company that has knowledge and manpower to work with one supplier or even a half a dozen items that loan hundreds for deals. There's no company that has enough knowledge or manpower and power to work with one supplier don't tell me that you're going to work with two or three or four. Absolutely ridiculous. Management does not know that the emphasis is on the quarterly dividend. The emphasis should be on the consistency of purpose to stay in business as an institution of the company regardless of who comes in as president. There should be security of jobs in management and not the necessity just to go along playing politics to hold a job. These are some of the problems that management must face. I find that management can face almost anything except the problems of people

I: mhm

D: Maybe some of them live in constant fear of their jobs. Companies going on the Rocks they're in Terror they see cost going up, market going down. Problems all their own and taxes. They can face those. They can face them together sometimes in teamwork but when it comes to problems of people, they cannot act. They turn the job over to somebody else. They're two classes of problems I'd say with people: one is with the hourly workers on the factory floor. There's a place where there need not be any problems. The factory worker I find the world over and this has been true for decades and I have some way to know has always been interested in quality not only interested quality means his job! Fair equality in the hands of a customer means that he loses his job.

He goes to work every day in terror of his job and does not know whether he'll have a job next week or next month. He is the only one they tell me they are the only ones interested in quality all they ask for is a chance to take pride in their work and I if you ask me I would say not to already work workers factory workers in 100 can take pride in their work

I: What are some of the barriers to them taking pride in their work? Why can't they take pride in their work?

D: One of the big barriers is emphasis on quantity not quality. They tell you the management talks about quality but if we don't get out the numbers we won't have jobs. That's what they tell me. It is not what management says but perception and rumor is what runs the company. Now as long as quantity governs, then anything will go. Incentive pay for example is bad management because the job is to get out so many good and bad makes no difference get them out! Getting higher pay incentive pay is almost a sure road toward poor quality and uh along with it loss of market. Another barrier is uh material is already defective no matter what you do you cannot turn out a job that you could take pride in. Another is tools that are bought at cheap price but which wear out in a hurry or break take time to replace. Hourly workers complain about spending time on repair waste. He doesn't like it. Takes time to change tools. Takes time to try to hide defects already in the material. He doesn't like it. There's nothing you can do about it. If you can complain with the foreman more than three times he becomes a Marked Man. If anybody has to go, you're a good candidate. Complaining about maintenance. Machines not working properly. More than three times you become a Marked Man

The foreman has to get out so much today. Most foremen know nothing about the job he can do nothing about a problem it does turn up is helpless

I: can you blame the foreman though?

D: No, I don't think so. He has a job perhaps not to his liking he was put there. As a matter of fact some foremen are very much afraid that they'll be put back demoted to hourly workers if they don't get out of the quota. Consistently day by day

I:mhm

D: a lot of foremen don't know the job, never were on it! and no way to learn it! and he can get no action. You hourly workers tell me you go to the for and with a problem he just smiles and walks away. I think I can tell you why in the first place he does not understand the problem. In the second place he could get no action on it if he did understand it. The other part of the problem with people is in the management: people in management cannot do their work to their satisfaction. They don't dare! They work in fear of having an idea or presenting an idea that is at variance in any way from policy decided by somebody else. Better not to have an idea just go along. This is why a lot of people cannot put their hearts and souls into the job because they think the policy is not in the best interest of the company. And they have no voice. No way to present ideas and to defend them to talk them through or to talk about other ideas in other words no teamwork. Now this is not 100% true. I work only with companies that I think are good and advancing. I don't work with the others.

There's a lot of good Management in this country but we don't have time to talk all about it today

I:mhm

D: the annual rating on performance for example robs people in management of their chance to work for the company. They don't dare they become politically minded. Go along. Don't take any point of view at variance with the policy that's been decided. Everybody becomes a little businessman by himself, becomes a politician. Go along. The annual rating has a lot of negative effects.

The first place most annual ratings by most I mean 99% are mere lotteries. Somebody that gets a low rating is there by lot somebody gets a high rating is there by lot. No account taken of the fact that most of the differences between people come from the system itself. That could be taught in the 8th grade in the ninth grade and the 10th could be taught in community colleges. It's not taught in schools of business because there's nobody there that knows it, nobody could teach it because nobody knows about it.

