Deming's seven deadly diseases of management are just as pertinent today as they were when he cautioned North American organizations that they needed to alter the course of business management. Here is the list that Deming felt was contributing to the failure rate of businesses:
- Lack of constancy of purpose
Deming described this as short term thinking. Organizations need to understand why they're in business. Is it to create and sustain a market for the future for their products or services or just to have jobs? With little or no planning for the future and a lack of long term definition and goals the loss of market and jobs is inevitable.
- Emphasis on short term profits
It's devastating to long term planning. For the plan to stay in business through the improvement of quality of product and service the two cannot co-exist. When management is rated on their quarterly contribution to profit the natural reaction is to sacrifice the long term growth of the company.
There's a better way to protect investment and that is with plans that will keep the company in business and which will provide jobs and more jobs. Unemployment, in Deming's eyes is simply a sign of bad management.
- Evaluation of performance, merit or annual review
Pay for performance or merit can't be done on the short range. If the term of reference is 10 to 20 years then you can more accurately determine the individual contribution. The effects of the annual appraisal system are devastating to an organization. The merit system encourages short term performance and all but eliminates teamwork. If getting the maximum individual merit increase is the focus, the impact on collaboration and teamwork is destructive (you don't get ahead by being equal) and further feeds short term thinking. It annihilates long term planning.
People work in fear that they won't contribute enough to the company. It's an arbitrary system that can be demoralizing to the employees...at all levels. This one element does more to damage employee engagement than anything else. Monthly 1:1 meetings with all employees, that are focused the contributions the employee has made to implementing the organizational strategy as part of a team should be the standard. Tell them what they did well over the course of the past month and how that has helped the company to continue to improve and grow.
- Mobility of management
The annual rating of performance encourages the mobility of management. If somebody doesn't get the increase they expected they start to look elsewhere. We know from the behavioral data we have at hand from the McQuaig behavioral assessment that most managers are hard-wired to be willing to accept the risk of trying something new if what they're currently doing isn't working out for them they way they expect.
The turnover in leadership ensures that the organizational thinking remains in the short term. Leaders need the market experience to help them make decisions that contribute to the success of the strategic plan. The mobility of management only serves to exacerbate the issues of performance and employee engagement. HR's talent acquisition and development efforts should be focused on helping leaders at all levels retain and capitalize on the great talent they've got to work with.
This leads to the lack of roots in the company, a lack of knowledge of the company and no understanding of the problems the company is faced with.
- Management by use of only visible figures
Deming asked the question about the multiplying effect of a happy customer. How much business does a happy customer create for an organization. The answer isn't quantifiable yet it's still incredibly important. What about the multiplying effect of an unhappy customer?
These concepts are critical for both transformation for sustainability.
- Placing blame on the workforce
If as Deming believed, the system created by management is the cause of 85% of the unintended consequences, why do we consistently place blame on the workforce. Jim Robbins (former President & CEO of Cox Communications) summed it up best.
“We spend four months of the year on the budget process, but we hardly spend any time talking about our talent, our strengths and how to leverage them, our talent needs and how to build them. Everyone is held accountable for their budget, but no one is held accountable for the strength of their talent pool. Isn’t it the talent we have in each unit that drives our results? Aren’t we missing something?"
- Relying on quality inspection rather than improving product (or service) quality
Talk about putting the cart before the horse! HR has the responsibility from an organizational development perspective to make sure we get this right. Do this and you win your seat at the board room table.