Why Total Quality Programs Do Not Persist:

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Why Total Quality Programs Do Not Persist
October 8, 2008

• The Role of Management Quality

Michael Beer Professor - Harvard Business
School Chairman - TruePoint
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Why Dont TQM Programs Persist or Fail?
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The quality program was very political everybody
noticed who participated and who didnt. Any
problems we had in implementing it had to be
swept under the rug. All management wanted to
know was how many teams had been formed and how
much money they had saved.
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If you vocalize and you beat the drum and you
talk about total quality to a mass of people who
arent going to see it, who arent going to be
involved in it, they get a tin ear. It sounds
wrong. People say what are you doing? Why are
they waiting? We dont see anything. They are
wasting all that money doing all these things,
but we dont see anything.
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TQM Failures are a function of

• Poor change management
• Poor quality of management
• An Ineffective organization

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A Torrent of Ideas and Solutions
Quick Fix Programs and Initiatives Fail
Globalization. Information Technology. Total
Quality. Benchmarking. Best Practices.Customer
Focused. Micromarketing. Outsourcing. Flexible
Manufacturing. Value Creation. Core Competence.
Partnering. Competitive Advantage. Networks.
Strategic Alliances. Delaying. Information.
Revitalization. Computer-aided Design.
Concurrent Engineering. Computer-aided
Engineering Mission. Cross-functional Teams. The
New Organization. Diversity. Empowerment. The
Information Organization. The Hybrid
Organization. Knowledge. The Shamrock
Organization. Restructuring. Strategic Stretch
and Leverage. The Post-Modern Organization. The
Cyclical Organization. The Spider-Web
Organization. The Post-Industrial Organization.
The Turbulent Organization. The Chaotic
Organization.
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Programmatic Change leads to Staff Push
Improvement Demands
Unclear or conflicting expectations
Staff Support
Staff Driven Improvement Programs
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Why TQM Change Program Fail

• They introduce technical knowledge but that does
  not change orgnaizational behavior and culture
• Staff groups distant from the business typically
  drive programs
• Focus on activities not results
• They go around sub-unit leaders who know the
  business
• Do not enable sub-unit managers to learn to lead
  change in their organizational culture
• business
• Management practices and organizational
  arrangements
• A gap develops between rhetoric and reality top
  management become consumers of own rhetoric and
  over claim success
• Creates Cynicism our leaders do not walk to
  talk
• Inoculates the organization against learning and
  change
• Do not encourage an organizational conversation
  and learning about real underlying problems

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Programs Often Arise From A Tacit Collusion that
Avoid Undiscussible Issues
Short term Benefits
Long Term Costs
For executives The appearance of quick,
painless, measurable results

• Lost time, energy dollars
• Increased cynicism
• Change inoculation
• No Learning

For Consultants A steady income stream
For Internal Staff Increased responsibility
visibility
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Its not the seed that matters, its the soil
The term (TQM) is counterproductive. My work is
about transformation management and about the
profound knowledge needed for the transformation.
Total quality stops people from
thinking. W. Edward Deming A
founder of TQM movement
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The Silent Killers
Undiscussible Barriers to Effectiveness

• Unclear strategy, values and conflicting
  priorities
• Leadership style - tops down or laissez faire
• An Ineffective top team
• Poor coordination
• Closed vertical communication
• Inadequate leadership/management skills and
  development in organization

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The Dynamics of an Ineffective and
Underperforming Organization
Top-down or laissez fairesenior management
Style
Ineffective top team
Quality of direction
Unclear strategy, values and priorities
Closed Vertical Communication
Quality of learning
Quality of learning
Inadequate down-the-line leadership skills
and development
Poor horizontal coordination
Quality of implementation
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The Silent Killers Exist at Every level
Adapted from the Beer et al. The Critical Path
to Corporate Renewal
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The Leaders Dilemma Keep Driving Harder From
the Top or Begin to Engage to Understand Why
There is So Much Drag
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Potential Responses to Silent Killers

• Avoidance
• Replacement
• Engagement
• Make silent killers discussible in each unit
• Develop them into strengths
• Change how you organize and manage

