Lessons from the veterans of TQM. (companies that successfully applied total quality management)

BY FOCUSING ON KEY BUSINESS PROCESSES, COMPANIES ARE DISCOVERING BOTTOMLINE BENEFITS

For the past two months, Canada's business community has been abuzz with the success stories hailed at the Canada Awards for Business Excellence. These were successes worth underlining and celebrating.

But what about the untold stories: the failed attempts, the false starts, the stalled change initiatives? In a 1991 Electronic Business survey, only 13 per cent of CEOs surveyed said that their quality efforts paid off in higher operating income or higher profits. A study of British industry by TQM Magazine and A.T. Kearney concluded that 80 per cent of Total Quality Management (TQM) initiatives ultimately fail.

A similar A.T. Kearney study of Canadian TQM efforts concluded that while 80 per cent of companies had total quality processes in place or were planning their implementation, only one-third of those companies with processes in place had tangible results such as improved market share, lower production cost, documented improvement in customer satisfaction or higher profitability. to show for their efforts. Surprisingly, despite the paucity of tangible results, more than two-thirds of these same companies considered their TQM program to be successful!

That three-quarters of Canadian companies should be either nurturing or planning quality initiatives is not surprising. The fact that they do so when so few current efforts produce any tangible benefits leads one to wonder why. Have they simply not found the right mix for their business or are they incurable optimists attempting an impossible task?

And what about those companies that have succeeded in sustaining quality initiatives over many years? What can companies whose quality efforts are wavering learn from them?

A year ago, A.T. Kearney set out to …