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Re-engineering and TQM: Approaches to Organizational Change told as a "Tale of Three Villages"

David Chaudron, PhD
The chiefs of three villages each set out to build a bridge across a wide chasm. If they could build this bridge, the trade that came would enrich the lives of villagers for generations to come. The first chief told his workers, "Go forth and work. Do whatever is necessary to build that bridge." The villagers established a frenzied pace, for this chief abused those workers who did not follow his commands. The first chief boasted to the other two leaders about the speed of his construction. Unfortunately, because no one coordinated these worker's efforts, the bridge was a haphazard collection of nails and boards. It soon collapsed.

The second chief was watching this mess and decided to learn from the first chief's mistakes. She organized her workers into teams, and gave them a plan to build a bridge. At first, these workers had success, and built the bridge straight as an arrow far over the chasm. She boasted to the two other chiefs about the accomplishments of her workers. Unfortunately, the the next major storm destroyed the bridge for the chief did not know how to build structural supports. Her workers became discouraged and abandoned their efforts.

The third chief was watching their efforts and decided to learn from the other chiefs' mistakes. He sent his workers to the other villages to learn what they had done, and what they hadn't done. His workers then developed a plan. In their first step, they did not build the bridge at all, but focused on creating the support columns they would need. When they completed this task, they rapidly finished the bridge.

Many organizations are like the first village in implementing Total Quality Management (TQM). They start with vague directives with little clarity on what to do. Their successes are sporadic and likely to fail. Other organizations are like the second village, and become victims of their own success. Their initial quality improvement teams may be so successful they rapidly create more teams, without the qualitative organization-wide changes necessary to sustain a permanent effort. Some of these changes are obvious, in that companies must facilitate, recognize and encourage these teams. However, other qualitative changes (described below) also may be necessary. If these changes are not made, the TQM movement risks running into the same troubles that enfeebled the quality circles of the 1970's and 80's. (See "Quality Circles after the Fad" by Edward Lawler III in the Harvard Business Review, January-February 1985, and several recent articles in the Wall Street Journal).


Incremental Approaches

The first two villages used "incremental" approaches to TQM: They deal with technical problems the organization faces one at a time, without reviewing or changing any underlying "systems" issues, such as performance appraisal, profit sharing vs individual compensation, and organizational structure. Incremental approaches work best when senior management is unwilling to deal with these systems issues, when lower-level employees wish to experiment with TQM without senior management support, or when many in management are ambivalent towards TQM. Organizations can use approaches in "stealth" mode, where several quality improvement teams are quietly working without senior management's acknowledgement. These approaches are good for picking "low-lying fruit", (solving easy problems.) Incremental approaches can easily collapse when TQM "champions" leave the organization.


Incremental Change: variation one

Option one is one of the most frequently used models in implementing TQM, and perhaps the most wasteful of time and effort. Using this approach, every one in the company or a designated unit receives massive training (40-100 hours) in TQM, Statistical Process Control (SPC) and meeting management. After this training, employees in many are on their own.
In addition, because management does not tie training to implementation, natural work groups (people directly reporting to the same person), and cross-functional teams end up with only some of their members trained. Many people wait months before they used the training they were given.
The net result of this option is the loss of employee time due to too much training being given, employees feeling confused about the company's direction, and frustration at not using the training they received. Whatever success these teams are limited by the structural barriers the company has, that is compensation, organizational structure, performance appraisal, etc.


Incremental Change: variation two

Option two emphasizes 1) defining the company's goals and objectives, 2) selecting quality improvement projects tied to those goals, 3) training only the members of the process improvement team with just enough training, just before they use it, and 4) providing on-going support of each team's efforts.

The result of using option two is a more sharply defined effort than in option 1, with a much greater chance that the quality improvement team's efforts will directly relate to the company's quality goals, and a greater sense of accomplishment among team members.

As with option one, these teams' successes will be limited by the structural barriers the company has, i.e., compensation, organizational structure, performance appraisal, etc.


The Structural (Re-engineering) Approach

The structural approach to implementing TQM deals initially and directly with the systems barriers described above. Other names for this approach include organizational design and the "socio-technical" approach. Using this approach, senior management forms a steering committee, who then designate a design team made of a diagonal slice of the company. This design team then assesses the company's culture, systems and environment, and develops recommendations for the steering committee. Such recommendations can include self-directed work teams, profit-based pay, pay for knowledge, and reorganizing the company away from the "functional stovepipes" of manufacturing, engineering, sales and service, towards a more product, customer or geographically based orientation.

The chief advantages to this approach are 1) dealing with major issues up-front, rather than avoiding them, 2) changing aspects of the company that will have a substantial effect on productivity, and 3) demonstrating that management is serious about quality.

Disadvantages include the need to be open and honest with employees from the beginning (if that is a disadvantage), and dealing head-on with issues that many in management may have trouble changing: their own management style, their own pay, and their own power.

Choosing between Re-engineering & TQM (Total Quality Management)
Elements of TQM (Total Quality Management)
Evaluating your Total Quality Effort