By Columbia GSB November 7, 2011 Leave a Comment

Sergio Marchionne, CEO of Fiat and Chrysler Group, and Brent James, MD, chief quality officer of Intermountain Healthcare, were honored on Wednesday, November 2, as recipients of Columbia Business School’s second annual Deming Cup awards.

The Deming Cup honors business leaders who have improved the cultures in their organizations. W. Edwards Deming, who joined the School’s faculty in 1988, was renowned for his work, particularly in Japan, on improving product design, service, quality, and sales, specifically through statistical methods.

James started conducting research with Deming in 1987, and said that he’s applied lessons learned from his mentor to advancing care at Intermountain Healthcare, a system of hospitals, doctors, and clinics in Utah and Idaho. Intermountain has improved patient outcomes and offered higher quality care while lowering costs by streamlining protocols for treating patients. President Barack Obama even pointed to the system as a model of success in support of his 2010 healthcare reform bill.

“It only feels appropriate to accept this award in honor of Dr. Deming, who did his work with the idea that service is the ultimate human accomplishment,” James said. “We’re in the beginning of creating a whole new world of medicine. We haven’t even begun to realize what we can do for our patients — the people who come to us in their hour of need.”

Fellow award recipient Marchionne turned around Italian automaker Fiat and has overseen Chrysler for the last two years as the American car company returned from the brink of collapse — first repaying its government loans and then turning a profit once again. As the two companies merge operations (Fiat currently owns 54 percent of Chrysler), Marchionne acknowledged his employees’ role in shaping the characters of the organizations. “Fiat and Chrysler are made up of people who are survivors,” Marchionne said. “The hardest moments in life are also the most meaningful.”

Marchionne also named organizational culture as the most crucial factor to success, especially in a difficult climate. “Culture change is more important and long-lasting than changes in manufacturing or production,” he said. “We’ve learned to be comfortable with the discomfort of uncertainty. The ability to embrace change and confidently plan for the future lies in positive leadership.”

2010 Deming Cup recipient Sam Palmisano, who recently announced that he will step down as IBM chairman and CEO, presented James and Marchionne with the awards. He also introduced his replacement, longtime IBM executive Ginni Rometty. Prior to the Deming Cup event, Palmisano spoke with 100 operations students at the School.

He praised Marchionne for placing his office not on the executive floor, but in the middle of his engineers’ workspace, and for creating a corporate culture where “everyone is expected to lead.”

“The CEO is not the company or the brand,” Palmisano said. “[Marchionne] lives in the spirit of Dr. Deming.”

Deming Cup recipients are selected by a panel of judges that includes Columbia Business School faculty members, business leaders, and alumni. The award is administered by the W. Edwards Deming Center for Quality, Productivity, and Competitiveness, which promotes excellence in operations management through research and works with senior executives to create best practices and strategic plans.

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