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Can TQM lead to maturity in quality?

Lennart Sandholm
Professor and President Sandholm Associates AB, Sweden

An increasing interest in quality has been noticeable in the West during the past ten years. More and more companies have become involved with quality activities of various kinds, many of these referred to as total quality management (TQM). Management journals write quite a lot about quality and TQM. The range of conferences about quality is growing. The word "Quality" is beginning to be some-what worn, used, as it is, in different contexts.

But what about the quality of goods being produced and services given? Has quality really improved in proportion to the increased interest? The answer isn't an unconditional "Yes". Some companies have been successful but the majority of companies show a poor "Return on TQM". Why are results so poor? What can be done about it? Is there a lack of maturity in quality?

Five phases in quality

In the 35 years that I have been involved in quality, I have come to the belief that there are five phases in quality:

• Dormant
• Awakening
• Groping
• Action
• Maturity

In the dormant phase, companies do not feel any threat in the market place. They earn acceptable income. Quality need not be given special consideration. For Western companies life was like this until the end of the 1970s.

The awakening phase in the West took place in the late 1970s and early 1980s. At that time, many Western companies found themselves to be in a crisis due to Japanese competition. It became evident to many of the companies affected that the reason was quality. The awakening phase in Japan had taken place 30 years earlier.

The groping phase in the West is going on right now. It is manifested in the plethora of methods and tools emerging, being highlighted for some time and then fading away. It is a period of trial and error.

The action phase has been reached by some companies in the West. Those are the companies that have experienced that trendy tools and methods do not lead to excellent results. These companies have started and carried out effective programmes for changing the situation. Such programmes include a change of the internal culture, as well as through improvements of products and processes.

The maturity phase is still to come in most Western companies. The exceptions might be companies which have been awarded a quality award in line with The European Quality Award or The Malcolm Baldrige National Quality Award in USA, since these awards go far beyond trendy methods and tools. The Japanese companies which continue to be successful in the world market have been in the maturity phase for many years.

I sincerely hope that most Western companies have reached the maturity phase by the year 2000. A real sign of maturity will be when we stop talking about quality and TQM. In this vision we achieve full customer satisfaction through perfect processes. This will be a natural part of business.

Quality in the West

Right now there is a very great interest in ISO 9000. This interest is manifested in different ways: conferences, published articles, hordes of consultants, etc. Is this a good sign? Maybe. Maybe not. Maybe it is just another trendy phenomenon in quality.

Ten years ago quality circles were highly fashionable in the West. Many top managers, egged on by consultants and other so-called quality experts, thought that by introducing quality circles they would solve quality problems in their companies. What was the result? Not much! Now few companies, if any, still use quality circles. What happened as a result of these quality circles was that companies lost three to five years in terms of real quality improvements.

A list of what I will call trendy methods and tools includes "Zero Defects", quality circles, statistical process control (SPC), quality function deployment (QFD), seven tools, "TQM", ISO 9000, benchmarking, process reengineering, etc. There was virtually an explosion in this area in the 1980s, when it dawned on many Western companies that they were being driven out of business by Japanese companies. Companies in the West found that they had to do something and were willing to try anything.

There's nothing wrong with these methods and tools as such. The fault lies in how they are implemented. They are used as general methods and tools for quality improvement and, used in this manner, will only lead to marginal improvement. They ought only to be used when an analysis indicates that they are the appropriate measures to eliminate specific problems or to better meet the needs of customers. The same is true for all other methods and tools which are part of the quality profession and which have not yet been widely publicized, even though they may have a much greater effect on the results achieved.

Those in the forefront of launching fashionable ideas may reply that these are methods and tools used in Japan. This is true, of course. But the Japanese are so mature and sensible that they use all the methods which, in each specific case, lead towards the intended goal. The goal comes first. The means are chosen accordingly. Naturally, these means may include some of the methods and tools that have become trendy in the West.

Lack of progress

Why are there still so few companies who achieve excellence in quality? Why are there still so many companies paying lip-service to quality? Why this plethora of trendy methods and tools?

There are two reasons: immaturity and ignorance.

Many Western companies lack maturity in quality. In the 35 years I have been involved in quality matters, both at national and international level, I have seen an increasing maturity. In the Western world, however, the development is too slow. More rapid change will be essential in the years to come.

