The Application of Statistical Thinking and Systems Theory to Management

Article

Vansuch, Gary M.   (1994, ASQC)   U.S. Tennessee Valley Authority, Knoxville, TN 37902

Annual Quality Congress, Las Vegas NV    Vol. 48    No. 0
QICID: 10170    May 1994    pp. 755-760
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Article Abstract

The U.S. Tennessee Valley Authority (TVA) used principles of statistical thinking and systems theory to transform their organizational management processes and become more competitive.

The TVA's internal quality assessment methodology was based on the criteria for the Malcolm Baldrige National Quality Award (MBNQA). Internal quality assessment teams, who were trained in the basics of Total Quality Management (TQM), performed "primary" assessments which were rolled up into higher-level assessments. Through a series of "customer focus" workshops, TVA identified "stakeholders" and their needs. They also defined optimization, the accomplishment of the aim of the system. Optimization requires systems thinking to see interrelationships rather than cause-effect chains and to see processes of change rather than snapshots of change. Statistical thinking is also required; it includes a basic understanding of variation, and an understanding of common causes and special causes.

Leadership skills required for stable systems are different than the leadership skills required for unstable systems. Confusion concerning the state an organization is in leads to misguided decisions and disaster. Two costly errors are: (1) treating something as a special cause when it is actually a common cause, and (2) attributing something to common cause when it is actually from a special cause.

Keywords

Electronics industry,Government,Malcolm Baldrige National Quality Award (MBNQA),Utility industry,Systems analysis,Tennessee Valley Authority (TVA),Total Quality Management (TQM),Statistics


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