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
You don’t have to be an engineer to appreciate this but, if you evry worked in a factory you totally understand this story
A toothpaste factory had a problem: they sometimes shipped empty boxes, without the tube inside. This was due to the way the production line was set up, and people with experience in designing production lines will tell you how difficult it is to have everything happen with timings so precise that every single unit coming out of it is perfect 100% of the time. Small variations in the environment (which can’t be controlled in a cost-effective fashion) mean you must have quality assurance checks smartly distributed across the line so that customers all the way down to the supermarket don’t get pissed off and buy another product instead.
Understanding how important that was, the CEO of the toothpaste factory got the top people in the company together and they decided to start a new project, in which they would hire an external engineering company to solve their empty boxes problem, as their engineering department was already too stretched to take on any extra effort.
The project followed the usual process: budget and project sponsor allocated, RFP, third-parties selected, and six months (and $8 million) later they had a fantastic solution — on time, on budget, high quality and everyone in the project had a great time. They solved the problem by using high-tech precision scales that would sound a bell and flash lights whenever a toothpaste box would weigh less than it should. The line would stop, someone would walk over and yank the defective box out of it, pressing another button when done to re-start the line.
A while later, the CEO decides to have a look at the ROI of the project: amazing results! No empty boxes ever shipped out of the factory after the scales were put in place. Very few customer complaints, and they were gaining market share. “That’s some money well spent!” – he says, before looking closely at the other statistics in the report.
It turns out, the number of defects picked up by the scales was 0 after three weeks of production use. It should’ve been picking up at least a dozen a day, so maybe there was something wrong with the report. He filed a bug against it, and after some investigation, the engineers come back saying the report was actually correct. The scales really weren’t picking up any defects, because all boxes that got to that point in the conveyor belt were good.
Puzzled, the CEO traveled down to the factory, and walks up to the part of the line where the precision scales were installed. A few feet before the scale, there was a $20 desk fan, blowing the empty boxes out of the belt and into a bin.
“Oh, that,” says one of the workers — “one of the guys put it there ’cause he was tired of walking over every time the bell rang.”
This story provides an important lesson. While the $8 million spent for the solution is probably exaggerated, the lesson is clear: If the company trusted and involved employees in identifying and solving problems it could have avoided the huge cost of hiring an outside firm and would be significantly more profitable. Note that stories like this are common in virtually every medium or large-sized business today, though most are not as striking.
Trust is the key. A fundamental requirement of good business is trust, including management trusting employees and vice versa. Trust means management doesn’t have to watch over the employees like a hawk because management understands a fundamental concept of human nature: everyone wants to make a positive difference and feel valued. When management displays trust and provides the help people need to make their jobs and their products better, people will make them better. This is only enhanced when management publicly recognizes group and individual efforts and resulting improvements. Similarly, employees feel better about their jobs and spend less time worrying “around the water cooler” when they trust that management cares and feel like part of the team.
Smart management is the enabler of good work. It is up to management to provide the environment, communications, and tools to make it possible for workers to do the right things for the company, themselves, and society. The employees in the story above wouldn’t have improved the toothpaste production line if they hadn’t known there was a problem. Bringing news of the problem was management’s job. This illustrates that when employees are informed and have the ability to make a positive difference, they will. Still, it is up to management to give workers time to learn about and solve problems as well as the authority to implement solutions (all of which requires trust). Trusted and informed employees, armed with the right training and tools, can solve problems and improve the quality of not just the product, but also working conditions, and do so at the lowest possible cost.
Trust yields other benefits. Employees who feel trusted and empowered enjoy their work more and feel better about themselves and their employer. A trusted workforce will perform better in almost every way than one dominated by a command-and-control, “need-to-know”-oriented, bureaucratic management.
