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This is like the Grand Unification Theory of Deming for me. I've been thinking about it for years.

This is a classic question. It doesn't come up only in the software realm—in every company, there are always high performers, and there is always resistance to the idea of treating their output as systematic, or treating them in an individual focus, rewarding and seeking them out.

My thoughts are that fundamentally, the relative performance of your workers is irrelevant to Deming's prescription for quality. Your job is to improve the output of the system as a whole, and by no small coincidence, improving all your processes optimizes the company for all individual worker output the best. Continual improvement of process, as it applies to the product, management, and worker alike, will result in higher gains than a focus on individual performance. This is the difference of kind—the Profound Knowledge Deming talked about.

If you think of it like that, it's more about human systems than it is about unleashing individual performance. Traditional management is about motivating the individual; Deming management is about recognizing that most of the output results from the system, and thus, improving the systems surrounding the individual.

The really fun part is how you look at performance. Firstly, you have to use statistics (after all, this is Deming we're talking about). Recognize that the performance of a group of humans is a sample, and as in most natural distributions it will resemble a bell curve. You will always have outliers: mythical people who seem to outperform all others (most people focus all their attention on these). But most of the group will be somewhere within 2 standard deviations of the average—AKA, normal. You will always have a handful of low-performers, too. This appears to match reality in my experience at several companies, as I'm sure it does for you.

Now, keep in mind that Deming never talked about reducing variation in people. He talked about continual improvement, he talked about psychological effects of management on workers, he talked about enabling pride. His message was to understand variation in the workforce, not to abolish it. Reducing variation is the goal for the output (as it should be in software also!), but not for the employee. He never applied those numerical style goals to workers at all, and in fact decried them as inhuman, and more importantly, ineffective. See Principle #10: "Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity." In other words, recognize and understand statistical variation; don't demand a reduction in variation from individuals, improve the system to improve the output. Remember that: I'll come back to it.

To your second point, that software somehow does not have a "common cause" consistent enough to build upon. I also want to correct this a bit. Deming's first principle, "Create constancy of purpose toward improvement of product and service, with the aim to become competitive, stay in business and to provide jobs" applies to absolutely all companies imaginable. This constancy of purpose is not a constancy of performance or constancy of variability, but a shared knowledge and goal that everyone strives for. It's an abstract and unmeasurable concept. This was Deming's only foray into "common cause," though it was very important.

Back to the individual versus the system. Improve the system to improve the output. If ever there was a sentence to sum up Deming, that's it.

Yet you think you want to "unleash your 10x performers." That this is somehow the goal in Software, or in any company for that matter. It's not. And here's why.

Your 10x performers are your outliers: the top end of the bell curve. The instinctual reaction when you get your hands on one or two is that you've gotta hire more people like this, and to reward and bonus and hold them up as pinnacles of achievement. After all, they perform better than everyone, they should be rewarded. And if we reward this kind of performance, we'll motivate other people to achieve more, right?

Wrong. This instinct is incorrect, and Deming based this (quite correct) conclusion on his extensive knowledge of psychology and sociology. Firstly, while you're focusing on one or two high performers, you lose the recognition that your output and your entire company is actually systematic. You might have 50 other programmers in the body of your bell curve, the lot of whom are still collectively producing 5x what your one 10x programmer supposedly outputs, and possibly more due to complex interrelated factors. Yet, by focusing on individual performance, you unintentionally demotivate the great majority of your employees, who are almost by statistical certainty "just average." The result of your efforts at improving and rewarding the performance of your 10x'er might be simply to keep them, or perhaps motivate them into being an 11x'er (big deal). You may motivate one or two people who happen to be motivated by money to improve their performance, but it probably won't last. The main outcome will be a slew of unintentional negative consequences throughout your company, including corporate politics, ladder-climbing, blame, mistrust, fear, and demotivation. Not good. (Side note: this is Corporate America in a nutshell, the result of a century of individually focused management. We've become complacent about it, sadly).

Deming would look at this in many ways. There would be laughter and enlightenment. There has to be a paradigm shift.

First, look at the performance as a statistical anomaly. It will sometimes happen, quite by accident, that two programmers will have random variation in performance month-to-month or project-to-project. These are not unexpected occurrences. Sometimes the right state of mind aligns with the right motivation and personal circumstances to produce extraordinary performance. It has happened to all of us at times, surely. By looking at it this way, you get many realizations: that circumstances impact performance; that individual variation will occur naturally; that you might be rewarding an individual for performance which is an anomaly. This might sound like a small step, but in fact it's the root of many cultural problems and corporate politics, mistrust of management, power games, and infighting.

Second, how are you measuring performance? How do you determine 10x? Deming would scoff at the very idea. His 3rd "Deadly Disease" was "Evaluation by performance, merit rating, or annual review of performance." For similar reasons to the above, these imprecise methods cause more harm than good. They'll cause secrecy, fear, more infighting and game playing in an effort to reach the performance or review goal, instead of the true goal: quality work. Removing these false metrics reduces fear, improves culture, improves collaboration and allows people to be prideful of their work without ulterior motives. This unmeasurable metric is more important than it sounds.

Third, and most importantly, Deming would surely say: ignore the outliers. Focus on improving the system. Focus on the majority of your people, and the whole of your organization to improve quality of the final product. Implement improvements system-wide, remove rewards and quotas and individual expectations and replace them with leadership, training, continual improvement, and knowledge. Deming would tell you that most of the quality of your output is not tied to individual worker performance, but rather the systems of management, technology, and collective improvement that the company has implemented.

The point of this is to improve your entire organization: your average 50 "1x" programmers might double their performance, resulting in 50x more performance than hiring one holy grail 10x programmer, or unleashing your existing one. That is a simplistic way to think about it, however. The actual improvement is much greater. By focusing on the company as a whole, and focusing on the needs and performance of all employees, you create something far greater: a cohesive culture driven by a desire to do good work as a whole, and produce quality output toward a clear purpose. That should be the holy grail, not "unleashing your 10x performers."

Having 10x performers is surely not a bad thing; they will occur, and you should attempt to hire and keep the best employees you can, of course. But the end of this story gets even better: high performers like one thing above all else, in my experience, and that is working in an environment in which they flourish, are able to take pride in their work, and are able to work with other high performers. By enabling all your programmers to perform at their best, you simultaneously enable your best performers to perform better and flourish as well, which is exactly what they're looking for. Focusing on the whole system does unleash your best performers; and everyone else too! It's counter-intuitive, but that's the lesson here.

The result is positive on all fronts, and not only that, but exponentially better than an individual-reward system due to the intertwined self-reinforcing effects of systematic improvements. Instead of having a handful of 10x workers, you instead build a 10x company which regularly nurtures its employees into becoming them. A 10x culture of performance.

This was the true genius of Deming's perception of the workplace, and of quality. This was never a sticking point for him; it was right there in his perspective if you look for it.

(Apologies for the length; I've been meaning to start a blog, and will sum this and other concepts up and submit to HN at some point...)