Total Quality Management

Total quality management (TQM) is an organizational activity that has received many labels since its widespread introduction to the American workplace in the early 1980s. It has been labeled as a comprehensive approach to management, a managerial philosophy, a set of tools for improving quality and customer focus, and an organizational development (OD) intervention that can affect both the business and the people side of operations. It is practiced by statisticians and engineers, psychologists and other behavioral scientists, and by CEOs, general managers, and HR professionals. Total quality management has been praised as the panacea for business competitiveness and survival, and it has been maligned as nothing more than a passing fad that has failed to deliver. Clearly, it is difficult to provide a comprehensive, unified definition of TQM that would inspire consensus from the wide range of academics, managers, and consultants who are invested in such a definition.

However, it is possible to identify the primary architects of TQM and to summarize the principles and assumptions that can be extracted from their work. It is widely agreed that the founders of TQM are W. Edwards Deming, Joseph Juran, and Kaoru Ishikawa. The assumptions of their collective work have been summarized as follows: (a) Quality (of goods and services) is essential for organizational survival; (b) the key to quality is through people, who inherently want to contribute to quality and will do so when trained and supported; (c) because organizations are systems comprising interdependent parts, quality improvement efforts should focus on cross-functional processes; and (d) quality must be driven from the top, by senior managers who are committed to and responsible for quality. From these assumptions flow several important principles, including the use of structured problem solving, data-driven decision making, SPC (statistical process control) tools, and employee involvement and development. From this, the essence of TQM can be distilled as a top-down commitment to quality, achieved through employee involvement in continuous process improvement.

The Evolution of Total Quality Management

The proliferation of quality and process improvement techniques and programs that preceded and followed TQM has resulted in confusion about what is and is not TQM. Predecessors include American-born quality of work life (QWL) interventions, the industrial-democracy movement in Europe, and the quality revolution in Japan, from which quality circles emerged. It is widely agreed that these quality improvement and employee involvement initiatives of the 1960s and 1970s provided the foundation on which TQM was built. A combination of factors converged in the late 1970s and early 1980s that would cause TQM to surpass all of these in its scope and impact. These included the quality crisis in American industry, unprecedented global competition, the demands of workers for involvement and empowerment, and the adaptation of quality principles for the nonmanufacturing sector.

The legitimacy of TQM was established in 1987 when Congress established the Malcolm Baldrige National Quality Award (MBNQA). This annual award recognizes quality excellence in business, health care, and education in the areas of strategic planning; leadership; customer and market focus; measurement, analysis, and knowledge management; human resources focus; process management; and business results. Although the MBNQA has helped to provide a common framework for assessing the implementation of quality practices and has contributed greatly to the growth of TQM, it has not resulted in conceptual clarity. One major source of conceptual muddiness is the relationship between TQM and employee involvement (EI), Six Sigma, and business process reengineering (BPR).

Toward Conceptual Clarity: TQM, EI, SIX SIGMA, AND BPR

As defined above, the major purpose of TQM is to improve the quality of goods and services. To do this systematically, an organization must fully engage all employees in the effort, which makes TQM a vehicle for employee involvement (EI). This places TQM into the broad category of programs known collectively as EI interventions. Employee involvement interventions attempt to increase employees’ input into decisions that affect performance and satisfaction. They are operationalized by the downward movement and diffusion of power, information, knowledge, and rewards. Formal EI approaches include older interventions such as quality circles, job enrichment, and sociotechnical systems. Two newer interventions, Six Sigma and business process reengineering (BPR), have also raised definitional confusion about how they differ from TQM. These boundaries are discussed below.

Six Sigma

Six Sigma is a particular approach to total quality management that emerged in the late 1980s from the quality improvement efforts at Motorola. Like TQM, it is a vehicle for employee involvement through structured quality improvement activities. Also like TQM, it has been embraced by companies around the world as a comprehensive framework for business management. Because it emerged from TQM, it shares the same assumptions described above. But it also has unique aspects that have made it the most popular form of TQM today. These include the use of a standardized improvement model (DMAIC, define-measure-analyze-improve-control), an extensive training program to prepare employees for varying levels of involvement, and the use of colorful terminology for these various levels. All employees receive Green Belt training, which prepares them to become members of Green Belt project teams. Green Belts are assisted by Black Belts, who are dedicated resources to support their organization’s quality efforts and who receive extensive training in group dynamics, DMAIC, and SPC tools. Some organizations also have intermediate levels of involvement called Yellow Belts.

Business Process Reengineering

Business process reengineering was popularized in the1993 best seller by Michael Hammer and James Champy, who first coined the phrase reengineering. They defined reengineering as the fundamental rethinking and radical redesign of business processes to achieve dramatic results. Business process reengineering and TQM are similar in that they both target work processes for quality improvements; however, they differ in two very fundamental ways. The first difference is that TQM, as described previously, relies on employee involvement as a central tenet, whereas BPR often lacks this feature. Instead, employees may be passive recipients of BPR-mandated changes. The second difference is the magnitude of the change produced. Although TQM targets existing work processes for incremental and continuous improvements, BPR attempts to radically redesign these processes, often through the use of information technology. Once work processes have been redesigned, it is often necessary to restructure the organization to support the new processes. This often alters the shape and size of the organization through the use of teaming, delayering, and downsizing. These latter outcomes have led to criticism, which is often backed up by claims that many reengineering efforts do not produce the dramatic results that are hoped for.

