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Explore the credit cycle more closely

Sunday, March 21st, 2010

23Rather than simply hoping the partnership delivers what it’s capable of achieving, I use a structured process that helps me manage the outcomes. This process is called the Plan–Do–Check–Act cycle, also known as the Shewhart cycle or the Deming cycle.

Walter A. Shewhart, a statistician at Bell Telephone Laboratories in New York, developed a technique to reduce process variation in tasks that workers performed. He developed this planning cycle to improve the output of his processes and bring them under what he called “statistical” control. Later Dr. W. Edwards Deming referred to the Shewhart cycle as the Plan–Do–Check–Act cycle. Deming introduced it to the Japanese to help rebuild their economy after World War II. This cycle has been a cornerstone of the Japanese economic miracle ever since the 1960s and is still used today. In fact, the Japanese call it the Deming Cycle of Quality. The Plan–Do–Check–Act (PDCA) cycle is as useful in developing relationships as it is in managing statistical control or performing a task. I use this simple tool repeatedly throughout the partnering process. Let’s explore the cycle more closely.