What Does Caring have to do with a Successful Business Culture?

This is a rewrite of an unpublished article I wrote in 1994, when many businesses had recognized the importance of their internal culture and its impact on their business.  I believe the principles still hold, though the understanding of culture and how to create lasting business success seems to have slipped in the intervening years, at least in the United States.

Where were we going in the TQM era?

The intent of the Total Quality Management (TQM) cultural change effort of the late 20^th century was to achieve maximum organizational effectiveness, meaning maximally effective people.  To be highly effective, people must be deeply committed.  This requires that people care about their work, employer, coworkers, etc., for they will only be committed if they care about what they are doing and whom they are doing it for.  Fortunately, people have a natural tendency to care about their work.  The sense of accomplishment available through work gives people reason to feel better about themselves, and makes caring and contributing possible and even pleasurable.  The positive self-image that arises in this kind of environment is a far more powerful motivator than any externally applied influence and results in far higher quality of work.  By comparison, fear is also a powerful motivator, but its effects are detrimental to the quality of work produced in many ways, and they all increase cost without a matching increase in value.  But how are business systems involved?

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

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?

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?

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:

When and Why Does Total Quality Management Work, and Why Isn’t It Still Prevalent?

Total Quality Management, or TQM, was prevalent in business thinking in the 1980s, and improved the work lives and productivity of many people as well as the fortunes of some major corporations in that era.  I won’t try to describe how to implement Total Quality Management here, as there are a great many publications on the topic. I will instead describe the most important and fundamental elements I believe an organization needs to achieve the full benefits of TQM, and discuss why I think it fell into disuse.