Community colleges could teach it, they'd have to teach it but they're in a position to learn. I think to understand that most and I mean 99% of performance ratings of people in management are nothing more than a lottery. There's only one little trouble people don't see as a lottery: he that gets a low rating feels inferior. His manager considered him to be inferior. What he does is he looks for another job which accounts in part for the mobility of management in America which is helping to destroy American management, American industry. It makes him despondent in despair for weeks after receiving a rating especially if he had a good rating last year over the last two or three years and to receive one lower puts him in a very desperate condition. If you could understand that it's a lottery he would merely feel unlucky. Unfortunately everybody in management thinks that he can rate other people. I don't know how all this ability comes from because for the most part I have no way to measure and never knew that there was a way to measure how much of the apparent differences between people come from the system itself and not from the people.

It is certain that if you have 10 people uh one of them will be at the top and one at the bottom on any method of scoring whatever I don't care what it is. I don't know whose theorem it is but it must go back a long way; that of 10 people or 6 or 5 or 100 somebody will be at the top and somebody will be at the bottom. That you know before you start you don't know who it will be but to be in the bottom 10% usually means nothing at all. Somebody had to be there meaning nothing. To be below average means nothing. Most supervision consists of finding who is below average and doing something about it. They have no business being there.

You have no business being in the bottom 10%. If you have 10 people one of them will be in the bottom 10% and there's not much that you can do about it. That indicates nothing. It is necessary to know how to discover who is outstanding on either side that could be taught in community colleges. For example, it could be taught in high schools. So far as I know it's not being taught the fundamentals are being taught but without the application of the or is being taught but totally unrelated to application the applications. are all around this

I: Could you mention the couple of articles that you saw first in the London times and then I believe the Wall Street Journal to further describe what you mean by above average and below average.

D: well I you saw it too everybody saw it there was an article in the US News and World Report and perhaps surely in other magazines and certainly in newspapers that a committee of historians had made a study of our presidents from George Washington on downward and discovered, Believe It or Not, Mr Shen back that half of our presidents have been above average. We have a lot to be thankful for. suppose that they'd all been below average. They seem not to know that no matter what scale of rating you use for our presidents, no matter whether it made sense or not, half of them would be above average and half below. That roughly a quarter of them would appear to be great because they were in the upper quarter. There Is no escape from it. Been known for centuries now rediscovered with a very important pronouncement that half of our presidents have been above average. How lucky we are!

I: exactly so. Doctor I want to break your train of thought but we talked about something this morning and I thought it was extremely interesting and that is your thoughts on labor, the hourly worker as a commodity if you could explain a bit. Tell that story if you would uh

D: Mr Shen came back with something interesting and I could go on and on but I'll get stopped. The one way to learn something about the company is not only a part of the company, but a way to learn something about the factory floor that is important. management has as you know, I've outlined 14 obligations and obligations to abolish deadly diseases.

But the factory floor is important. But to learn about problems on the factory floor you have to talk to people but you cannot learn it by walking around. Somebody described good management as managing by walking around well. It helps to walk around a little bit so you do not learn problems that way. Everything looks rosy. To find problems you have to talk to hourly workers in a group and get them to do the talking. Just ask questions and start them off on what the problem is. What robs you of your pride of workmanship.You'll find out first off they'll bring it up that they would like to take pride in their work they bring it up themselves now what's holding you back why can't you? And they'll tell you a lot. And that's the only way you can learn about the problems of the factory floor you'll learn for example that having two vendors for the same thing that you they learn to use this part that comes from one vendor and it may take 15 minutes up to 2 hours sometimes a week to learn how to use the same part just as good that comes from another source. Unbelievable! as one hourly worker put it to me equally good but different management doesn't know these things. Purchasing department doesn't know about them their mandate has been been to get the lowest prices on everything never mind how they work so they get bids from several different sources and all the sources have to meet the lowest when their job when the purchasing department has job to get the lowest prices they defeat the company because minimizing cost one place may well be maximizing costs at another place and hence maximizing the total cost to the company. Only management can understand, only management is responsible, and I mean top management or looking at the company as a whole to minimize total cost and not the cost here or there or there. To get departments staff areas to work together is difficult in the face of the annual rating. Difficult for people to work together. They get rated on their own performance own performances individually

I: What I was talking about is your observation that you can't blame the union worker for wanting to get the highest salary because he's treated as a commodity. He's here one day gone the next you go to the Chicago Board Of Trade and that's the price you pay and you can get it.

