Published in:
Quantum Quality
Winter, 1999

The Biggest Mistake Companies Make
When Implementing TQM/Process Improvements

By Willie L. Carter President Quantum Associates, Inc

Over half of all TQM and business process improvement efforts fail. A typical company invests 42 hours per employee per year to develop TQM skills. At a loaded cost of $100 per hour, that is equivalent to $4200 per employee. Multiply that cost by the number of employees in your organization and we see the price of failure is not cheap. If we add the lost productivity and profitability of having those employees away from their jobs in training and team meetings the cost becomes even higher.

". . .fix everything all at once."

Experience has taught me that the number one mistake companies make when implementing business process improvements is "Trying to fix everything all at once."

80/20 Rules Again

20% of your business processes cause 80% of the waste and rework, would it surprise you to learn that less than 4% of these processes cause over 50% of the problems? Why are teams trying to improve everything? Improvement teams of 5-9 employees often spend 40-80 hours solving any given problem. That means you are already investing approximately 200-700 hours in each problem. At a loaded cost of $50 per hour, that means you are spending a minimum of $10,000 on each problem.

Many teams use the quality improvement tools incorrectly and on the wrong problems:

• On the" trivial many"( instead of the "vital few") problems not worth the investment.
• On problems not easily solved using quality improvement tools i.e. morale/ HR problems.
• On the team's pain problem with another department.

Teams spend all this time and finally give up, then management complains that the improvement process doesn't work! Wrong the root cause of the failure was right at the beginning; they chose the wrong problem to solve using this methodology.

Focus = Solutions

Solution: Focus the improvement efforts where they will generate the greatest return on investment--the 4% of the business processes creating more than 50% of the problems. There are three types of problems that are easily solved using the quality improvement methodology:

1. Reducing cycle time and idle time for product or service creation and delivery.
2. Reducing defects in your delivered product or service.
3. Reducing product cost by reducing waste and rework inherent in your processes.

Breakthrough improvement is the name of the TQM game and if you are not pursuing breakthroughs you are wasting a lot of time and money.