System & People

Which One Determines the Success of Organizational Transformation?

In organizational transformation, a classic debate often arises:
is success determined by the system or by the people?

Some believe that organizational performance depends primarily on individual quality. When expected results are not achieved, employees are often the first to be blamed. However, this perspective was challenged by W. Edwards Deming — a pioneer of modern quality management — who introduced a different and highly transformative viewpoint.

According to Deming, approximately 94% of performance variation and organizational failure originate from the system, including work processes, organizational structures, policies, and the working environment. Meanwhile, only 6% are truly caused by individual errors. This perspective shifts the traditional management paradigm: the main problem within an organization is not the people, but the system in which they work.

Deming’s Core Principle

Deming emphasized that motivating people without improving the system is like “trying to catch the wind” — an exhausting effort that produces little real change. Even highly competent individuals will find it difficult to perform at their best when working within a poor system. Conversely, individuals with average capability can achieve strong performance when supported by a well-functioning system.

Therefore, organizational transformation should begin with an understanding of the System of Profound Knowledge, an approach that emphasizes two elements simultaneously:

• the development of healthy and effective work systems, and
• the development of individuals within the organization.

Why Systems Are More Dominant

1. Structure Shapes Behavior

Employee behavior is strongly influenced by organizational rules, procedures, targets, and operational mechanisms established by the organization. People work according to the systems available to them — not merely based on personal intention.

2. Reducing the Blame Culture

Focusing on system improvement helps organizations move away from a blame culture. When mistakes are viewed as opportunities to improve processes, individuals feel safer to learn, innovate, and share ideas.

3. Creating Sustainable Quality

Training or improving individual competence will not create long-term impact if work tools, processes, or organizational policies remain problematic. A well-designed system enables quality to be maintained consistently over time.

An effective organization does not mean ignoring people. On the contrary, organizations empower individuals by improving the ecosystem in which they work. The primary role of leaders is not merely to supervise employees, but to ensure that organizational systems enable every individual to perform at their fullest potential.

Reflection Questions

• Do I tend to blame individuals more often than I try to improve the system?
• If yes, what is one action you will take immediately to focus more on improving the system?
• If not, what is one aspect of your system that still needs improvement so people can contribute more effectively to the organization’s growth?