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Mr. Edwards Deming in the 1950' proposed that business processes should be analyzed and measured to identify sources of variations that cause products to deviate from customer requirements. He recommeded that business processes be placed in a continuos feedback loop so that managers can identify and change the part of the process that need improvements. As a teacher, Deming created a (rather oversimplified cycle) diagram to illustrate this continuous process, commonly known as the PDCA cycle for Plan, Do, Check, Act*: |
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Deming's focus was on industrial production processes, and the level of improvements he sought were on the level of production. In the modern post-industrial company, these kinds of improvements are still needed but the real performance drivers often occur on the level of business strategy. Strategic deployment is another process, but it has relatively longer-term variations because large companies cannot change as rapidly as small business units. Still, strategic initiatives can and should be placed in a feedback loop, complete with measurements and planning linked in a PDCA cycle. To illustrate the relationship of business unit processes to strategic processes, we may construct two nested PDCA cycles: |
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