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Terry Lundgren Receives Deming Cup

Executive was honored for making “the bold calls and navigating Macy's through profound changes.”

All five winners of the Deming Cup: Terry Lundgren, Ratan Tata, former IBM ceo Sam Palmisano; Chrysler ceo Sergio Marchionne, and Brent James of Institute for Health Care Delivery Research.

Twice a year, the Macy’s Inc. board takes store tours, but along the route, chairman, president and chief executive officer Terry J. Lundgren tends to slip away.

“You can’t find him. He’s always standing on the side talking with a group of sales associates,” said Meyer Feldberg, dean emeritus of Columbia Business School and a member of the Macy’s board. “People like to be with Terry. He connects.”

Under the grand rotunda of Columbia’s Low Memorial Library, Lundgren was presented with the 2012 Deming Cup, named after the late W. Edwards Deming, a professor, statistician, author, consultant and business innovator best known for his work in Japan in the Fifties teaching top managers about product testing and quality and elevating design. Lundgren was honored for making “the bold calls and navigating Macy’s through profound changes,” including doubling the size of the company through the acquisition of May Department Stores Co. in 2005, nationalizing the Macy’s nameplate, and localizing assortments by creating the My Macy’s field organization.

Ratan N. Tata, chairman of Tata Sons Ltd., was also honored with the 2012 Deming Cup for turning his company around and transforming what was a family-owned Indian conglomerate into an international organization.

“The key to all this is crystal clear — constant communication all the way down to the selling floor,” Lundgren said. “We can get in the way if we are not listening closely to what associates need from us.”

Communication skills were most necessary when Lundgren decided to rename as Macy’s all the stores purchased, even the venerable Marshall Field’s and Filene’s. “Changing the name of 400 stores was not necessarily popular in any city. But we did it with a great deal of caring and listening,” he said.

Lundgren also said that My Macy’s has been “the biggest win” for the company, and that the My Macy’s field organization does what no technology can do — it figures out what’s lacking in the stores that customers want. “Our story is a human-driven strategy.…Dr. Deming lives and breathes in our company,” Lundgren said.

The Deming Cup award dinner, which drew 250 guests including Henry Kissinger, who introduced Tata, supports the activities of W. Edwards Deming Center for Quality, Productivity and Competitiveness, including study tours to emerging countries for faculty members teaching operations and strategy; applied research fellowships for doctoral students, and the development of study cases on the Deming Cup recipients to propagate Deming Principles, and a health care conference next spring focusing on process improvement.