Psychology – Managing Human Systems

The System Of Profound Knowledge® (SoPK) is the culmination of W. Edwards Deming’s work on management. The four areas of the system are: appreciation for a system, knowledge of variation, theory of knowledge and psychology. This post explores the psychology in the context of Dr. Deming’s management philosophy.

Many only recall Dr. Deming’s thoughts on using data to improve and think that his ideas were limited to this area. Dr. Deming however, understood that when managing organizations of people, that those people are fundamental to any attempt to improve. People are the source of value. People are what allow the organization to continually improve. The people in the organization are what will make it successful.

Acknowledging the human nature of the people in organizations is fundamental to Deming’s System of Profound Knowledge. I am not sure why this is so often ignored. Toyota understood: making respect for people one of the two pillars of the Toyota Production System (also known as lean manufacturing).

Human Systems

People are not cogs in a machine. Everyone brings extraordinary talents and abilities to the organization. Dr. Deming sought to maximize the value people bring to the organization. This requires giving them pride in their work, freedom to use their brain, tools to be effective and systems that allow people to practice continual improvement.

Creating an environment where people flourish is key to Deming’s thinking. Deming understood what John McGregor put forth in the Human Side of Enterprise (1960) that people have an innate desire to take pride in what they do. Management’s job was to allow people to fulfill this need, not to attempt to manipulate behavior through external motivation.

Deming believed everyone had a right to joy in work. That does not mean they are free from doing difficult tasks. It means that the organization has a duty to create a system where people can take pride in what they do. By doing so the organization is able to focus on continual customer focused improvement over the long term. Deming’s view is that employees are key to the long term success of the organization. They are not costs to be minimized. They are valuable partners in the continuing success of the organization.

Drive Out Fear

Many organizations are still based on carrot and stick (theory x) management beliefs. They believe you motivate people by making them fear failure and reach for monetary rewards to meet targets. Deming understood, first, that the carrot and stick model is not one that is effective for people.

Fear causes people to seek sort term safety. They will ignore long term risks. They will not look for creative solutions. They will not be open to focusing on providing great customer service. They will not be interested in working together to make improvement in the system. They will not openly share problems so they can be fixed. Fear drives people to do whatever is needed to protect themselves now, everything else is secondary.

The Deming management system is based on creating an environment where people are free to question, experiment, learn, fail, cooperate, innovate. Fear kills the ability of people to do so.


The job of a manager is not to motivate people it is to remove the barriers to joy in work. By creating an environment where people can take pride in what they do the ability of the organization to perform is optimized.

People have an innate desire to create value. The forces of destruction have often tempered the drivers of intrinsic motivation. When you are moving an organization from one based on fear and extrinsic motivation to one that removes these barriers to success it isn’t as easy as just saying things are different starting today.

Human systems are complex. Transitioning toward a culture that respects people takes work and expertise. Without creating a climate where respect for people is equal to all other priorities the impact of adopting Deming’s ideas on management are severely limited.

The scope of this topic, understanding of how to manage people within the Deming context, is large. All we can do in one blog post is skim over some of the key points. We will touch on this topic continually.

Please share your comments below and raise any topics you would like to see addressed in future posts.

Related: The Trouble with Motivation (Psychology) by Jussi Kyllonen – Reward and Incentive Programs are Ineffective — Even Harmful by Peter Scholtes – Motivation, Rewards, Performance Appraisals and Your Career

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12 Responses

  1. John Hunter says:

    Tweet on this post by Paul Akers “This brief post on The #Deming Institute is one of the most important articles you will ever read if you want to understand how to do it right. Read this once a week for the rest of your life…money is not the right motivator!”

    link to the Tweet:

  1. November 12, 2012

    “The greatest waste in America is failure to use the ability of people…”

  2. December 3, 2012

    […] The title of chapter 5 of the New Economics is Leadership. From that chapter, page 116 As I use the term here, the job of a leader is to accomplish transformation of his organization. He possesses knowledge, personality, and persuasive power (chapter 6 [Management of People]). […]

  3. February 10, 2013

    […] System of Profound Knowledge: psychology, understanding variation, viewing the organization as a system, theory of […]

  4. February 28, 2013

    […] increase the impact of weaknesses in the other areas. The problems fear creates result in bad data, ineffective decision making and the destruction of joy in […]

  5. April 29, 2013

    […] that allows our natural desire to take pride and joy in our work. When managing human system an appreciation for psychology allows managers to build systems that nurture intrinsic motivation and then benefit from the great […]

  6. May 9, 2013

    […] Understanding psychology is an important competent of Dr. Deming’s management system. Some of these ideas come naturally to many people. Those people understand that organizations often stifle the natural gifts people want to apply at work. They can set to work dismantling the systemic de-motivation engrained in many management systems when given the opportunity. […]

  7. July 2, 2013

    […] One of the most important functions of leadership is to help others interpret the meaning of events. Events don’t occur in a vacuum; they are the result of behavioral choices or decisions that people make. I think W.E. Deming appreciated this when he identified psychology as one of the four pillars of his System of Profound Knowledge. […]

  8. January 13, 2014

    To me it was amazing what people could do when they had purpose, knowledge, and a small stake in the outcome. It was the greatest management experience in my life…

  9. November 9, 2015

    […] Related: Attributing Fault to the Person Without Considering the System – “The greatest waste in America is failure to use the ability of people.” – Psychology: Managing Human Systems […]

  10. February 2, 2019

    […] has always played a huge role in improvement and excellence (Deming included psychology as part of his System of Profound Knowledge). Dan Schmitz discusses the SCARF model that leaders […]

  11. November 27, 2019

    […] brief post on The Deming Institute is one of the most important articles you will ever read if you want to […]

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