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21.7 Pitfalls and problems of TQM

Like any management approach, TQM does not protect from failures and implementation problems. According to data provided by the Juran Institute,9 80 per cent of the companies that tackled TQM in the 1980s failed. One of the reasons is that the origin and dissemination patterns of TQM are quite different from those of almost every other management innovation of the past 30 years. As a result, many companies have misunderstood and misapplied it. It has not received the careful academic scrutiny that has served to give credence and authority to other innovations in organization and management.

Management may well go into a TQM process without a proper understanding of the necessary organizational conditions for its successful implementation, or of the barriers existing in the company. Some of these barriers are:

●Lack of awareness among top managers about TQM, its potential, when to use it and their own role in managing quality.

●A company culture that is not conducive; changing culture is difficult.

●Middle managers who are reluctant to change their attitudes and behaviour.

●Lack of time and funding for the training and development of teams.

●Difficulty in quantifying tangible benefits, leading to a feeling that the effort is not worth while.

However, in most cases, poor results of TQM are caused by top managers. They often have an incorrect vision disconnected from organizational values and behaviour, and their objectives are vague and short-term. They do not understand TQM and fail to set an example, believing that others have to change and perform better but not them. Very few senior managers understand statistics, and do not look at the world in terms of data and facts but rather through gut feeling. Also, employees are often not well trained in the new skills required by TQM; they may feel threatened and are not properly motivated since they do not see the potential benefits of TQM. Too much emphasis on doing things right the first time often kills creativity and initiative, and deprives employees of learning from experience.

In many organizations, CEOs and senior line managers are late in confronting issues of software quality. As a result, many companies have accumulated a lot of incompatible, customized software systems designed to handle the same applications. IT companies often face similar problems, particularly if they have grown rapidly through a series of acquisitions.10

Ignoring the customer is another common mistake in implementing TQM. And certainly one of the major management mistakes is selecting TQM for the wrong task. TQM cannot be used, for example, to introduce very fast and radical change. It is not a cure-all. It does not directly address such factors of success as competitive positioning, marketing, financial structure, diversification, organizational structure and corporate strategy, nor does it adequately support aggressive cost

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management. The TQM approach to organizational restructuring is ineffective in most situations, especially where organizations need fast and significant improvement.

21.8 Impact on management

The long road towards TQM takes companies into a new landscape where authority, decisions and innovation are much more widely shared. That is why the first priority in implementing company-wide TQM is to recognize its revolutionary character and permit it to drive system-wide changes. TQM demands that top management become agents of change, redefining management roles and structure, and accepting loss of their own power in the process. Attempting to foster quality improvement in production operations in the lower echelons of the organization while maintaining conventional top-down management inevitably creates conflict. Thus, TQM upsets traditional power structures and ways of doing business. It changes the way people work and the processes used – from design to delivery. TQM holds that change within an organization is inevitable.

Implications for management style and practices

Consultants have to make sure that management takes ownership of TQM and allows it to cascade down the entire organization. Ownership of TQM comes in the form of management making a total commitment to excellence, and it cannot be delegated since ownership rests with the top management. It is a strategic decision which signals a total organizational commitment to excellence, to be embraced by all. An organization that starts on the TQM journey should have an appropriate system in place to achieve managerial excellence.

A good summary of the features of the TQM management style has been made by Kano.11 It includes:

●Management by facts: managing or following the PDCA cycle on the basis of facts rather than relying solely on experience and intuition (although they are important).

●Process management: paying attention to the process steps of the job, so that planned and targeted performance results are always achieved.

●Three types of managing – maintenance, improvement and development: maintenance is needed to hold the current level of performance steady when it is at the desirable level; improvement is the activity needed to upgrade the current level to a more desirable one; development-type management should promote innovations and creativity.

●Standardization versus creativity and flexibility: creating new products and services does not necessarily mean creating completely original activities from scratch. New products and services invariably include some activities and components that were in previous products and services. There is a need to be original in those areas where there is no previous experience.

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Impact on organizations

Since TQM requires dramatic changes in processes and management practices, it requires a different type of organization as well. Jobs become less specialized, not only horizontally, but vertically too; employee participation in high-level management decisions increases; flows of information and communication become less vertical and more lateral and open. Because of diffusion of coordination and involvement of cross-functional teams in horizontal communication with other teams and units, managers’ span of control increases and some layers of middle management and corporate staff are removed. These changes result in flatter, team-based organizational structures built around processes, not power; clusters and networks become part of corporate structure. It is difficult to implement TQM in a rigid bureaucratic organization.

