Did you know that, in a typical American Company, almost 40% of the resources are wasted redoing something that was done wrong the first time?
Did you realize that an average of only 35% of an employee's time is invested in actually doing the work or adding value to the job?
These are scary thoughts, I know. Yet, I've been privileged to see first-hand how some executives have turned things around brilliantly. One of them is Paula Marshall-Chapman, CEO of The Bama Companies in Tulsa. She instituted a solid quality program, called Bama Institute, for which we conceptualized and created the materials. Through Bama Institute, Paula made education and development a top priority in her successful drive toward higher quality.
Today's marketplace demands quality , and to survive in this environment, businesses must seek quality with single-minded zeal. That's why organizations everywhere, large and small, are pursuing Total Quality Management (TQM) .
At the risk of repeating something you already know well, TQM is a whole new way of looking at quality. It builds quality in instead of adding it on.
Customer satisfaction.
Continuous improvement.
Responsibility on the part of each individual involved in producing products and services.
These points may be all too familiar to you, but as Dr. Samuel Johnson used to say, "What we need is not so much to be taught new truths as to be reminded of old truths we already know." So let's look at what this all means.
TQM looks at quality through the eyes of the customer . The business pursuing TQM must determine what qualities its customers want and find ways to build those qualities into their products.
TQM stresses communication. People have to share information and ideas.
TQM relies on teamwork . Internal competition discourages quality. As my friend, Charles Dygert, points out, "In cooperative situations, others are depending on you to succeed. In competitive situations, others hope to see you fail."
TQM calls for empowerment . Give your employees the authority to make spot decisions without constantly checking with supervisors.
TQM uses fact-based decision-making . When things go wrong, the emphasis shifts from "who did it" to "what happened and why?" TQM looks at the process. What are the steps in the process, and at which step did the problem occur?
TQM requires feedback . Management lets employees know in what areas they're doing well and in what areas they need to improve. It finds ways to reward productive, quality-oriented behavior and provides disincentives for unproductive behavior that inhibits quality.
TQM is a long-range, never-ending process . It takes time to make the changes necessary to achieve superb quality. That quality can vanish overnight if you don't institutionalize the process.
To adopt TQM, you must establish a qualilty culture , with employee involvement as a key ingredient. This requires more than training employees in mechanical and statistical techniques. It means educating your work force in the new way of doing things .
Employees must learn to see their jobs not as machine operators or order processors, but as value adders . They must adopt an attitude that puts quality first and refuses to accept second-rate results.
This calls for developing, teaching and nurturing quality-oriented values. When Levi Strauss embarked on its quality-improvement course, it adopted an Aspirations Statement as an authoritative guide for new behaviors. Then it developed a comprehensive educational program to teach its people to practice the behavior outlined in the Aspirations Statement.
When Xerox embarked on its program of "Leadership Through Quality," each of its employees received at least a basic 28-hour course in the new culture.
One of my clients, Duke Power Company in the Carolinas, adopted a set of "Guiding Principles" and made sure that each of its employees became familiar with them. Among other things, it printed them on wallet-size cards so that employees could use them as a checklist.
If you study successful TQM efforts, you'll find that they share a number of characteristics. Here are some keys to success I have observed:
TQM stresses prevention instead of inspection and correction . Studies show that one dollar spent on prevention is worth ten dollars spent on inspection and correction. One IBM division discovered that it was processing 96% of its orders perfectly, but fixing the remaining 4% was occupying 58% of the people and hardware.
TQM emphasizes incremental improvements, not major breakthroughs . In baseball language, this means relying on lots of singles instead of the occasional grand slam. Look for ways to make small improvements. The cumulative effect will amaze you.
TQM links quality efforts to the bottom line . Some executives confuse the means with the ends. It's meaningless to say "We've trained 1,000 employees in TQM." What matters is the effect this training has on your company's performance.
Iomega Corporation of Roy, Utah, which manufactures disk drives for computers, cut the production cycle for its product from 28 days to 1-1/2 days, but that wasn't the ultimate benefit. The real benefit was going from a $36 million net loss in 1986 to a $14 million profit in 1991. Look for things that have a measurable effect on performance, as measured by return on assets and value added per employee.
Quality comes from practicing the fundamentals . Look for the things that add value, look for ways to simplify, and look for ways to move faster.
Some quality-enhancing ideas are amazingly simple. L.L. Bean, which sells paraphernalia for outdoors people, found that it could significantly improve the speed and accuracy of its shipping department by stocking high-volume items close to packing stations. The idea came from the workers themselves. They periodically plot flow charts to look for bottlenecks and impediments to quality.
Iomega cut the production cycle on its product by attacking bottlenecks. One of the steps it took was to group its equipment in clustters of related operations. This enabled it to assemble its products in one continuous operation without having to store parts for days at a time in holding zones.
BENCHMARKING CAN BE A POWERFUL TOOL FOR ACHIEVING TQM
Benchmarking means examining the methods of another business that is doing things right and establishing its methods as your minimum standard.
Xerox carried benchmarking one step further. It looked at other companies in search of the best practices. Based on these practices, it projected what the highest standards would be in the future. Then it developed strategies for matching the future standards.
A word of caution: Don't undertake benchmarking until you have a comprehensive quality program in place . If you're a small business, don't use world-class enterprises as your benchmarks. Instead, look at your competitors and find ways to improve on their methods.
Implementing Total Quality Management requires change . That's a scary thought for many people. Not everybody relishes change and challenge. Most people want to achieve comfortable plateaus and remain there. They'd rather be comfortable than excellent.
But you and I know that we don't stay in business by staying comfortable. We stay in business by achieving excellence -- and then improving on it. Total Quality Management is a system for institutionalizing excellence.