When talking about quality maturity, a comparison could be made with finance. There are many similarities between financial work and quality work. In financial work, we don't use trendy methods and tools. The reason is, of course, that, in financial work, companies are mature.

As far as quality is concerned we can see that a great number of people in the West are ignorant. Four groups have to be focused on: top managers, quality managers, consultants and university professors.

Recognized champions vs. potential champions

In Table 1 a comparison is made between companies which are successful in quality (recognized champions) and companies which still have a lot to do (potential champions).

Table 1. Characterization of successful companies (recognized champions) and less successful companies (potential champions)

Effective strategies for TQM

For companies who aim to reach maturity in quality, it is necessary to have some form of strategy. Companies who choose strategies which are only based on trendy methods and tools are doomed to fail.

Effective strategies for TQM are needed to achieve the maximum result. There are four strategies which are of prime consideration. For the best result, input based on all four strategies is required.

Strategy 1: Hands-on leadership

Leadership belongs to the managing director. He, or she, is the number one leader for quality, using a "hands-on" approach in this respect. Leadership of this kind requires a number of measures to be instigated by the managing director:

• A quality policy, incorporating a quality vision and corresponding guiding principles is put into practice and is made known to everyone in the com-pany.
• Starting with the general goals, quantitative goals for quality are set for all functions and at all levels. Goals which are "stretch" goals are especially important. Plans on how to reach these goals are drawn up, carried out and followed up.
• The procedures necessary for working with quality are implemented on the basis of the quality policy. The extent of these depends on the size of the company. The requirements set out in ISO 9000 can be used a checklist.
• A clear distribution of responsibility for activities concerning quality must be stated. This means organizational development.
• All personnel must be given the conditions needed to enable them to carry out their work in a manner by which quality goals can be achieved. Trust and delegation are the hallmarks of leadership.

Strategy 2: Massive training

Moving from "potential champion" to "recognized champion" involves a meta-morphosis, great changes in the culture of a company. Everyone's attitude must change. In addition, in many areas, new knowledge is needed. The purpose of the massive training is to achieve this change of attitude and impart the new knowledge required. Quality training is directed towards everyone in the com-pany, irrespective of position or function. But, training must start at the top, with top management, then filter down through all levels in the organization.

Extensive training for quality has several elements:

• Seminars for top management and executives aimed at giving insight into the importance of quality with respect to profitability and to show how top management can improve efficiency and profitability through "hands-on" leadership.
• Workshops for all managers and other personnel in key positions. These workshops lead to an understanding of how cross-functional activities are a prerequisite for successful work on quality.
• Specialists in different functions are trained in the approaches and methods intended to be used in each function.
• Training for other personnel categories is carried out. This training will enable each and everyone to understand their own role in quality work.

Strategy 3: Market orientation

Successful companies have a pronounced market orientation which includes both focus on customers and customer needs and awareness of competitors.

A market oriented operational approach includes:

• Customers' and users' needs, expressed and implied, are ascertained by market research.
• Competitor studies are carried out continuously.
• Market trends are monitored closely.
• Activities, from the initial idea to end use at customers, are planned and run with a view to quality.

Strategy 4: Programme for quality improvement

A prerequisite for success in the face of stiff competition in the market is con-tinuous work on quality improvements. This work takes two directions. One is towards being able to meet customer needs better, the other is to improve all kinds of processes within the company - production planning, product development, purchasing, manufacturing, distribution, invoicing, etc. These processes are often complex and interdepartmental which may lead to inefficiency, unnecessary costs, unclear responsibility, dissatisfied customers and, in the final analysis, even lost orders.

A programme for quality improvement has several components:

• A quality council is set up at the highest level with the managing director as chairman: establishing priorities, controlling, coordinating, evaluating and following up activities.
• Routines are worked out to tackle chronic problems. These routines are implemented. Chronic problems are usually more important to the company than sporadic ones.
• Training in quality improvement tools and methods is provided.
• Data on the cost of poor quality are collected. Hidden costs shouldn't be forgotten - they are usually the highest.
• Information and feedback from the market and customers are improved.
• The entire operation is studied and evaluated. The criteria of The Malcolm Baldrige National Award or similar awards are very useful. A systematic comparison with other companies is carried out, i.e. benchmarking.