Implementation of Total Quality Management

Although implementation steps and timetables will be unique to each organization, the following steps are considered essential to a successful program.

1. Senior management commitment and training. Total quality management is a top-down approach that depends on the commitment and knowledge of senior-level leaders, who must champion the program and lead the culture change that it requires. Thus, they must receive formal training in quality principles and tools, allocate adequate resources to its successful implementation, and demonstrate their commitment to quality.
2. Employee training. Total quality management depends on employee involvement in quality improvement and requires extensive training to prepare employees for their role. Although training formats and time frames vary (ranging from two weeks to two years), all employees are expected to receive some minimal level of formal classroom training. Training content includes structured problem solving (using such tools as Six Sigma’s DMAIC), quality tools (histograms, flowcharts, control charts, and Pareto charts), and team dynamics.
3. Initiate quality improvement/Six Sigma projects. Quality activities occur through quality improvement (or Green Belt) projects, which are ideally undertaken by teams of employees who share a common work process. However, some projects are undertaken by individual employees working alone. Projects focus on mapping and measuring existing processes, and the application of quality methods to improve the processes (e.g., reduce the number of steps required) and their output (e.g., reduce variability). Deviations from targeted quality standards are monitored by the team via product control charts and customer satisfaction measures.
4. Monitor progress and reward results. Besides internal monitoring of process improvements, TQM also requires measurement against external standards. This usually involves benchmarking with “best-in-class” organizations, which are targeted as quality standard-bearers. Internal improvement efforts are designed to close the gap between the organization and its external benchmark. Management and employees may be rewarded for quality improvements through gainsharing or bonuses. Some organizations have tied involvement in quality projects to performance appraisals, although most programs rely most heavily on intrinsic rewards. A major reward for many employees is the opportunity to improve or streamline a faulty work process, which makes their job easier or more satisfying.

Implementation of BPR

1. Preparation and planning. Because of the transformational nature of the change desired, extensive preimplementation planning and preparation is required. Preparation includes a thorough understanding of strategic direction and supporting work processes as well as the competitive environment. The diagnosis attempts to identify the core business processes that support the desired strategic direction and targets them for reengineering. This step also builds commitment to the intervention as organizational leaders communicate the need for radical change.
2. Fundamentally rethink how work gets done. During this phase, core business processes are analyzed, using the same tools used during the analyze phase of a TQM or Six Sigma project. Process mapping shows all the current steps in the process and produces an as-is map of the targeted process. Performance metrics for each key process are also examined, and dramatic improvement goals, often derived from benchmarking, are then set. Finally, new work processes are engineered that will produce these dramatic results. In the most extreme approach to this phase, old work processes are completely eliminated and a blank slate is used to design new, streamlined processes. A common theme to eliminating steps and increasing value-adding activities is the use of information technology.
3. Restructure the organization to support the new processes. Although the structure must be aligned to support the specific aspects of the reengineered processes, some common characteristics include a change from functional departments to a process-based structure; flatter, leaner hierarchies; and the use of teams rather than individual jobs in allocating work. A systems approach must be taken to ensure the proper alignment of all human, managerial, information, and measurement subsystems.

Results of TQM and BPR

It is estimated that about 75% of Fortune 1,000 firms have implemented some form of TQM. Survey results indicate that 87% feel their TQM experience has been positive. Results claimed attributed to TQM include improved financial performance, employee relations, product quality, and customer satisfaction. A study of 54 companies using TQM reported that they outperformed a similar group of organizations not using TQM. The study reported the performance gains resulted from employee involvement benefits rather than the tools and techniques of TQM. A comprehensive examination of popular management techniques, including TQM and BPR, reported that organizations using these programs did not enjoy better economic performance than other organizations. However, organizations using these programs were more admired, were perceived to be more innovative, and were rated higher in management quality than other organizations. Despite these positive results, it should be acknowledged that there are companies using TQM and BPR that do not reap these benefits, and there are many instances of organizations terminating their programs.

References:

1. Buch, K., & Rivers, D. (2001). TQM: The role of leadership and culture. Leadership and Organization Development Journal, 22(2), 365-372.
2. Cummings, T. G., & Worley, C. G. (2005). Organization development and change. Mason, OH: Thomson/ South-Western.
3. Deming, W. E. (1986). Out of the crisis. Cambridge, MA: MIT Press.
4. Hackman, R. J., & Wageman, R. (1995). Total quality management: Empirical, conceptual, and practical issues. Administrative Science Quarterly, 40, 309-342.
5. Hammer, M., & Champy, J. (1993) Reengineeringthe corporation: A manifesto for business revolution. New York: HarperCollins.
6. Juran, J. (1974). Qualitycontrol handbook. New York: McGraw-Hill.
7. Lawler, E. E., III. (1992). High involvement management: The ultimate advantage. San Francisco: Jossey-Bass.

See also:

• Organizational Development