Deming's Five Diseases of Management
Achieving Long-Term Success
Do managers in your organization always seem to be leaving? Does your company frequently launch new initiatives before existing ones have settled in? Or, does it seem to focus too much on short-term profits, rather than on long-term success?
If you don't address issues such as these, they can seriously damage your business.
In this article, we'll look at Deming's Five Diseases of Management – five common problems that can prevent organizations from succeeding in the long term. We'll also look at strategies that you can use to cure each disease.
About the Tool
Mary Walton described Dr W. Edwards Deming's Five Diseases of Management in her 1986 book, "The Deming Management Method." Deming was a well-respected management thinker who created other influential tools, such as his 14-Point Philosophy and Plan-Do-Check-Act.
The Five Diseases of Management are five principles, attitudes, and behaviors that can prevent an organization from being successful in the long term. Although Deming originally developed this framework for managers in manufacturing, the model is useful for anyone in a management role.
Applying the Tool
Let's look at Deming's Five Diseases in detail, and examine what you can do to avoid or overcome each one.
Deming originally highlighted seven diseases. The two that we haven't included here are "Excessive Medical Costs" and "Excessive Costs of Warranty."
1. No Consistent Purpose
This disease appears where an organization frequently changes its strategy, management approach, or objectives, or where it doesn't define these clearly.
This means that previous strategies and initiatives don't have time to take effect before new ones are tried, meaning that a lot of energy is expended, but very little is achieved.
This can also negatively affect employees, as they find it hard to commit to their work long term. As priorities change, they can become frustrated and disillusioned, which results in low morale, low productivity, and high job turnover.
If you suspect that your organization shows a lack of consistent purpose, start with your Mission and Vision Statements (but don't change these unless they're seriously wrong). What values and driving purpose has your organization committed to? Make sure that everyone abides by these principles, and that everybody is signed up to them, rather than working to a different agenda.
Next, ensure that your team members understand how the organization's strategy addresses the mission and vision statements. Use the Pyramid of Purpose and Management by Objectives to highlight how each person's goals and values contribute to the organization's objectives, and review projects and priorities to make sure that these contribute to the mission.
Also, bear in mind that, while continuous improvement and innovation are important, your team members may not commit to one driving purpose if you regularly try new management approaches, implement new quality improvement initiatives, or change organizational goals.
Finally, remember that it's easy for managers to get bored by the often-mundane work of strategy implementation, and that they may prefer the intellectual stimulation of strategy development, even if this leads - without them noticing - to chaos and confusion. Therefore, you must emphasize the importance of self-discipline and stamina in successful management, and you must make sure that managers stay focused on meeting their objectives.
2. Focus on Short-Term Profits
Sometimes, organizations focus on short-term profits rather than on long-term success. This often occurs when shareholders demand bigger dividends, or when an executive board focuses primarily on short-term growth.
This disease can lead to several issues. For example, companies might ship products on the last day of the month without regard for quality, so that they can meet monthly billing targets. And, they might invest in projects and initiatives that grow short-term sales, at the expense of those that focus on long-term growth or stability.
Organizations that focus almost exclusively on the short-term may also cultivate a sense of fear in their people, and they are likely to fail to innovate.
While it's important to pay attention to short-term goals, you also need to devote your attention to the company's long-term health and growth.
When you make decisions, also question your intentions. Think carefully about why you want to do something – will it reap short-term profits, but possibly damage future prospects?
3. "Managing by Fear"
Performance appraisals can be powerful tools for positive change and improvement, when managers carry them out with honesty, fairness, and sensitivity.
However, Deming said that organizations can use performance reviews to "manage by fear," and this causes people to focus on short-term performance at the expense of long-term success.
Examine your organization's current review process. Do managers conduct performance reviews with a spirit of support, coaching, and empowerment, or do people dread these events? Having a performance appraisal should be a positive experience; if they generally are not, then you need to make changes.
Next, implement coaching or mentoring programs that focus on regular, continuous improvement. These relationships can be great for sharing knowledge, building trust, and developing people's skills and abilities.
Then, think about how you score performance. If everyone on your team works exceptionally hard, do you give them all 10 out of 10 for effort, or do you feel obliged to fit your scores to a normal distribution? (The latter suggests that your organization values statistical purity more than it values people.)
Last, managers should conduct performance reviews with honesty, empathy, and respect. Make sure that they spend time discussing what your team members are doing well, as well as how they can improve.
4. High Senior Management Turnover
Organizations with high staff turnover in senior management positions will never reach their full potential, for several reasons.
First, it takes time for managers to gain a deep understanding of their role. It also takes time for them to develop strong relationships, build trust, and develop expertise. They can't do this if they're "here today, gone tomorrow."
What's more, if you have high staff turnover in the management team, there will always be key people who contribute little, because they're still getting "up to speed." This means that your team is never fully effective.
High staff turnover in senior management positions may point to a deeper problem of job dissatisfaction. For example, maybe the corporate culture is toxic, or perhaps prohibitive rules or policies make it difficult for people to do their work effectively.
High management turnover also has an effect on the staff turnover in the rest of the organization – if the management team changes regularly, talented employees may adopt a short-term mindset, and may decide to look for work in a more stable organization.
If your organization has a problem with turnover in its senior management team, your first goal should be to find out why people are leaving. Talk with team members to find out what is and isn't working, and conduct exit interviews with staff who depart.
Use tools such as Herzberg's Motivator/Hygiene Theory as a starting point for exploring potential causes of job dissatisfaction. Once you remove these, add or strengthen the causes for job satisfaction.
Also, use Management by Objectives to tie people's career goals in with organizational objectives. Make sure that you focus on people's long-term objectives, as well as their short-term ones.
You can also lower turnover by strengthening factors that contribute to job embeddedness. This includes building good work relationships and making sure that people's roles match their strengths and interests – this is especially important for ambitious managers. And, if you suspect that compensation is a factor, ensure that you create the right pay structure.
5. Focus on "Visible" Figures Only
Some organizations manage themselves using financial metrics almost exclusively. In other words, they pay far more attention to monthly sales figures and outgoings such as taxes, payroll, and expenses, than to subjective factors such as happy customers, a high product quality, or a positive work environment.
Of course, figures are important – no company will succeed without a positive cash flow and controlled expenses. However, an excessive focus on financial numbers can lead managers to "see the cost of everything, and the value of nothing."
Balance sheets, P&L statements, and cash flow forecasts are essential tools for any organization. However, you need to widen your perspective to look at other important metrics.
To do this, identify your Critical Success Factors (including team- and people-oriented ones) – these are the areas where you must do well to achieve your objectives and execute your strategy. Focus on these, as well as on financial data. Our article on the Balanced Scorecard highlights one way to do this.
Mary Walton wrote about Dr W. Edwards Deming's Five Diseases of Management in her 1986 book, "The Deming Management Method."
Deming's five diseases are:
- No consistent purpose.
- Focus on short-term profits.
- "Managing by fear."
- High senior management turnover.
- Focus on "visible" figures only.
By dealing with them, you can do a lot to make your organization more successful.