Managing continuous improvement and culture change.

American industry today is facing its most serious challenge since the 1930s. There is a revolution in the air. Ferocious international competition and constantly changing technologies are forcing the transformation of our industrial organizations. The traditional division of labor in industry is obsolete; to deliver better products at lower cost in less time requires that we change the way we do work.

This article argues that total quality management (TQM) is a powerful and compelling vision of how we should be doing our work. But it is not a complete road map. It does not tell us how to change the existing culture of industrial organizations.

Culture change is virtually inevitable when introducing quality principles into a corporation. This is because TQM represents a new cultural system, one that often clashes with the traditional culture of American work organizations. Yet, many quality programs fail to recognize and deal with cultural change and, as a result, they are not effective in guiding the change process. This article examines the clash of two cultures that often unfold as TQM is implemented.

The Challenge of TQM

Although TQM programs differ in detail (depending on which quality guru you follow), many have several features in common, including: the program is organizationwide and often has direct involvement from senior management (i.e., these are top-down programs); they are based on an off-the-shelf formula or standardized method for improving quality; they usually rely heavily on education and training as the stimulus for change; and they require a plethora of special activities (meetings, committees and reports) that keeps everyone busy.

TQM programs such as these have drawn criticism recently from both the practitioner and academic communities. The charge was led by Michael Beer and his colleagues who presented data from a four-year Harvard study of transformational change programs (including TQM) in several large American corporations.

In this study, researchers and employees independently ranked the companies' improvement in interfunctional coordination, decision-making, work organization and concern for people on a scale of 1 to 5. As it turned out, the worst performers were the firms with the biggest and most elaborate transformational change programs. The clear leader had no such program in place, but had instead been revitalized by a series of bottom-up changes initiated by line managers.

Since the publication of this piece, other articles have confirmed Beer's observations using independent data sources. For example, Business Week recently reported results of an Arthur D. Little study of TQM in 500 American corporations; only 36% of the firms felt that it significantly improved competitiveness.

To what do we attribute the anomaly discovered by Beer--that the biggest change programs seem to be least effective in generating change? The main criticism lodged against TQM and other top-down programs by Beer and others is that they are not results-driven. Top-down change programs usually are too large and diffused to guide specific change at the level of day-to-day operations, which is where change must take place if we are to see real improvement.

Because they are disconnected from results, there is little opportunity to test the efficacy of various TQM methodologies or approaches; people must accept their validity on faith. The faithful seem to believe that if they carefully perform certain TQM activities (such as training) according to a guru's cookbook, then their organization will improve, almost as if by magic!

The gurus tell the organizations that they must be patient and wait a long time for change, so the organization may go on drifting for months, often while things continue to get worse.

While I agree with many of these observations based on my own experience, I believe there is more to the difficulty of implementing quality principles than Beer has pointed out. Quality is difficult to implement because it represents a profound culture change that clashes in many ways with U.S. industrial culture, and most TQM programs misunderstand the nature of culture and the process of culture change.

The Nature of Culture

Culture can be defined as a set of shared assumptions, beliefs and values that are linked to and support a related set of social behaviors, roles and relationships. Our basic assumptions tell us what is true and right about the way the world works and how we should behave in it. A more modern term for this part of culture is paradigm--we each have a paradigm about the way the world works; shared paradigms are a part of culture.

It is important to note that the paradigm is tied to and reinforced by behavior. If we treat people as if they are lazy and can't be trusted, then soon they will respond to our beliefs with behaviors that will reinforce our paradigm. They will not work as hard for us and they will resist our directives.

Another point about culture is that it comes in two basic forms: real and ideal. The real culture is what we really think and really do; the ideal culture is what people think they should think and do. Thus, someone who believes that people are lazy and untrustworthy probably won't admit that because today these beliefs are unacceptable.