D: Let me give an example I met not long ago with 40 skilled Tradesmen they were working overtime, sometimes 2 hours, sometimes three but not knowing till 30 of any week whether they would be called back to the company next week. They might be called and they might not and one of them remarked "we are a commodity" and I saw the connection. There is a commodity on the Commodities exchange you don't have to buy anything today you can defer it till tomorrow you don't have to buy anything. They are commodities they may be bought next week or they may not be. Naturally they ask for the highest price if you had something for sale on the commodities exchange. I think it'd be a fool to take anything but the lowest price you could get for it today. I don't know why you should? You're there for the highest price. They are treated like commodities, bought and sold like commodities. They naturally ask for high prices, the highest that they can get, just as any of us would if we had something to sell. People ask for security. People would like to know if they're going to have a job next week and it's true with management as well. Perhaps even more so. Perhaps they have a right to know something about the plan of the company. Will we have a job next week? Will we have a job next year? how can somebody devote his knowledge to the company and do it with devotion but is not sure if he'll be there next week, or next year, it's a little difficult he'll be looking around for another job. If you have any sense in any ability to be trying to look out for yourself nobody else is doing it. These are some of the problem management must face

Another one is running a company on visible figures only. Now visible figures are important, you dare not wake up some morning and find that your bank account is overdrawn, you have vendors to pay payroll to meet taxes to pay. Somebody got to keep the books in balance and he has to have some idea what the costs are going to be. Unfortunately he has to make some kind of calculation on what the sales are going to be but he runs a company on visible figures only I'd say will have neither company nor figures give them a little time.

The most important figures are unknown and unknowable. That comes from my good friend Dr Lloyd Nelson. The most important figures are unknown and unknowable. I can tell you about some of them. One example is the modifying effect of a happy customer that brings business into the company, another one is the multiplying effect of an unhappy customer that warns his friends and some of his enemies about his experience. Another one is the multiplying effect that comes from a group that is able to make a contribution to the company as a team. They see their jobs now not just as appearing in the morning, going home at night, and receiving a paycheck. They see their jobs as important. We're helping the company to improve. Their life changes. I see them. They have an interest in the company that takes teamwork and it takes good management to bring that about

You spoke of some of the other problems of management. One of them you must have had in mind when you asked me is for example rating of departments and divisions at the corporate office. I see a lot of it and unfortunately I must tell you that a lot of it makes no sense at all. Rating divisions on what is unimportant not seeing what is important.

For example rating the manufacturing division on ability to meet specifications not to meet specifications is important but I'll tell you something far more important than that is continual improvement to shrink the variation of the measurements of whatever it is that they're making. Continually shrink the variation because as you shrink the variation, in other words improve the dependability of the product and improve its quality, your costs go down. This chain reaction which the Japanese management had seen that had not emblazoned on the wall but which became a way of life that my work with them in the summer of 1950 is important. This Chain Reaction merely says that as you improve quality you decrease your cost. You can lower the price. You capture the market with better quality and lower price and to keep the company in business you provide jobs and more jobs so simple. Then management under those under acceptance of this Chain Reaction knowing what management must do to improve quality then the people on the factory floor and management have the same aim improve quality but shouting about improving quality will not do it you have to know what to do

I: so in the long term you will be able to choose suppliers on quality as well as cost because the highest quality will cost less certainly not today but in the future.

D: Yes, as I mentioned, the trend must be for companies that survive to be one supplier for any item. How do you choose that supplier now? Sometimes there are all kinds of problems. Believe me, follow me around and you must know many kinds of problems. Sometimes one supplier cannot supply you enough today you need to three in order to get enough of an uncertain supply, but to choose one to work with to develop on a long-term agreement with long lead time you require a vendor that plans to work on his problems of management in the same way that you were trying to work on yours that I mean as I said long-term arrangement long lead time and can be only a gentleman's agreement. Now eventually that supplier will give you better quality at lower and lower cost year by year better and better quality lower and lower cost. This is what must take place, this is what will take place amongst companies that survive.

