Squaring Off On Quality Circles
Few people will deny that quality circles -- small groups of employees organized by management to solve specific problems within a company -- are dramatically helping many U.S. businesses today. At their best, circles offer a two-pronged benefit: The company finds cost-efficient ways to improve productivity, and the employees feel they are valuable to their employers while learning new analytical skills from trained leaders.
The American quality circle movement, however, also has its critics, some of whom are already predicting that America's circles won't have the same long-term success as their Japanese counterparts. A major reason, these critics say, is that managers in the United States are committed to solving short-term problems rather than investing in programs that will tackle longer-range, more serious difficulties. "U.S. managers tend to avoid getting too deeply involved in the programs," says Joji Arai, Japan's chief representative for the Japan Productivity Center in Arlington, Va. Managers need a far deeper commitment and more sophisticated training programs for their employees than they have so far demonstrated, he asserts.
Quality circles consist of as many as a dozen employees, generally from the same department, who meet weekly or biweekly to choose, and solve, common workplace problems. Concerns range from how to improve productivity or scale back inventory to how to cut office paperwork or improve a certain manufacturing process. Most companies form circles by asking for volunteers; others require their employees to attend, at least in the beginning. Each circle has a leader, often the employees' work supervisor, who trains members in problem-solving techniques and runs meetings.
One frequently used technique is "brainstorming," in which the members of a group, one at a time, call out possible solutions to a problem while the leader writes them down on a blackboard or overhead projector. No criticism of the idea is allowed until the brainstorming is completed, but the group will later test the most promising ideas and report its conclusions to the department or company manager.
Another technique is Pareto analysis, a method widely used in most Japanese factories, which essentially means ranking problems in order of frequency. Diagrams isolate the few major issues that cause the most difficulties from the many unusual, less predictable ones that confuse analysis.
Numerous U.S. companies are reporting that circles have solved dozens of problems, including many that managers didn't even know existed. For example:
* A circle at Benson Mfg. Corp., a 44-employee maker of wood and plastic products in Milwaukee, halved the number of times wood chipped during production of blades for old-fashioned ceiling fans. A $1,000 investment in a more reliable system proposed by the workers is expected to save the company $12,800 a year.
* Circles at KQED, a 200-employee public television station in San Francisco, reallocated office space for employees, redesigned a cumbersome membership form, and developed a procedures manual for the accounting department that significantly cut bookkeeping errors.
* A circle at Heminway & Bartlett Mfg. Co., a 350-employee producer of industrial thread in Watertown, Conn., designed gauges that helped employees measure more accurately the thickness of packages of industrial thread. The number of wrongly sized packages returned by customers declined sharply.
* A circle at a Teledyne Semiconductor plant in Mountain View, Calif., with about 200 employees, reported that silicon wafers worth $148 each were breaking because they were stored in boxes with lids that didn't fit. The company estimates that elimination of the problem boxes saves $44,000 a year.
Dramatically successful programs, with benefits worth four to six times their costs even in their first year, are common enough that news of them has made the quality circle movement mushroom. (Costs include the money paid for the training and the loss of directly productive time to circle meetings.) The International Association of Quality Circles, a U.S.-based group that sponsors meetings, seminars, and publications dealing with circles, had 860 members at the beginning of 1981. Today it has 5,000.
But there are quality circle failures too, especially in companies where managers are unprepared for a flood of employee suggestions. The problems experienced by Grove Valve & Regulator Co., an 800-employee manufacturer of oil pipeline supplies in Oakland, Calif., may be typical of the difficulties American quality circle efforts have to overcome.
According to Chuck Starosta, Grove's quality circles facilitator, the program faced initial opposition from the president of the union, who argued that productivity improvements might allow managers to eliminate jobs. Starosta also found that the two- and three-day training programs for middle managers and supervisors run by a leading quality circles consultant were too brief and general to convince circle leaders that the managers knew how to make the program succeed. In addition, some of Grove's middle managers had difficulty abandoning their traditional "autocratic" style. Some were so dismayed by the time-consuming decision-making methods that they began to criticize the whole program on the shop floor, complaining that workers were merely "lolligagging around" when they were attending circle meetings.
Yet quality circles have survived at Grove Valve. According to Starosta, Grove's circles program had something that many U.S. programs lack: top-management commitment to a long-term program. Instead of organizing circles to deal with immediate problems of productivity, quality, or labor relations, as many U.S. companies have done, Grove launched its circles program for the same reasons that Japanese companies originally began theirs: to involve workers in company decision-making and to benefit from the best suggestions these employees had to offer.
The problems initially experienced by Grove Valve aren't always so successfully resolved. The Chicago consulting firm of Imberman and De Forest reports that a study of 41 U.S. quality circle programs in one year of operation indicated that 28 failed to produce measurable benefits that exceeded their costs. The study cited four specific causes of quality circle failure. The first, labeled "employee morale," referred to employees' distrust of management and subsequent lack of cooperation on any project designed to improve any part of the company. Second, the study cited "poor management persuasion," or management's failure to demonstrate how the quality circles would actually benefit the company and the employees.
Third, the study found that some quality circles lacked foremen trained in listening well to the comments of the employees. "If the foreman serving as a circle leader is a good listener and tries to do something in response to a problem, he will receive excellent cooperation from his work force," the study noted. "Cold management style" was the fourth failure cited. It resulted in a feeling among the employees that management was indifferent to their suggestions and concerns.
The Imberman and De Forest study offers solutions ranging from supervisory training courses for foremen tailored to company needs, to a change in management style. This change must give assurance that management cares about working conditions and that quality circles are not meant to cut jobs, as some unions fear, but to improve sales and let the company stay competitive.
Management commitment, notes the Japan Productivity Center's Arai, is often lacking in many American circles, in contrast to those of the Japanese. The difference, Arai continues, can be traced to Japan's far greater experience with the quality circle concept. Japanese circles grew out of statistical techniques first introduced in the 1950s among a company's high-level employees. By the 1960s, these techniques were being taught to the organization's lower-level employees as well -- the group that eventually formed the nucleus of today's circles.
More important, once these lower-level workers learned certain sophisticated skills, the training continued, so that employees also learned other skills, from industrial engineering to mathematical theory to cash-flow analysis. The training continues to this day as circles apply progressively more advanced techniques to workplace problems. The Japanese training is both more varied and more sophisticated, says Arai. And, he adds, it reinforces the idea that managers care about employees' professional growth.
American quality circles, on the other hand, have been organized by managers largely to meet immediate problems, Arai says. Their attitude is that programs should be designed for short-term skill development only. Therefore, participants receive training when a circle program begins -- either from a consultant or from a company manager who has attended a seminar -- but generally get little opportunity to learn new skills later.
Because American circles often don't go beyond a basic exposure to problem-solving techniques, they frequently "burn-out," at least temporarily, after a few projects. Some companies start new circles or shift members from one circle to another to rekindle enthusiasm. Others deliberately let unenthusiastic circles "rest," sometimes allowing their whole program to slow down. Still others use the circle's unproductive periods for some sort of training, without any long-term educational plan.
Creating a training and quality circle program more like those in Japanese companies is worthwhile, Arai says. "The best input from labor comes only when you have enthusiasm in the labor force. Workers will be very reluctant to leave an employer who is always encouraging them to learn new skills," he adds. "Concern for the worker really does pay off."
Further information on the quality circle movement in the United States is available from the International Association of Quality Circles, P.O. Box 30635, Midwest City, OK 73140.