14 Principles

John Shook
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Most of you are familiar, I imagine, with the 14 Principles that my old colleague at the University of Michigan Prof. Jeff Liker describes in his landmark book The Toyota Way. And, I imagine most of you also know Dr. Deming’s 14 Principles of Quality Management from the 1980s (perhaps one of you Deming experts can clarify whether it was actually the 80s when he came out with them. Also, did he actually call them “principles”?). Since I spent some time discussing with Jeff as he was writing the Toyota Way, I think I can say that the similarity -- the number 14 -- was coincidental (Jeff, if you are there, please feel free to verify or correct!). But, I bet most of you do NOT know the original set of 14 management principles.

Henri Fayol laid down the first theory of general management and statement of management principles about 100 years ago. A French engineer, industry executive (in mining, where he was a successful turnaround executive), and management theorist in the 1800s, he wrote A Theory of Administration (I am told that would be “Administration Industrielle et Generale" in French) in 1916. For you Frederick Taylor fans, that would be five years after The Principles of Scientific Management.

I don’t read French and have never found a good English translation, but as I have pieced it together you can compare Fayol and Taylor like this: Taylor took a frontline engineering approach, examining work methods and efficiency, while Fayol took a top-down business administration approach, examining management, and organization. They both embraced functional specialization and a reductionist approach to understanding how organizations do and should operate.

Fayol discussed five functions of management, not dissimilar to other views (Drucker for example) of the tasks of managers:

  • Planning
  • Organizing
  • Commanding
  • Coordinating activities
  • Controlling performance

But, what has long fascinated me about Fayol is his list of 14 principles. Aside from the funny fact that his principles total exactly 14 - same as both Deming and Liker - what is significant about Fayol’s early articulation of management principles is the basic thinking they represent. These 14 principles of management of Henri Fayol comprise a comprehensive framework of general organizational management:

  1. Specialization or division of labor
  2. Authority with responsibility
  3. Discipline
  4. Unity of command
  5. Unity of direction
  6. Subordination of individual interests
  7. Remuneration
  8. Centralization
  9. Clear line of authority
  10. Order
  11. Equity
  12. Lifetime employment
  13. Initiative
  14. Esprit de corps

Note in particular, Fayol’s number two -- authority with responsibility-- an important topic dealt with in Managing to Learn. The basic assumption that authority should equal responsibility is the root of much organizational evil, a topic I will return to again. In the meantime, you can check out the relevant sidebar that appears on page 81 of MTL here.

These 14 principles of management of Henri Fayol comprise a comprehensive framework of general organizational management. Even though you never heard of them until today, they have been infecting the way you’ve thought about organizations your whole work life.


John ShookSenior Advisor, Lean Enterprise Institute

5 Comments | Post a Comment
Jim Frost January 17, 2009
I recently thought of Deming's list and Liker's and had already noted similarities. My thoughts went there because I know they were in his book "Out of the Crisis", and we're all in a middle of one. Deming offered fourteen key principles for management for transforming business effectiveness. The points were first presented in his book Out of the Crisis (p. 23-24), first published in 1982. I pulled out my copy, it's amazing how appropriate it is today. I've recommended to clients and government people I know. Obama may want to get a copy. The 14 -
1.Create constancy of purpose toward improvement of product and service, with the aim to become competitive and stay in business, and to provide jobs.
2.Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
3.Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
4.End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move towards a single supplier for any one item, on a long-term relationship of loyalty and trust.
5.Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease cost.
6.Institute training on the job.
7.Institute leadership (see Point 12 and Ch. 8 of "Out of the Crisis"). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
8.Drive out fear, so that everyone may work effectively for the company. (See Ch. 3 of "Out of the Crisis")
9.Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
10.Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
11.a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute workmanship.
12.a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (See CH. 3 of "Out of the Crisis").
13.Institute a vigorous program of education and self-improvement.
14.Put everyone in the company to work to accomplish the transformation. The transformation is everyone's work.
Now re-read and insert banks, wall street, healthcare, government, GM, Chrysler

Jim Frost
CEN January 20, 2009

Interesting observation. In particular, the referenece to MTL excerpt about responsibility and authority. "The lean company operates on a shared understanding of the desired corporate direction." I believe that this is true within a lean learning organization. However, this seems to be difficult for many companies to grasp. Any ideas or suggestions on overcoming this barrier?
manex13 January 20, 2009
I don't know how it is in the US, but in Ukraine the principles of Fayol and Teylor are studied almost by the all students of the ecomic faculties.

Anyway thanks for reminding them again and their comparison with the recent authors.

Mike Clayton January 20, 2009
Fayol was emphasized in the MBA programs of the 1970's, along with Herzberg and Mazlow and Taylor, but the emphasis at that time was on TURNOVER and PRODUCTIVITY issues vs JOB SATISFACTION and nobody could correlate anything about that latter with the two former isssues. And the spreadsheet had not yet been invented!! So at least we learned to do the math the hard way!

Then in the 1980's the Deming and TQM ideas took hold as Japan was kicking our butts...with Deming's help earlier. And we started to use statistical methods and really get higher productivity from the insights we found that way. JIT push came along, morphing in next decade into Lean et al. Much agonizing over consultant's language and acronyms. But we had spreadsheet technology now!!

In the 1990's times were excessively good, and most MBA programs focused on Financial Metrics, Mergers and Acquisitions, or so it seems to me. Spreadsheet tools dominated in factories. And Powerpoint slides ruled the sales world. Thinking was replaced by meetings.

The Nauties (2000-2010) was one crisis after another, with much discussion about CEO pay, Integrity, Greed, and Prediction Models for the Market, Earthquakes, and other discontinuities. Spreadsheets and Powerpoint did not help much. People started digging back into the past for some sense of historical perspective (like the depression period, which was now re-explained badly by most.) And Gary Shilling was proven right again!

So I assume we will now discover the wisdom in the pre-spreadsheet thinkers, and the danger of powerpoint slides, and get back to basics once more...if we really understand what is basic! Perhaps Lean.Org can help us redefine what is really basic to the process control problem that we call the global economy???

Mike Clayton
Mark Graban January 20, 2009
Dr. Deming just called them his "14 Points".