Workforce quality improves in an atmosphere of trust. Trusted employees have lower rates of absenteeism, for example, which is a cost saving and productivity boost to the company. Since stress is a big factor in overall health, and stress levels are lower when there is less uncertainty, trusted and informed employees will be healthier and have less sick days. They are also likely to be more receptive to new ideas and welcome training that will make them more valuable to the company. This works best when management communicates openly and allows involvement of all employees down to the janitors in addressing important business challenges.
Trust breeds higher efficiency. When management trusts employees managers can spend more time on important issues and let subordinates make more decisions, recognizing that they will come to management with their needs only when they need help, and the rest of the time will solve day-to-day issues quickly and efficiently. When skip-level communications can occur without worry or political risk, a manager does not feel the need to impose herself/himself as a communications “gatekeeper” to avoid ending up “out of the loop.” The manager can also give more freedom to employees, who can be confident that they won’t be second-guessed or overridden by their superiors, and that their superiors will be reasonable and fair with them.
Trust breeds loyalty. Trusted employees are also far more willing to put out extra effort when needed, not fearing that they will be taken advantage of, and are far more likely to protect their employer’s interests if a risk of a leak of sensitive information to a competitor might arise. A trusting atmosphere in a company makes it a desirable place to work and helps it to attract the best workers.
Trust breeds creativity and innovation. When employees feel trusted to solve problems and improve their work, and are encouraged to collaborate and work together as a team, they also feel free to investigate and try new things. Those “things” can result in new products, new methods, and even the opening of new markets. All of these factors enable the company to grow and be more profitable, and outperform its competitors.
Can a trusting environment be maintained in only one part of an organization? Generally trust in an organization must come from the top to produce maximum benefits. If the CEO does not trust, their subordinates and everyone down through the organization will also learn not to trust. In such a case, an individual department or division manager may be able to establish a positive and trusting environment for their employees, but they will have to fight the prevailing corporate culture almost daily and in many ways to sustain it. This requires extra conviction and effort that will be hard to sustain over the long term. Peer managers will often not understand and may think the trusting manager is a fool, even though a department with a trusting environment will exhibit superior productivity and higher product quality. Superiors may fail to understand and be uncomfortable with the manager who bucks the prevailing culture. Superiors will need to be shown the improved results, if such can be done, and even then may fail to understand the dynamic behind the results. At best they may only be content to let the trusting manager continue since the better results reflect positively on them.
When trust doesn’t come from the top it’s extremely hard to sustain a high-performing group. Eventually, in my experience, the trusting manager in a non-trusting organization will burn out. The battles with peer managers over policy and direction of employees, the need to justify being different to superiors, and the stress of being different will overwhelm the greater sense of satisfaction that comes with managing a loyal, high performing team. In such a case the trusting manager may leave the company or management position for their own peace of mind or even health, and the department will settle back to operating like the rest of the company.
People can learn – the story of a manager’s conversion to TQM.
I worked for years for a manager who at first was quite tough. He made his expectations clear and wasn’t too bad to work for, but there were instances when he would behave in a vindictive way.
I make a political mistake. In one case I was standing with my boss and one of his peers (a manager from another department), and my boss made a misstatement that could have caused problems. I spoke up to correct him as tactfully as possible but I apparently wasn’t tactful enough. A couple of weeks later I was presenting to a couple of dozen employees from my own and other departments when suddenly my boss was asking questions of me, and not just normal questions but questions tinged with a certain “Have you stopped beating your wife yet?” sort of accusatory tone. I was taken aback as my manager essentially “hung me out to dry”, asking more questions in a way that suggested that I didn’t know what I was talking about or had made some serious error. I had expected he would be backing me up on the topic I was speaking on since we had met and agreed to the content of the talk in detail beforehand, but now he was making me look bad in front of a room full of people. I felt shell-shocked by the time I left the meeting, but then remembered that incident in the hallway when I had corrected him, and the connection was suddenly clear. He had been upset that I, a subordinate, had corrected him in front of one of his peers, and this had been his way of punishing me. I was angry, to say the least, but didn’t feel there was anything I could do. It was clear my boss didn’t feel he could trust me and even felt threatened by me.
