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Running a company on visible figures alone

One cannot be successful on visible figures alone. Now of course visible figures are important. There is payroll to meet, vendors to pay, taxes to pay; amortization, pension funds and contingency funds to meet. But he that would run his company on visible figures only will in time have neither company nor figures.

Actually, the most important figures that one needs for management are unknown or unknowable but management must take account of them.

i.e: results from better training, results from teamwork between engineers, production, sales and the customer and pride of workmanship.

Another note on management by figures, as the outlook for a company grows bleaker and bleaker, management falls heavier and heavier on the comptroller for management by figures. In the absence of knowledge about the problems of production, the comptroller can only watch the bottom line, squeeze down on costs of materials purchased, including the cost of tools, machinery, maintenance, supplies. Neglect of the more important invisible figures unknown and unknowable, on total costs of these moves, causes further shrinkage of profit from whatever business remains.

Tip excerpted from Chapter 3 Diseases and Obstacles, Out of Crisis by W. Edwards Deming (MIT Press)

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