Why Dr. Deming Opposed Management by Objectives and Quotas: Podcast
11a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
11b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.— Dr. W. Edwards Deming’s 11th point for management transformation
Management by Objectives: It’s a rite of spring for performance management in many organizations. Tie individual goals to corporate targets and perhaps even link bonuses and evaluations to achieving said goals. Does this sound familiar?
Dr. W. Edwards Deming was not a fan of MBO. Eliminate it, he urged in his 11th point for management transformation. Get rid of management by numbers and throw away quotas, he encouraged.
Instead, substitute leadership.
In the episode of Behind the Curtain: Adventures in Continuous Improvement, podcast hosts John Dyer and Dr. Mohamed Saleh delve into Deming’s take on MBO and numerical goals as they continue their exploration of the management guru’s 14 points of management transformation.
Deming’s call to eliminate MBO, described as the most controversial of Deming’s 14 points, was not a dismissal of data or measurement, Dyer said. “He totally believed in data,” Dyer says. (Remember, Deming was a statistician.)
If anything, Deming was “anti-misuse of measurement,” Saleh says.
The podcast hosts discuss how fear is the foundation of Deming’s 11th point for management, relating it back to his eighth point: Drive out fear. What are the repercussions of missing the goal? Will I be fired? Do I miss out on a bonus? And what if the system is broken and meeting goals and targets isn’t even an option?
The result of such fears is that workers start gaming the numbers to meet their goals, and they start short-term thinking, Saleh says. Moreover, quotas and goals lead to optimizing locally rather than for the whole organization.
Underlying Deming’s desire to eliminate MBO and quotas is his “focus on designing better systems, not weaponizing a number against a person,” Saleh says.
During their conversation, the hosts also discuss:
- How the annual nature of most goal setting and objective setting does not support a rapidly changing business environment
- How goals that are either too soft or too hard harm performance
- Why eliminating goals is not the equivalent of eliminating accountability. While Deming did not support individual goals, Saleh says he supported system-level aims and milestones. “What he did support was capability measurements, process controls, leaders and accountability for improving certain systems,” Saleh says. “He wasn't against directional purpose. If anything, that was like his motto.”
- How Deming’s philosophy embraces lean thinking.
- What Deming meant by “substitute leadership.”