Deming’s Five Diseases of Management

Good management is at the heart of successful business. It is the management team that is going to make the decisions which will either allow the company to thrive, or cause it to struggle, in the weeks, months, and years ahead.

Deming’s Five Diseases of Management

While there is more that goes into a company’s success than just good management, it is key to have this ingredient in place at the top of the organization. Good choices will lead to positive outcomes more often than not, meaning the company can continue to grow and develop moving forward.

Of course, it isn’t exactly easy to achieve successfully management within an organization. Even experienced and talented managers can make poor decisions or run into problems based on a number of factors. In Deming’s Five Diseases of Management, some of the most-common problems are identified and assessed.

Deming’s Five Diseases of Management

Each of the five ‘diseases’ is listed below, along with a quick explanation of how they are a threat to any organization.

Lack of Constancy of Purpose

One of the common mistakes made by management is not clearly understanding exactly what it is they are in business for in the first place. Without a clear purpose and goal for the future, short term thinking tends to get in the way of long term planning.

Lack of Constancy of Purpose

Many organizations never make it to the long term because they have lacked the vision to plan for what that future would hold. Every organization needs to have a very clear understanding of what it is trying to do and how it is trying to do it in order to succeed over time. When management is guided by the vision that is in place, they can make wise decisions which will benefit both the short and long term sufficiently.

Emphasis on Short Term Profits

This point fits nicely in with the previous point. When choices are made only based on how to maximize short term profits – perhaps with the goal of satisfying shareholders – the long term health of the company is compromised. Doing things like improving the quality of products, or offering better service, don’t always show up in the quarterly reports on profit and loss. Therefore, those investments that would be likely to help the company in the long run are frequently neglected, and the books are made to look as good as they can look for right now.

Emphasis on Short Term Profits

The temporary profits might be nice, but they are no way to build a powerful and long-lasting organization. In the end, the emphasis on short term profits is sure to become a drag on the business, and the profits that were once realized will likely be lost.

Annual Rating of Performance

Annual ratings of the staff that works underneath the upper management tend to have a devastating effect on an organization. For one thing, the employees within the company come to fear these reviews, and that fear can negatively impact their work throughout the year. Instead of making decisions and taking actions that are best for the company, employees are forced to look out for their own self-interests by going things that will review well when the time comes.

Annual Rating of Performance

Perhaps the biggest negative affect of the annual rating system is the loss of teamwork that is experienced. People are rarely encouraged to work together under this kind of system, for fear that someone else is going to get credit for the work that they have done. Motivation through fear of the annual review is a lousy way to get people to work hard, and they will rarely work for the common good as a result. Again, this is another management mistake that values short term thinking over the long term benefit of the organization. Short term actions might look good on a review, but they likely aren’t going to take the company to new heights moving forward.

Mobility of Management

Consistency among the management team is something that is highly desirable, but sadly, is frequently hard to find. For companies that have trouble with management, it is very likely that the management team has not been working within the company for long.

Mobility of Management

Making smart decisions requires a deep understanding of the business that cannot be gained through textbooks or case studies. The organizations who receive the best results from their management team tend to be those who keep managers around for as long as possible, and those who don’t reward those managers only for short term progress. Again, this is another place where annual reviews and other similar systems can create trouble. A poor review may cause an otherwise talented and experienced manager to look for another job – meaning the company will lose all of their knowledge when they walk out the door.

Use of Visible Figures Only

The last ‘disease’ on the list relates to basing the decisions within the company only on measurable statistics. If it can’t be seen on a balance sheet, or in a stock price, it is often ignored – and this is a mistake.

Use of Visible Figures Only

Yet again, it is a mistake that is based on the short term rather than the long term. Choosing to operation in a way that only serves the needs of the profit and loss statement might make ownership or shareholders happy for now, but that happiness will fade down the line. Some things that aren’t measurable, such as positive customer service, can create long term benefits that might not be seen in the here and now.

Avoiding the five diseases listed above is not going to be easy, but it is important for the health and success of the organization in the long term. An experienced management team will understand the need to keep an eye on the long term future rather than simply the short term results that show up on things like quarterly reports.

Beating the 5 Diseases of Management

With a combination of a steady management team and an eye for the future of the business, it is possible to steer clear of these pitfalls on the way to a prosperous outcome.

Key Points

  • In Deming’s Five Diseases of Management, some of the most-common problems are identified and assessed.
  • Lack of Constancy of Purpose – One of the common mistakes made by management is not clearly understanding exactly what it is they are in business for in the first place.
  • Emphasis on Short Term Profits – When choices are made only based on how to maximize short term profits the long term health of the company is compromised.
  • Annual Rating of Performance – Instead of making decisions and taking actions that are best for the company, employees are forced to look out for their own self-interests by going things that will review well when the time comes.
  • Mobility of Management – The organizations who receive the best results from their management team tend to be those who keep managers around for as long as possible, and those who don’t reward those managers only for short term progress.
  • Use of Visible Figures Only – Some things that aren’t measurable, such as positive customer service, can create long term benefits that might not be seen in the here and now.
  • An experienced management team will understand the need to keep an eye on the long term future rather than simply the short term results that show up on things like quarterly reports.

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