Dr W Edwards Deming is known as being one of the quality gurus and is highly regarded in Japan as Deming made a significant contribution to Japan’s reputation for innovative, high-quality products, and for its economic power that has helped Japan become the second largest economy in the world. As some of you know I am a quality professional as well as a property investor and therefore I have studied Deming’s work over a number of years and particularly his 14 points which still apply to today as it did in 1982 when it was first published.
I was revisiting the 14 points to see how I could apply them to property investing and this is what I came up with:
- “Create constancy of purpose toward improvement of products and services, allocating resources, with the aim to become competitive, to stay in business, and to provide jobs.” This point calls for looking ahead and making changes to your business so that you have better approaches to changing markets and environments. The one that comes to mind is the changes in the tax laws that we will all have to face, so think of the ways that you can mitigate it. But bear in mind who your customers are as the customer’s needs remain the top priority in your business, because without them you have no business.
- “Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, learn their responsibilities, and take on leadership for change.” This point is all about innovation and change management. So look at your processes and systems and make them robust. If you don’t have any yet then now is the time to start applying these to your business otherwise you will be working in your business instead of on your business.
- “Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.” This point is about monitoring your processes at every stage and not trying to detect defects at the end. Not only will you prevent defects from happening but you may also be presented with an opportunity to innovate the process. So for instance instead of doing snagging at the end of a refurbishment do your snagging during the refurbishment
- “End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.” What this point is telling us is to stop cutting corners by buying cheap materials when in fact you need good quality materials as this will work out cheaper in the long run. You also need to work with single suppliers and build up relationships so that you can work together in this way you will get your materials at a decent price and delivered on time as your supplier will know exactly what you need. Also by building the relationship you will know what your competitors are doing as the supplier will have their ear to the ground and let you know.
- “Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.” This is about building a culture of making improvements within your business. By ensuring everyone is looking at all of your systems and processes on a constant basis and finding ways to make improvements you will increase the quality, your productivity will go up and your costs will come down.
- “Institute training on the job.” People are part of the process so you need to train them properly, therefore you must have continual support for learning about process monitoring and improvement. This can also be applied to people outside of your business e.g. estate agents can be trained to understand what your requirements are and not to give you information on unsuitable property that does not meet your needs.
- “Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.” Leaders should help people think about their job and find ways to make improvements, this will also help people understand their processes. This will help your business grow and become part of the culture.
- “Drive out fear, so that everyone may work effectively for the company.” Research has shown that if people are afraid to speak freely it will have negative impact on innovation and reasoning. Therefore you need to ensure that the people in your business can speak candidly.
- “Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.” You need to have a cross fertilisation of ideas, so that teams can work together, e.g. planner, architect and builder working together to come up with a design that suits your needs.
- “Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity.” You need to remove targets and quotas for people to hit, instead you need encourage your team to work collaboratively as this will move your business forward.
- “Remove barriers that rob the hourly worker of his right to pride of workmanship.” This is point is about putting quality before quantity and encouraging people to make improvements in their work.
- “Remove barriers that rob people in management and in engineering of their right to pride of workmanship.” This is about allowing managers to manage without undermining their responsibility. Managers also need to encourage continuous improvements. It is all to easy to think that no one can do a job in your business better than you, but you must learn to let go, remember you need to work on your business not in your business.
- “Institute a vigorous program of education and self-improvement.” Training should engage people in on-going learning opportunities and not just limited to specific tasks. Teach your people about your business, about investing etc. be their coach and mentor.
- “Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.” This is all about teamwork and collaboration so that everyone is on board to grow the business including suppliers.
As you can see Deming’s 14 points can be adopted and applied to any business, therefore it can work in your property business. I have just skimmed over them as you need to see how you can apply them to your own business. If you would like to know more about the 14 points and how to apply quality to your business I suggest that you read Deming’s book ‘Out of Crisis’.
Also this book is a great start to learn more about his principles.