Within an organization, TQM creates an environment that produces excellence and completely changes the organizational culture. Since dealing with culture may take years, TQM should normally be considered as a long-term approach that in itself facilitates the development of a culture that is consistent, committed, systematic and process-oriented. The following terms express in a telegraphic way what is involved:

●empowerment;

●team-based;

●collaborative management;

●100 per cent involvement in quality;

●continuous learning;

●everyone trained in quality tools;

●strong human resource policies;

●respect for the individual.

If the necessary organizational culture has not been clearly identified and communicated throughout the organization, this should be the first step prior to applying the TQM approach. The simplest way is to determine what the existing culture is and then decide how the TQM approach will fit it, or to identify the gap between what exists and what is desirable from the TQM perspective. A value clarification exercise should start with a review of the elements of the TQM strategy, and then progress to an analysis of what needs to happen within the organization for that strategy to be successful. Values and guiding principles should be the central focus.

21.9 Consulting competencies for TQM

TQM is very similar in its philosophy to the continuous improvement or kaizen system (see Chapter 20). The approach is built on a similar set of assumptions which require a process-consulting approach rather than an expert-oriented one

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(see Chapter 3). The process is one of transforming the organization from within, versus top-down and often forced structural change.

Particularly important for a TQM consultant, besides a thorough knowledge of quality concepts, processes, tools and techniques, are skills in facilitation, questioning, observation and interactive behaviour analysis; patience; communication skills; and the ability to contribute ideas and opinions only when this is required for continuing the TQM process.

1S. Krishnan, A. Agus and N. Husain: “Cost of quality: The hidden costs”, in Total Quality Management (Abingdon), July 2000.

2R. Yogendram: “Cost of quality. Why is it critical?”, in Productivity Digest, Feb. 1999, pp. 37–40.

3Juran Institute: Quality improvement guide (Wilton, CT, 1993).

4K. Bhote: “A powerful new tool kit for 21st century”, in National Productivity Review, Autumn 1997, pp. 29–38.

5Ibid.

6A. Gabor: “He made America think about quality”, in Fortune, 30 Oct. 2000, pp. 119–120.

7See www.iso.org., visited on 2 Apr. 2002.

8Y. Iizuka: “Integrating ISO 9000 with Japan’s TQM”, in APO Productivity Journal, Winter 1996, pp. 3–21.

9H. Blackiston: “A barometer of trends in quality management”, in National Productivity Review, Winter 1996, p. 17.

10C. Prahalad and M. Krishnan: “The new meaning of quality in the information age”, in Harvard Business Review, Sep.–Oct. 1999, pp. 109–117.

11N. Kano (ed.): Guide to TQM in service industries (Tokyo, APO, 1996).

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The growing competition linked to globalization, the introduction of new technology, economic liberalization and deregulation, and changing societal expectations and values create an environment of permanent turbulence. Faced with such turbulence, few companies have escaped the need to reorganize, downsize, outsource, acquire or divest. Over the past twenty years, thousands of companies have tried to remake themselves into better competitors, including large organizations such as Ford, General Motors, BMW, British Airways and Cisco.

Whether it is a one-time action to increase shareholder value or an ongoing process aimed at improving general competitiveness, restructuring is going to stay high on the agenda of top executives, social organizations, governments and certainly management consultants. As a result of environmental pressures and changes, a new paradigm of the company has been emerging. The modern company must be flexible, highly customer-oriented, with temporary structures and fewer levels of management. Its managers should have a broader span of control with lower levels having more power and bigger roles. Project teams and self-managing teams are becoming more frequent features of the flexible and successful organization. The company owns and controls its core – the core competencies – while breaking down existing boundaries by outsourcing noncore functions to best-in-class and long-term business partners.

Such a business model requires a corresponding executive mind-set, organizational strategy, corporate culture, and operations achieving the following strategic shifts:

●from vertical integration to value acquisition;

●from seeing organizational size as an advantage to seeing flexibility as an advantage;

●from focus on cost control to focus on generating shareholder value;

●from focus on control of resources to focus on core competencies;

●from managing how to managing what.

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