The Seven Deadly Diseases are Deming's enumeration of the most serious barriers to transformation of Western management, presented in out-of-the-crisis. They are: (1) lack of constancy of purpose to plan product and service that will have a market, keep the company in business, and provide jobs; (2) emphasis on short-term profits — short-term thinking fed by fear of unfriendly takeover and pressure from bankers and owners for dividends; (3) evaluation by performance, merit rating, or annual review of performance; (4) mobility of management — job hopping from one company to another; (5) running a company on visible figures alone, with little or no consideration of figures that are unknown or unknowable; (6) excessive medical costs; (7) excessive costs of warranty, fueled by lawyers who work on contingency fees.
Deming considered the Deadly Diseases more fundamental obstacles than the-14-points-for-management. His argument was structural: the 14 Points describe what management must do, but the Deadly Diseases describe systemic conditions that prevent management from doing it. A company that suffers from lack of constancy of purpose cannot implement Point 1 (create constancy of purpose). A company that emphasizes short-term profits cannot invest in the long-term process improvement that the 14 Points require. The diseases must be cured — or at least managed — before the points can take hold.
The third disease — evaluation by performance and merit rating — connects directly to Deming's broader critique of management-by-objectives-deming-s-critique. Deming argued that performance appraisals destroy teamwork, foster rivalry, build fear, and leave people bitter and despondent. This was among his most controversial positions, especially in American corporate culture where individual performance evaluation was considered axiomatic. The argument rests on the statistical insight from common-cause-vs-special-cause-variation: most variation in individual performance is attributable to the system, not the individual. Rating individuals for system-caused variation is statistically invalid and managerially destructive.
The fifth disease — running a company on visible figures alone — reflects the epistemological dimension of Deming's thinking that he later formalized in theory-of-knowledge as part of the system-of-profound-knowledge. The most important figures for management are unknown and unknowable: the multiplier effect of a happy customer, the cost of a dissatisfied customer, the gains from improved morale. Deming's insistence on this point challenged the quantitative management tradition and anticipated later critiques of metrics-driven management.