I: want to change my thoughts a bit. There's been a lot of SPC training and a lot of control chart training going on. Could you comment on that?

D: Well control charts are pretty important in the right place but all told, all put together in spite of meteoric accomplishments, one I mention $186,000 per day not to sneer at is such a small part of the total accomplishment but though it seems huge it is almost insignificant compared to what management must do. And the management for the most part I'd say 99% even of those that are aware of a need for change are totally unaware of their responsibilities, what they must do, how they could learn, certainly not on the job. And they think that it's purely a matter of teaching enough people the statistical methods. The record is clear and clean so far, no exception. Within 3 years it's all blown away, not even smoke left. No sign of it. it's a way of ducking out. Management can delegate and I think in good management you should delegate. Top management can't do it all but I think in order to delegate something you have to know what it is that you're delegating and if you can't do it you can't delegate. You better not. Management can learn and they can learn from someone that they delegate to but uh p C statistical process control or SQC Statistical Quality control sounds great but it's a way of ducking out. Delegating it supposing that this solves all the problems. Unfortunately it doesn't no such thing

I: I see also in the teaching of control charts that a lot of it is done in the absence of the overall management philosophy. It in many cases is taken out of context and if you would comment on that?

D: This is most unfortunate and what you say is absolutely true. In fact , I don't know if there is an exception . Maybe I know one exception. Maybe I know two teachers that understand the responsibilities of management and teach statistical methods as necessary. Teach where and when they can be useful. I would also say that he that understood statistical methods even had a fuzzy understanding of variation as I said before would understand the problems of management including the problems of supervision, procurement, manufacturer, sales, personnel. You'd understand those things and you'd understand what's wrong with the annual rating.

I: In order for management really to change company systems to remove those barriers or Inhibitors as you call them, they really have to understand variability so there's no delegating as you say that responsibility. They can't say well it's for my people not for me or for manufacturing not for me. This isn't the quality control the use of control charts that it was decades ago or even or even 5 years ago as it was understood.

D: no, I'm afraid that the teaching is pretty shallow it need not be but I'm talking about this world as it is not what it ought to be nor am I talking about the next world have this one have to work in this one for awhile

I: you had mentioned several times in the conversation that the word fear came up. Could you explain more about that and why you think that it's perhaps one of the first things management needs to look at in trying to change company systems?

D: Here, as you would lead your listeners to think, is one of the severe problems taking a terrible toll: where are the controller's figures on the losses from fear. He doesn't have them. they're enormous. Nobody knows the magnitude of fear that people have of having an idea. Don't have an idea. Go along. Don't be accused of treason. Go along. Play politics to get ahead. This requires fundamental change will require abolishment of the annual rating and and putting this place supervision and help to people development of teamwork so that people can work together

I: could you name some other company systems that could contribute to fear. You've mentioned the financial management system perhaps and you had mentioned the personnel evaluation system.

D: well you see it even on the factory floor for instance I could play a tape for you and it's in my book Mill right feeling of bearing feeling it getting warm, dangerously warm, said to the forum we ought to stop and take care of it now if we don't and they freeze on us and score the shaft for knew what to do. The foreman knew very well what to do for the good of the company. Repairing it takes 20 minutes. Said his answer was we can't stop now we have to get out all these castings today did not dare stop now but he didn't make it the bearing did freeze it did score the shaft the plant the line was down 4 days they got a new shaft from Baltimore and then installed it but he did his job he was in fear of his job he might not be for it tomorrow if he didn't got these castings out all he could do was try he did not dare do what was right for the company.

This pervades the whole company. Fear that hourly workers don't complain about maintenance tools that don't work or that are soft materials already defective or hard to work with. Complain three times you become a Marked Man. Fear is worse in the management that dare not have ideas. Go along

I: Would you comment on The Daily production report or daily sales reports?

D: I can't think of anything that would be more confusing than daily figures on anything. I would find it difficult to interpret them. I find that yesterday's figures showed lower production than the day before. What happened? Overreacting over anything that happens only makes things worse. It's unbelievable! But so easy to show in fact you don't need a computer, you could show yourself. Just to take a simple example uh if your job was to hold a gauge at 3.6 and this is directly translatable into study of daily figures or weekly figures on sales, production, number of defective items, anything whatever.