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Honest Collective Public Conversations Can Impro
ve the Quality of Management and Provide Honest
Conversations About TQM Effectiveness
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Honest Conversations Align Management's
Intentions with Living Breathing Organization
Reality
Stated Objectives, Strategies, Plans Values
Managements Intentions
Honest Conversations Increased Congruence
External reality -Individual behaviors -
Collective actions Performance Outcomes
ManagementLeversFormal systems structures,
processes meetings
Organizational Reality
Internal reality Individuals mindsets, emotions,
values identities
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The Strategic Fitness Process A disciplined
process for Realigning an Organizations Design
and Behavior
Senior Leadership Team
Fitness Task Force
Broader Organization
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The Fishbowl A Structure that Enables Truth
to Speak to Power
Senior Team
Task Force
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The Strategic Fitness Process A Means for
Improviving the Quality of Management
Define strategic andorganizational direction
Diagnose the system
Redesign org. develop change plan
Revise org. design change plan
Senior team
Task Force is trained to interview and selects
100 to be interviewed
Report unvarnished truth to senior team
Confirm/ challenge agenda
Fitness task force
Meeting with 100 to mobilize organization
Interviews re StrengthsBarriers
Broader organization
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Principles for Honest Organization-Wide
Conversations

• Focus on objectives, values and strategy

• Iterate between advocacy and inquiry

• Make them collective and public

• Make them safe do not threaten careers

• Structure them

• Use as active organization development tool,
  not survey

• Recycle them periodically

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Managerial Capabilities Needed for Successful
Implementation of TQM

• Capacity of senior team to develop a clear view
  of why TQM should be adopted?
• How does it support strategy?
• Capability of senior team to follow up commitment
  with changes in orgnaizational arrangements
• Develop process focused teams
• Change basis for evaluating performance
• Down the line leaders who will be change agents
  and teachers
• Capacity of senior team to create honest,
  collective and public conversations about
  effectiveness of TQM
• Create these capabilities in all key
  semi-autonomous sub-units of the organization

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Honest Conversation are Means for Continuous
Change and Improvement in the Quality of
Leadership Management
Define direction

• Levels
• Corporation
• Business unit
• Process
• Function
• Team

Take action and assess outcomes
Unvarnished feedback on gaps vs. current reality
Honest Conversations that Matter
Develop action plan to address gaps
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Honest Conversation Can Create High Management
Quality
Leaders that Advocate and Inquire
Top Team that sets direction, allocates resources
and resolves conflicts
Quality of Direction
Clear and Compelling Strategic and Organizational
Direction
Honest Vertical Communication
Quality of
Learning
Effective Coordination Across Functions and
Businesses around strategic tasks
Large number of Managers capable of leading
cross-business initiatives
Quality of implementation
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What Leaders Senior Teams Must Do and Be to
Lead Change DO BE

• Advocate a direction

• Requires will to lead

• Inquire into the quality of the direction
  and barriers to implementing that direction

• Requires will and skills to receive feedback

• Help the organization confront and resolve
  tensions

• Requires readiness to engage in
  conversations that matter-
• constructive conflict

• Design an aligned organization

• Requires systems perspective and design
  skills

• Requires going beyond great man model of
  leadership

• Develop a partnership with employees

• Lead Learning and learn to lead

• Requires courage to be vulnerable and learn

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Where the Strategic Fitness Process Has Been
Applied Successfully

• In over 200 units of 25 corporations in many
  different industries
• Technology sector
• Pharmaceutical industry
• Manufacturing
• Retail and hospitality industry
• Privatized government agency
• Financial services
• In the U.S., Latin America, Europe (Sweden),
  Korea, Japan
• Sample Companies
• Hewlett Packard
• Agilent Technologies
• Merck
• Becton Dickinson
• Comcast
• Whitbread plc
• Cardo
• Ericsson

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Honest Conversations Create Fundamental Change

• From Hold to Buy
• Dramatic change in performance commitment

1990 - 2006
Becton Dickinson

• Profit increase by 6X
• From worst performing division to top performing
  division

Hewlett Packard Div.
1994-1999
Merck Latin America
1996-2003

• Transformation in business organization,
  processes and culture across 10 countries
• 20 compounded annual growth

Mattel Canada
1998-2003

• From poor to outstanding coordination across
  functions
• From least profitable international unit to most
  profitable

• Transformation from bureaucratic silo
  organization to team based matrix focused on
  several businesses
• Effectiveness and commitment improved.

Ericsson (Sabb)
2004 - 2007
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What can you do to improve TQM in your company?