Deming vs Drucker.
Here is my personal MRKT/MBO rant:
This here is Chat: (nice me)
Pros and Cons of Management by Objectives (MBO)
Pros
- Creates clarity
- People know what is expected of them.
- Improves alignment
- Individual goals can support company goals.
- Encourages accountability
- Results become visible and measurable.
- Provides focus
- Reduces ambiguity about priorities.
- Can motivate achievement-oriented employees
- Some people respond well to clearly defined targets.
Cons (especially from a Deming perspective)
- Sub-optimization
- Departments optimize their own goals while hurting the overall system.
- Short-term thinking
- People chase quarterly numbers at the expense of long-term health.
- Gaming the metrics
- Employees learn to hit the target rather than improve the process.
- Fear and distortion
- Bad news gets hidden when objectives become tied to evaluation.
- Assumes people control outcomes
- Deming argued most performance is determined by the system, not individual effort.
- Reduces learning
- Questions become “Did we hit the target?” rather than “What did we learn?”
- Ignores variation
- Natural variation gets mistaken for individual success or failure.
Deming vs. Drucker
Interestingly, Deming and Peter Drucker agreed on many things, but they approached organizations from different directions.
Drucker Strengths
Drucker emphasized:
- Purpose
- Customers
- Innovation
- Decentralization
- Knowledge workers
- Strategic thinking
His famous quote:
“The purpose of business is to create and keep a customer.”
was revolutionary because it shifted attention away from accounting and toward customers.
Why Drucker Was Right
Without customers:
- There is no revenue.
- There is no business.
- Innovation becomes irrelevant.
- Operations become irrelevant.
In that sense, marketing and innovation are indeed the engines of growth.
Where Deming Goes Further
Deming would likely ask:
What system consistently creates customers, keeps customers, and enables innovation?
His answer:
Management.
Or more precisely:
The design and continual improvement of the system.
Deming might argue that marketing and innovation are outputs of a healthy system rather than standalone functions.
Deming’s Advantages
1. Focuses on causes, not symptoms
Drucker:
- Grow customers.
Deming:
- Understand the system that creates customer value.
2. Recognizes interdependence
Marketing cannot succeed if:
- Quality is poor.
- Delivery is inconsistent.
- Employees are disengaged.
- Processes are unstable.
3. Emphasizes learning
Innovation is not an isolated department.
Innovation emerges from:
- Experimentation
- Feedback
- Knowledge
- Psychological safety
4. Creates sustainable results
Deming’s aim was not simply growth.
His aim was:
A system where everybody gains.
Customers gain.
Employees gain.
Suppliers gain.
Owners gain.
Society gains.
Counterpoint: Why Deming Doesn’t Replace Drucker
One weakness of some Deming Disciples is that they become so focused on internal optimization that they forget the market. A perfectly efficient company can still fail if nobody wants what it sells.
Drucker reminds us:
- Value is determined by customers.
- Markets matter.
- Innovation matters.
Deming reminds us:
- Systems matter.
- Learning matters.
- Capability matters.
I & I say:
Marketing and innovation determine whether a business deserves to exist;
Management determines whether it can continue to exist.
Better systems produce better performance.
Stay curious my friend,