A Key Reason Why Total Quality Management Worked: Trust

A colleague shared the following instructive story with me.  It has apparently been circulating around the internet via email so I can’t identify an author, and while it may be completely fictional or simply exaggerated, the story suggests some key reasons why Total Quality Management (TQM), prevalent in the 1980′s but mostly forgotten today, actually worked.  First, the story, taken verbatim (with spelling errors) from my email: A Short Story for The Engineers

Finding the Roots of Organizational Incompetence

First let me define my term “Organizational Incompetence”.  Sometimes in business you sit in a meeting and hear people grousing and struggling, and perhaps arguing and talking over each other in their frustration.  The problems they describe are almost always not of their own making, nor do they have the wherewithal to remedy them by themselves.  You begin to perceive that on some particular aspect of business the organization just doesn’t do well, and it keeps posing problems to groups and individuals and holding up productive work.  The appearance is that the organization is incompetent, at least in some particular way or area, and is suffering from needless cost, waste, and widespread frustration and stress.  In essence, the organization or a system within it is dysfunctional.  So how does this occur and what can you do about it?

Replace Pay-for-Performance and Annual Reviews with Leadership for Meaningful Improvement

Pay-for-performance, merit pay, and annual reviews have not worked out well.  W. Edwards Deming started as a statistician but became one of the greatest business thinkers in human history. His ability to penetrate common business issues and get to the fundamental truths and fallacies behind them was amazing. His research clearly illuminated what most of us had already felt, if we took the time to think about it: pay-for-performance and periodic performance reviews, while often yielding us pay increases and other rewards, almost always left us feeling mistreated and angry, and sometimes in competition with our colleagues – not a good feeling.  Why is this?

A Great Business Tool, But Who Has the Nerve to Suggest It?

I just noticed the Dilbert Meeting Cost Calculator, complete with features like a big display that reads out in dollars flanked by buttons that let you enter the number of people and the average rate.  It updates once per second, which I think is particularly attractive and eye catching, and will beep or flash a light every 15 minutes if desired.

I imagine this device in a meeting, how it might be introduced, how some (possibly of senior rank) might react violently to its presence, or think it extremely unfunny, and unwelcome.  I then consider how one’s career might be damaged.

I also imagine it on the table at a working meeting that includes no managers-or-above.  People would probably accept it with humor and then keep checking it throughout a meeting.  My sense is it would measurably save time and cost.

Now the problem: how to introduce it …  see if colleague Robert would take a fancy to it and use it in one of his meetings? … Leave it sitting on my desk for a while and see if someone notices it? … (see how fast it gets stolen) … Jeff seems crazy enough – he might use it …   I can’t help it.  The thought of trying to introduce this to most groups at work makes me cringe, but the effect would be so fine to see.

Why Leave Annual Performance Reviews Behind?

Performance reviews have long been known to do more harm than good. I have written on this topic before (link), but I’m not alone: here’s National Public Radio coverage of a new book on the topic.  Why are annual performance reviews still around?

Corporate Social Responsibility – Good, Bad, or Realistic?

Here’s a very interesting article detailing a debate held at The University of Michigan Ross School of Business, Oct. 20, 2010, on corporate social responsibility.  Here also is my favorite quote from the debate:

“Companies are given a wonderful privilege in society, which is limited liability. And I think society should say to companies the quid pro quo for limited liability is that you will not play a political role at all. Citizens play a political role; companies should just obey political laws, and that’s it. …But the least we can do — and I agree totally with Tom — is have much more transparency and pressure on companies to make their lobbying transparent.”  — Aneel Karnani, associate professor of strategy, Ross School of Business, The University of Michigan, Oct. 20, 2010

Please read the entire article for some very thought provoking discussion on the topic of corporate social responsibility, if the topic interests you.  I maintain that this is a key aspect of corporate behavior, and critical at a time when corporate power is expanding rapidly in our political system and threatening to swamp the influence of the electorate.

As always, I welcome your comments.  – Tim

Understanding Human Motivation and Why We’re Different from Other Primates

The understanding of human nature is fundamental to being a good manager.  This video lecture by Robert Sapolsky is the most advanced information I have seen on human motivation to date, and is the most striking exposition of the difference between humans and the other primates I have yet see.  This is a “must watch” in my opinion.

Please feel free to comment on this key area of knowledge, the ground-breaking work of Dr. Sapolsky, and how it relates to the effectiveness of a manager.     — Tim

Would You Do Business With Someone You Can’t Trust? How Corporations Become Predatory

Would you do business with someone you can’t trust?  It may be unavoidable. First some discussion of my approach to this article: I know it comes off as a huge generalization at first glance, but my intent is to suggest a path by which some corporations come to behave as they do, not to make a blanket indictment of business in general or any specific organizations.  Like most of you (if not all) I have both worked within corporations and bought things from them (how many times a day?), and have fought occasional battles and at other times felt robbed, frustrated, and complete unsatisfied.  I have seen terrible behavior inside companies and I have had great experiences, but the bad experiences were more prevalent and affected a lot more people.  In fact, some companies seem to never fail, never succeed, and instead muddle through time generating misery for employees, customers, suppliers, and anyone else involved.  It was those experiences that moved me to observe and think about why organizations behave badly when tiny local proprietorships can be so friendly and easy to deal with, and how and why the change might take place over time.  I recognize that few companies grow from small to large any more because successful small companies are usually bought by larger competitors and absorbed before they become giants, unless they have such amazing success that they can do the acquiring.

My big complaint with corporations is ... I can rarely trust them. After decades of observation and study, a top rank business school MBA, and working in about five careers in eleven companies ranging from a half dozen to nearly 350,000 employees, I have a theory as to how companies evolve from small startups to global corporations and go from customer-friendly and reliable to predatory and untrustworthy.  The conduct of corporations is rooted in the relatively normal actions and motivations of relatively normal people.  Corporate behavior is all based in human nature, as you might expect, but it changes greatly from the founding of a small company through when it reaches ascendancy as a multinational corporation.  So how does this huge turnaround in behavior come about?

Annual Performance Reviews Do More Harm than Good

An NPR story today on a new book reminded me how little value there is in annual performance reviews.  In most cases the annual performance reviews I’ve witnessed, carried out, or been subjected to have produced more demotivation and outright anger than positive value.  I can think of a couple of examples:

Pay for Performance Revisited – It Still Has Problems

Pay for performance sounds good, until you think about it. I added a comment to an item on HRM Today this week suggesting “pay for performance” may not be the best way to manage people’s compensation.  This is a complex area and sometimes what seems simply intuitive turns out to be a poor approach under closer examination.