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Performance Improvement
H. James Harrington

If TQM is Dead ...

Its blood stains the hands of those who implemented it poorly.

Many people believe that total quality management (TQM) is dead, that the memorial service is over, and that the flowers have all withered and died. They believe TQM was a fad that didn't produce the desired results. I've seen figures that would lead people to believe that up to 70 percent of the organizations that tried the TQM approach failed to realize significant benefits from it and, as a result, dropped it. If these claims are true, 30 percent of the organizations that tried TQM found it extremely beneficial. What was it that made TQM work for these organizations when it didn't work for the other 70 percent?

 Obviously, the basic concepts worked when they were applied correctly, or they wouldn't have been successful in any organization. Some of these concepts are:

  Customer expectations should be met.

  Employees should be trained to understand their jobs.

  Employees should be trained to problem solve.

  Management must be committed to and lead the quality movement.

  The processes are the major problem.

  Supplier partnerships must exist.

  Excess stock must be eliminated.

  Statistics can be used to predict and prevent errors.

  People should be involved in the decisions that affect them, and empowered to act on their own.

  Teams that create a teamwork environment need to be developed.

  Product benchmarking should be used to understand the competition.

  Process benchmarking should be used to define how well your processes can perform and to help define how to improve the present processes.

  Bureaucracy and nonvalue-added activities should be eliminated.

  Performance drivers should be measured.

  The quality of the support areas is as important as the quality of the end product.

  The organization must continuously improve.

 Take a minute to review the list and delete any concept you think should not be part of any organization's basic operating beliefs. I'll bet that 90 percent of them remain untouched.

 Organizations that didn't benefit from TQM were unsuccessful not because of the concepts but because of the manner in which the concepts were implemented. Some of the mistakes made in implementing TQM are as follows:

  Not getting top management fully committed before the rollout

  Making quality a project, not a continuous process

  Management believing that employees are the problem, not part of the solution

  Not creating an environment that encourages people to take reasonable risks

  Over-reliance on consensus decision making, to the point that it stifles creativity and bogs down the decision-making process

  Believing that all tools are right for all organizations and not realizing that tools that work for a while can outgrow their usefulness

  Not using organizational-change concepts

  Failing to make quality a priority

  Involving everyone too soon

  Not involving everyone

  Expecting immediate financial results

  Not focusing on measurement

  Not beginning sooner

 TQM is a sound philosophy that will produce significant long-term performance improvement if used correctly. A five-year study, conducted at the Georgia Institute of Technology and the College of William and Mary, proves my point. The researchers selected a group of 600 publicly traded organizations that had won awards for effectively implementing TQM. They then selected a control group similar in size and industry to the award winners and compared both groups' performances during the five years prior to and five years after winning the awards. Key performance measurements such as stock prices, operating income, sales and total assets were compared. The performance of the control and variable groups showed no significant differences during the five-year period before the awards were received. However, the award group far outperformed the control group at the end of the five-year period after the awards were received. For example, stock prices increased by 44 percent, sales growth by 37 percent and operating income by 48 percent. The total assets of the control group grew by 37 percent, but the assets of the award group grew by 79 percent.

 This study revealed that, contrary to common belief, small organizations benefit much more from implementing TQM than do large organizations. For example, small organizations in the award group recorded almost 300 percent greater growth in operating income than larger organizations in the same group.

 Between 20 percent and 40 percent of U.S. organizations tried TQM. If 70 percent of them failed, only about 10 percent of the organizations in the United States are correctly using TQM. Just think of the economic growth that the United States would realize if that percentage could be increased to 40 percent or 50 percent! Let's all get behind improving our quality of life by correctly implementing TQM in our organizations.

About the author

 H. James Harrington can be reached by e-mail at jharrington@qualitydigest.com , or visit his Web site at www.hjharrington.com .