The success stories of total quality management (TQM) are well known. They include such companies as Xerox, Allen-Bradley, Motorola, Marriott, Harley-Davidson, Ford, and Hewlett-Packard. These companies committed themselves wholeheartedly to TQM; they made fundamental changes in their management practices and philosophies and improved product quality and company performance.
But more often, companies that have tried to implement TQM have not achieved such dramatic benefits. They may have produced some tangible improvements in product and service quality, but the quality improvement programs ultimately fell apart. In many of these companies, the TQM programs lost momentum because disagreements over goals and implementation procedures surfaced, upper-level managers turned their attention to other priorities, and employees became increasingly skeptical about organizational commitment to the programs. In other companies, quality programs clashed resoundingly with other strategic initiatives.
Consider the case of Kodak. In 1983 and 1984, Kodak embarked on a companywide quality campaign in response to increased competition, high silver prices, and an overvalued dollar. The company’s “corporate policy quality statement” committed Kodak “to be world leader in the quality of its products and services. We will judge this quality by how well we anticipate and satisfy customer needs.”1 During the next few years, Kodak trained employees in statistical techniques, held annual worldwide quality conferences, involved top management in quality programs, disseminated reports of quality improvement experiences throughout the company, and required managers to formulate personal quality improvement projects.
Yet despite considerable improvements in operational and competitive performance, Kodak’s disappointing financial performance led to increased pressure for more drastic corporate restructuring. During the 1990s, top management became increasingly confused by the dilemma of managing continuous, incremental improvement while making radical, top-down change. A $1.6 billion restructuring in 1991 incurred massive early-retirement costs but did little to yield longer-term savings in operating costs. In January 1993, Kodak appointed Christopher Steffen from Honeywell as chief financial officer in order to enhance shareholder value through more aggressive financial controls. Conflict between Steffen and Kodak’s CEO, Kay Whitmore, led to Steffen’s departure after eleven weeks, only to be followed by Whitmore’s departure in August. Underlying the top management discord at Kodak is the conflict between two unreconcilable approaches to change management.
The recent histories of Alcoa and McDonnell Douglas point to similar conflicts.