Calmly sticking to my guns paid dividends, but didn’t make the work better. On another occasion I was meeting with my boss in his office and I asked a tough question he apparently didn’t want to answer. Instead of giving me an answer he got visibly upset with me and changed the topic to one where he could put pressure on me. I had been in counseling for work-related stress, and had learned the value of staying extremely calm in such situations, so I tensed and relaxed my leg muscles under the table, took a deep breath, and stayed calm and collected. When possible, I brought my question up again – it needed an answer for me to do an important piece of work. Again my boss, now raising his voice, went off in another direction, avoiding my question. When he reached a stopping point and it seemed appropriate, I again asked my question, and this time he nearly flew off the handle. When he stopped again – this time he had actually been yelling at me – I explained in a very calm voice that I would need an answer to that question to finish important work, and I hoped he could get back to me with an answer soon so I could get the work done on schedule. Then I excused myself and left his office. While he never got so upset with me again, he did treat me with more respect after that. Still, the organization’s culture and management style continued to not permit people to do their best work and to drive a lot of needless waste into day-to-day business.
Enter the Deming Library of video lectures. At about the same time I was exploring the little-used company library and found shelves full of business training videos, among which were almost an entire set of the Deming Library as well as video lectures by Joseph Juran, Philip Crosby, Tom Peters, and other business gurus of the day. I checked out one of the Deming videos and watched it in an empty conference room on my lunch break. I found it so profoundly illuminating that I told my coworkers and, when I watched the next video, several of them joined me. Over the succeeding weeks a number of us watched the whole series, and some of the other videos in the library, too. We discussed what we were learning and it was obvious that our company could benefit greatly from implementation of some of the concepts.
My boss joined us to see what was going on. Before long my boss got wind of our lunchtime meetings and began joining us, and he also found the material informative and even inspiring. Within a couple of months he was trusting us to try implementing some of what we were learning in our day-to-day operations, and letting us have a department meeting every Friday morning to bring in problems and organize efforts to solve them. The results were good, problems were solved, and people started feeling better about their work. Communications were more efficient, too, as we stopped worrying so much about “going through channels” and just moved information around as efficiently as possible, keeping our boss up to date in a weekly meeting if not via direct contact or other means. Our boss came out of his office a lot more and walked around talking to people, keeping in touch with our efforts and providing help, “breaking bureaucratic log jams” when we needed that. Over a period of months the quality and efficiency of our work increased, department costs were driven down, and our boss became happier and increasingly a proponent of TQM and the teachings of Dr. Deming and others. For several years thereafter we were all noticeably happier and more productive, even as our company saw greatly increased competition and a tougher business environment. Everyone was enthusiastic about stepping up to the challenges of the business. It was one of the best times in my entire work life, and that feeling was held by all of us in the department.
Being different is rarely easy. Our boss, however, had to contend with political sniping and backbiting from his peers who failed to understand what he was doing, and had to defend his different style of management to his bosses even though his financial and product quality results were superior to those of his peers. Other managers held to the old model of assuming that an employee, if left to alone, would certainly goof off, for example, and they felt my boss was a fool even while they paradoxically felt threatened by the good results he was achieving. Eventually he became burned out and frustrated from having to fight for his approach to management, and asked to be demoted back to engineer coincident with cross-company cost cutting, layoffs, and a reorganization that radically changed departmental structure.
The company failed to learn from our experience. It was a sad time for all of us as we were dispersed to work under new bosses, almost all of whom hewed to the old ways of the company. Our commitment to the company declined, and the quality of our work probably did as well. Certainly efficiency dropped and costs rose as we found ourselves frequently wondering what management was doing and why, and had to resume more bureaucratic behaviors such as running all communications through our supervisors. We learned a lot and most of us took it with us to other companies as that employer shrank to a shadow of its former self.
