Total Quality Management Guide: Core Principles of TQM

What does World War II have to do with contemporary business management? More than you might think. In the aftermath of the war, Japan needed a way to repair its tattered economy. The country’s government and business leaders directed their attention to the manufacturing sector. There, it began applying principles from American management consultants and statisticians like W. Edwards Deming and Joseph M. Juran. Deming and Juran were modestly influential in their own country, but their ideas became foundational to the Japanese way of doing business.

As Japanese business leaders embraced Deming and Juran’s philosophies, they created a management approach called total quality management (TQM). TQM principles, which center around continual improvement and total employee involvement, gave Japanese businesses a competitive advantage in the post-war economy. By the 1980s, many European and American businesses had pursued TQM initiatives of their own, having witnessed their role in rebuilding Japan’s business sector.

The TQM approach endures in modern quality control. As a business owner or manager, you can implement total quality management systems throughout your organization. Here’s a primer on TQM, its key concepts, and ways to leverage it for organizational development.

What is total quality management?

Total quality management (TQM) is a strategic and systematic approach to business operations that emphasizes a commitment to continuous improvement in all aspects of a company’s work. All employees, from top management to frontline workers, actively strive to improve quality standards in everything the organization touches, including its work processes, products, and services.

TQM processes rely heavily on hard data and systematic approaches to achieve organizational excellence and minimize errors. TQM also emphasizes sticking to an established plan. Should the plan not work, it encourages improving processes across the organization rather than having some workers take a freelance approach to their work.

The core principles of total quality management

The core principles of total quality management emphasize a systematic, company-wide approach to continuous improvement. Every initiative should be an organization-wide effort putting customers first and modifying internal processes as needed. Here are some of TQM’s key principles:

• Customer focus. Addressing customer needs and inviting customer input are integral to every core component of TQM; therefore, customer satisfaction is one way a company can measure its long-term success.
• Total employee involvement. Leadership must empower all employees, from the CEO to frontline workers, and provide them with the training and tools they need to implement total quality control.
• Process-centered approach. TQM focuses on improving the processes used to create a product or service, rather than just inspecting the final output.
• Integrated quality management systems. A company not only scrutinizes every area of its business—from brainstorming to supply chain management—for opportunities for improvement, it also puts systems in place for these quality checks.
• Core mission that incorporates quality assurance. In an organization using TQM, the standards for its product quality and service quality are core elements of the company’s mission statement to ensure all staff members are on the same page.
• Data-driven decision-making. TQM relies on quantifiable metrics—not gut instinct—to make decisions. Managers adjust internal processes based on performance data and a root cause analysis.
• Effective communication. TQM systems need effective, open communication channels to work. Workers must be able to easily communicate their observations and suggestions to management so the organization can quickly address quality-related issues.
• Continuous improvement. In the TQM model, quality improvement is not an occasional checkpoint but rather an everyday necessity. Processes are continually analyzed and adjusted in an ongoing cycle of refinement.

How to implement total quality management

1. Define your core values
2. Determine who your business serves
3. Collect feedback from core customers
4. Identify critical success factors (CSFs)
5. Form cross-functional teams
6. Develop an improvement plan
7. Define key metrics to track
8. Implement your plan and track progress

Implementing TQM starts with the mindset that quality management is something you do consistently. TQM focuses on a continuous, adjustable cycle of improvement to keep up with customers’ requirements. Here are the basic steps to implementing TQM:

1. Define your core values

Companies who successfully leverage TQM have customer satisfaction embedded in the very fabric of their organizations. Whether you’re starting a new business from scratch or revamping an existing company, your vision should reflect a long-term commitment to quality. Your mission statement should outline how you will achieve your quality commitment. Your values should guide every employee’s behavior toward this goal. All other company goals, from innovation to revenue growth, stem from this core value of customer satisfaction.

2. Determine who your business serves

To create products and services matching customer expectations, you need to have a clear sense of the specific customers your business will serve. Create ideal customer profiles describing the type of people who will buy your goods and services. Identify your key customer segments and prioritize them based on their value to your business. These initial steps will help you focus your efforts where they will have the greatest impact.

3. Collect feedback from core customers

Once you know who your customers are, you need to understand their expectations. Implement various methods to collect direct feedback, such as surveys, interviews, focus groups, and customer service data.

Learn about their needs, their pain points, and how existing businesses are already serving them—or failing to serve them. In TQM, you measure quality improvement by the number of satisfied customers you have. If your customers aren’t happy, your business must adjust its strategic plan.

4. Identify critical success factors (CSFs)

Based on the feedback you’ve collected, identify the areas where your business must excel to satisfy your customers. These are your critical success factors (CSFs). For an ecommerce clothing store, CSFs might include product selection and shipping speed. For a 3D printing company with a B2B (business-to-business) focus, CSFs might center on the ability to provide on-demand products that can accommodate custom designs.

5. Form cross-functional teams

TQM requires total employee involvement. Form teams with members from different departments (e.g., marketing, production, sales) to work on specific improvement projects. This breaks down departmental silos and ensures everyone is invested in the workflow.

It also leverages the strengths of skilled workers from all corners of your organization, creating the proverbial whole that’s greater than the sum of its parts. Each team should have a clearly designated leader.

6. Develop an improvement plan

Based on the data you’ve collected, the areas you’ve identified for improvement, and the teams you’ve formed, instruct each team to develop a clear, actionable plan. This plan should identify the process or processes the team wants to improve. It should include specific steps, assigned responsibilities, the necessary budget and resources, and a timeline for completion.

Having a written plan will keep team members organized and coordinated. Each team leader will own their team’s plan or assign a plan owner. This person is responsible for keeping the plan updated and documenting revisions as necessary.

7. Define key metrics to track

TQM requires a fact-based approach. Define specific, measurable key performance indicators (KPIs) for each of your CSFs. The ecommerce clothing retailer might track average shipping speed or customer satisfaction scores. The B2B 3D printer might track the percentage of project requests it can accept—a measure of its versatility and the breadth of its machinery’s capabilities.

Once you’ve identified your KPIs, set up systems to consistently track the relevant data for each indicator. For example, you might build KPI dashboards and designate specific team members to manage them. Also, add these KPIs to your written action plan.

8. Implement your plan and track progress

It’s now time to implement your plans. Make sure that all team members are properly trained for their duties, whether that’s frontline workers implementing new customer service techniques or steering committees evaluating KPIs and measuring success. This sets you up to tackle immediate process issues whenever they pop up.

Regularly review the progress of your TQM initiatives. Teams should report their findings to management and relevant stakeholders throughout the company. Based on the results, make adjustments to the plan, fine-tuning your approach for better results.

TQM is a continuous cycle. After one improvement project is complete according to the key metrics you decided to track, return to your customers, collect new feedback, and begin the cycle again. This ensures your business is always learning, adapting, and striving for excellence. It will help your stakeholders hold true to the company’s core values, and it will help the business remain competitive in an ever-changing customer environment.