I would argue it only seems like a paradox if you assume that Operationally Rigorous Companies exclusively use Deming’s philosophy or that it is the only approach to Operational Excellence.
In the book The Halo Effect: How Managers let Themselves be Deceived
Andrew Grove (Legendary Intel CEO) is quoted
" The quality guru W. Edwards Deming advocated stamping out fear in corporations. I have trouble with the simple-mindedness of this dictum. The most important role of managers is to create an environment where people are passionately dedicated to winning in the marketplace. Fear plays a major role in creating and maintaining such passion. Fear of competition, fear of bankruptcy, fear of being wrong and fear of losing can all be powerful motivators."
[emphasis on fear is mine]
On business paradoxes, I’d like to quote this older thread.
“… A founder needs to simultaneously hold multiple strong conflicting beliefs & be able to switch back & forth between them.”
The paradox stems from the fact that
- You need to hold Strong beliefs
- Those beliefs come in conflict with each other which is why you need to switch back and forth between them.
In business, conflict will arise naturally. Why? Competition is extremely fierce. In the U.S. 3 out of 4 businesses that start fail. That’s compounded in the tech world, where 5 out of 6 start ups fail. (Note - I’m not sure how accurate those figures are)
Part of the competitive nature of tech is the Innovators Dilemma. The same forces that allow tech companies to innovate and then dominate a market means they have to constantly innovate least they get “disrupted”
To quote Mark Zuckerberg
“If we don’t create things that will kill Facebook, someone else will”
Part of the conflict of winner take all nature and innovation is that it’s easier to not reinvent the wheel and make your own copy of the competition or directly compete in their lane.
We can see this in multiple cases
We can see copying the competition in social media (think Instagram vs Tik -Tok vs Youtube)
AWS which has had a historic first mover advantage in Cloud Computing is facing intense competition from Microsoft and Google and with the coming AI wars risks losing the advantage in the market for the first time.
Speaking of Microsoft and Google, in a bigger eye-bulging case, Google tried to release a cloud gaming platform Stadia that failed but would have cut into one of Microsoft’s profitable markets of Xbox and Windows - gaming.
Microsoft (teaming up with OpenAI) responded by trying to compete in Google’s biggest comparative advantage - the search Engine.
The last example, I think, really illustrates a hard fact of life. Tech companies at the highest level are not just competitive, they are cut-throat competitive.
To quote Andrew Grove
A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.
Only the paranoid survive in fiercely competitive markets. Which brings me to one of the least discussed parts of both business and tech - emotion. Both tech and business have a tendency to talk about logic when speaking about knowledge, but in the brain the parts that are responsible for logic have their foundation in the emotional side of the brain. (Don’t have a source off the top of my head) Emotions can get placed into a false dichotomy of positive or negative. Some of this is justified - nobody likes to feel fear. However, fear in of itself is not negative, our reaction to fear is what can be positive or negative. We can fear criticism from our superior, which demotivates our working capacity. Fear of failure can paralyze us from taking meaningful action because we might incorrectly assume that our efforts will not be rewarded even if we work hard. Even more insidiously, we can fear success because even if we believe we can fix a problem with sustained effort, that we would disqualify our efforts because it might be due to luck and that we will fail at the next challenge.
On the flip side, in tech there are real winners or losers. Companies that take years to build and rake in billions on razor-thin margins can be upended by a competitor with a new innovative advantage that can be scaled. With this reality in mind, positive fear response can help sustain the temporary discomfort you feel to get in a “deep work” session to improve your skills or pry for the small details to save the company money or innovate a performance optimization.
Business knowledge is “tacit” it’s more than what you read, it’s the whole cycle of what you do and the feedback you receive. You might get yelled at for breaking a downstream system in software, but you will literally “feel” not to do that next time. Ideally, we don’t like to yell and make people uncomfortable, and we do avoid that most of the time. However, when you are under time-constraints to deliver an important feature or have a large ticket for a pipeline breaking change, empiricism shows that management can be messy when you get in the trenches.
It was written in one post that Amazon see’s “communication as defective.” That’s probably not untrue, but more positively I think the idea that we should abstract is that “actions speak louder than words (communication)” When Bezos made the mandate to open all the team’s interface to make a platform least they be fired, it did eventually spur actions to AWS though it was not pretty for developers.
It’s worth noting Andrew Grove himself was the founder of the “OKR” review and popularized “strategic inflection points.” Deming was influential in scientific management and making data driven decisions, but he was not the only one to do so. It’s also worth noting the Grove did not encourage toxic work environments, just that he realized the value of constructive confrontation and the role fear played in that.
That’s not to justify toxic corporate environments, it’s just worth noting that corporate decision-making that when working towards a profit, a company that succeeds in satisfying customers in a winner take all market (extremely difficult to do) will likely be a relatively stressful and demanding place for employees to work usually stemming from the harshness of continuous improvement but not creating a constructive environment while doing so.