Reaction, immediate reaction to anything will only make things worse. You don't need a computer you could do it yourself by jiggling some apparatus and reset it, fine tune it, at every jolt to bring it back to the nominal value say 3.6 whatever that might be, anything that happens, we adjust something went wrong no matter what if it isn't right on the target something went wrong or if it goes down and you'd like it to go up something happened that over action and you can show it for yourself you don't need mathematical theory though mathematical theory will give you the same answer you only elevate you expand the variability and you make things worse unbelievable you but you can show it so easy that could be taught. That could be taught in the 8th grade and the students would be fast fated with it would teach them something about this world just as chemistry teaches about teaches us about this world or physics, or paleontology, or history, or languages that would teach them something vital and unfortunately they learn nothing about it. They don't learn it in school, they don't learn it in engineering courses they learn it in statistical courses but without application not enough application they don't get it in School of Business and they somehow go into Management on the supposition that they can manage when they have not requirements have not the rudiments of knowledge that is required for management. Most unfortunate, and the result is as we see it results are are obvious. They're in the papers, they're in the books. The decline of American industry. Very interesting that Japan had nothing and still has nothing: no natural resources, no oil, no coal, no wood, no iron ore, nothing of that, a little bit of water, power, no oil. But they have people and they have good management. We have some natural resources we have people and we're on the decline. There are problems in Japan I know very well there are. But they've created this world's greatest display of Industry out of nothing but people and good management; starting with negative net worth from reputation for sort equality, cheap consumer goods, cheap but worth the price. In spite of that handicap, look at what they've done. Think of the storehouse of skills that we have in our 8 million unemployed. A lot of them are willing to work, some not only willing to work but have skills that are vital to American industry. Think of that loss. Think of the far greater loss of the millions of people in management that cannot work, dare not deliver to American industry what they're capable of delivering, dare not put that all together this may be the world's most underdeveloped Nation. We're number one. We did it again.

I: seems to me that there is a very good parallel between your characterization or observation of Japan after the war having nothing but people and management and very little resources and any individual community in America certainly they have people as resources limited number of in any one Community a limited number of other natural resources it seems to me that the communities could coalesce and work to develop the management resource now I know several groups throughout the country are looking to implement first of all understand and secondly Implement your 14 points. I was wondering if you could give any observations or pointers or perhaps reveal some of the experiences that some of those groups have had. For instance Jackson, Michigan uh the goal people out in San Diego and those are those are just to name a few

D: I think that you have been reading an article in the last Atlantic which I haven't even finished because it came on yesterday or the day before. The title being the wealth of cities. Adam Smith wrote The Wealth of Nations. It's not Nations but cities at the time he wrote it the nation was a city I mean it was only the cities that counted. I think the author forgot that the one in the Atlantic is magnificent. You're so right. Let us say that no Community needs to be poor if it has people and good management. No country needs to be poor if it has people and good management. Don't ask me where the good management is going to come from. That I cannot tell you. But if they have people and good management they need not be poor they not need not be wealthy either but they need not be in poverty.

I: I know you told me not to ask you but where could good management come from? How can you develop good management within a community?

D: I think that they only need to get away from the supposition that they can learn on the job. They need to simply adopt the point of view that there's a lot to learn and that we can do it! Doesn't make any sense to me that we should be the world's most underdeveloped Nation. Doesn't make any sense to me makes no sense to me that American industry should be on the decline. Or you are going to get good management from. It'll have to be developed and you certainly can't import it. I don't know where you'd get it. You might say well Japan has good management. They do have a lot of good management but that doesn't mean that you could transplant it here and make it all work. It'll have to be developed. I can't think of a better question . I think this is terribly important. It'll have to be developed and could be developed within communities. For example the gold project for Lawrence Massachusetts. Top management there could learn what the job is. Maybe some of them will. Maybe some of them are learning and improving. Philadelphia has started one that nobody knows will happen. They're totally up to their top management. But so many of them and you brought it out earlier think that is instant pudding. Just tell us what to do and we will do it. A company on the west coast, as I said, called several times. Can't take no for an answer to come spend a day with us tell us what to do. That's all that they need. If we can't come one and a half days, we need to know what to do! Unfortunately it is a long learning process.