TQM comes down to earth

Sept. 14, 2006
I still remember the comment of an application engineer called in to help a company that had once won a Malcolm Baldrige award for quality.

— Leland Teschler, Editor

His head was spinning. He wondered aloud how this quality-award winner could get anything done because of all the time people there spent "contemplating their navels."

No question that Total Quality Management was big back in the early 1990s. It was promoted as a way for business to wring out inefficiencies and boost productivity. Management consultants heralded TQM as the key to competing with what, at the time, looked like the Japanese manufacturing juggernaut. Companies practicing TQM forced their suppliers to adopt similar programs. Some commentators even wrote about TQM in patriotic tones.

Today, of course, we know better. TQM and similar programs have their place but they are no cure-all. In fact, there have been well-publicized failures associated with TQM. Perhaps the most famous was the Wallace Co.'s entry into Chapter 11 a year after winning the Baldrige, and Florida Power and Light's drastic curtailment of its quality efforts after winning Japan's Demming Award.

Baldrige winners no longer make it on to the cover of magazines. (Can you name last year's recipient of the manufacturing award? It was Sunny Fresh Foods Inc.) But as the hype about the quality movement subsided, researchers with no axe to grind on TQM have studied its effectiveness. Some of their conclusions validate claims of TQM skeptics. For one thing, there is evidence that adopting TQM had no positive impact on the bottom line in many companies. It often did, however, enhance the reputation of companies adopting it and bolster the pay of their CEOs.

But the news isn't all bad for TQM. It looks as though late adopters of quality methods are more likely to see meaningful results than firms that climbed on the quality bandwagon early. One reason is that consultants who practice it have more experience with getting results and have a better idea of how to avoid the pitfalls. As with any management effort, TQM pays off when companies implement it systematically and with welldefined expectations.

That might be a lesson that early TQM adopters learned the hard way. So whatever happened to the Baldrige award winner my friend tried to help? You might be able to guess. Not long after his visit, the company changed top management and severe financial difficulties emerged. There were draconian job cuts and rumors of bankruptcy. The company has turned around, but people who bought shares when the firm was putting out press releases about its Baldrige award are not happy. Today the firm doesn't mention TQM in its letter to shareholders.

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