Real and lasting improvement must come from the top to be sustainable. I have seen many organizations trying to improve their businesses and change their cultures, but it is extremely hard to do. It is even harder if the change doesn’t have the understanding and support of top management. As in my example, while big improvements can be made, they will be temporary unless the whole organization takes them to heart. The best way I know for that to happen is for the CEO or other top manager to learn the fundamentals behind the desired change and then pass the knowledge on, down the management chain, so that every worker need only ask their immediate superior to learn more about how they can do better and more enjoyable work.
Real improvement is based in understanding fundamental ideas like trust. During the 1980’s many companies tried to implement TQM but few made it stick. Most companies failed to learn one of Dr. Deming’s key lessons: you cannot copy others successfully. You must instead learn the fundamentals and implement them at a philosophical level. A positive and constructive philosophy will inform better company strategy, and the strategy will then drive more efficient and effective tactics and products and lead to better company performance. While this all makes sense, most managers are poorly trained and simply try to replicate management behaviors they’ve seen before or that are common among other company managers.
The TQM era faded away with too few good implementations. In the end, many companies held meetings, talked a lot, organized people into teams (but didn’t always think about what the team was to accomplish), and trained everyone in simple analytical tools which, by themselves, failed to yield enough benefit to keep them in use indefinitely. Very few companies embraced the fundamental principles, the importance of understanding human nature and the drive all healthy people have to do well. TQM principles were condensed into the simple analytical tools which were then described in books and widely touted as keys to corporate success, sold under names such as “Six Sigma” and “Lean” (later combined into “Lean Six Sigma” by some enterprising but clueless exploiter of others’ work).
Quality standards institutionalized in the TQM era were often misunderstood. When ISO9000 standards, among others, became established and governments started demanding certification in order to get their business, many companies took the plunge. Most, however, only saw those standards as a permit to seek business, not as a great opportunity to improve their operations and products. I was an ISO9000 coordinator and later internal auditor for a major multinational corporation, and wrote many procedures and standards for the company. While the procedures and standards had value, it never came close to the value the company could have achieved by implementing fundamental principles such as building trust into the corporate culture.
Quality standards are still frequently misunderstood and poorly implemented. I have worked for a number of companies who trumpet their audit results far and wide: “We passed our ISO audit and got no findings again this time.” I (and any auditor worth their salt) know that you can find an ISO9000 violation on almost anyone’s desk or by asking them a few key questions about how they do their work. The absence of audit findings says the auditors did not look or did not report what they found, and that the company is clueless about the value of such standards and getting little benefit from the work they are doing to implement them. New standards such as CMMI entered over the years, with the added benefit of requiring continuous improvement, but companies are as good at “sliding by” now as they were thirty years ago, and it is lucky if such pursuits do any more than increase cost. Sadly, the potential for gaining real benefit from such standards is rarely realized.
Unfortunately, trust never caught on as a management concept. Perhaps the fundamental concepts taught by Deming and others were too simple or deep to be understood by most. They may have also seemed threatening to old line command-and-control style managers. In general, those companies whose founders and/or top managers were savvy, positive thinkers already had the concept of trust built into the way they operated, and their companies generally did well, especially when you control for external variables such as market and regulatory changes. Most companies operated essentially as before, however, maintaining the mistaken belief that managers’ are to give orders and subordinates are to follow those orders, and that nobody can be depended on for anything more than the most basic functions of the job they have been assigned. Never mind that each employee is always far more than just their job, and most have valuable insights and ideas well beyond the scope of their work from which the company could benefit. The clueless, untrusting manager misses most or all of that, and the company’s performance is usually mediocre as a result. To this day the major business schools fail to teach the fundamental concepts behind business success, of which trust is a key part, and most students never learn the teachings of W. Edwards Deming or his contemporaries.
As always, I welcome your comments — Tim
Out of the Crisis, 1982, W. Edwards Deming, Ph.D. ISBN 0-911379-01-0 (This is the book – if you read NO OTHER book on business and business management, this is the one to read, and gets my highest recommendation!)