CXO

'Value' replaces 'quality' in latest management strategy

TQM has helped many companies improve the quality of their product or service, but now a new management strategy, Total Value Management, takes TQM a step further. Learn the tenets of TVM and how it helps companies focus on long-term process improvement.


By Rich Kay

Total Quality Management (TQM) grew from the teachings of Dr. W. Edwards Deming during the industrial era just after World War II. Deming is credited for using his TQM theories to help Japan reestablish its industrial-based economy—work for which the Japanese so revered Dr. Deming that they created the annual "Deming Prize" to recognize companies that applied his principles and showed improvement in the quality of their product or service.

In the late 1980s, America saw the need to increase the quality experience, both in product and service, for customers. Enter Dr. Deming's TQM. From TQM, flowed Deming's 14 Points: Obligations of management, the seven deadly diseases, and the system of profound knowledge. These elements, when applied, constituted an organizational development intervention purported to increase the quality of a product or service produced by an organization through continuous process improvement. Quality was defined by the customer, and other stakeholders were involved in defining quality as well as playing a part in shaping the vision and strategy of the organization.

Quality meant different things to different stakeholders. It was a great departure from the Henry Ford days of, “You can have any color car you want, as long as it is black.” By actively involving all stakeholders, quality was continuously refined to provide what the customer wanted or desired.

Does TQM work? Having implemented a TQM project in a service organization and having watched it flourish in many other organizations, I can unequivocally say yes. Was it easy? Not a bit. However, I also saw it cannibalized in other organizations. As with any organizational development intervention, it must be sustained from the top down and recognized from the bottom up by forming a critical mass of supporters.
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The next phase of management
Now Total Value Management (TVM) has hit the scene. In Michael Wood's article on TVM, he describes this new approach this way.

"TVM implies that an organization must look to the long-term implications of its actions. It means that its focus must be on sustainable growth, not short-term stock price pressures. It means that it must allow strategic partners and employees to prosper. It means that customers must be provided a superior experience with each interaction and transaction."

If you had the opportunity to work with TQM over the years, you will see a great similarity between TQM and TVM. While value is inherent in quality, I believe TVM begins to capitalize on our familiarity with and past implementations of the TQM philosophy to provide a quality product or service.

I think most importantly, TVM stretches our thinking a little further and places more emphasis on the stakeholder element—i.e., customers, vendors/suppliers, community, shareholders, employees, etc.—and balance we should strive to achieve to ensure longevity, with the key being balance. Stakeholder needs analysis is not a static one-time event but a continual quest for ongoing process improvement.

So don't throw away your TQM books but rather use them as a foundation to launch TVM.

Rich Kay is an organizational development practitioner, project manager, entrepreneur, and educator. Rich has been a strong proponent and change agent of countless process improvement initiatives.

Original publication on gantthead: Aug. 15, 2001.


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Related downloads: "Process Improvement Project Initiation Report" "Process Improvement Project Plan" "Project Management Process Improvement Plan" "Business Process Improvement Plan" Related content: Process Improvement Department "Total Value Management" by Michael R. Wood "What Is a Process Improvement Methodology Anyway?" by Michael R. Wood "A Cure for Turnover and Loss of Process Knowledge?" by Rich Kay "I Forgot: What Are We Here for Again?—Deadly Disease #1: Lack of Constancy of Purpose" by Rich Kay NOTE: Items in bold are available only to gantthead premium members.

 

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