The convulsions that rocked the marketplace in the last 20 years are only too familiar. Foreign competition swelled, not just from Japan and Germany but from Taiwan, France, Singapore, Mexico, Italy, China -- and from foreign-owned companies locating here. Along with that globalization came wave after wave of new information technology, spawning a thousand new products and services and transforming both factory and office. Both trends put acute pressures on managers. Manufacturers had to match Japanese quality or Taiwanese prices. Service companies had to offer unprecedented levels of convenience and friendliness. Everyone had to manage an unprecedented pace of innovation. Introduce new products and services fast enough to match the competition, but not so fast as to alienate customers. Install new production and information systems to boost efficiency and speed, though not so often that employees never catch up. Bet wrong -- wait too long or plunge in too soon -- and you're out of the race.
A century ago the old marketplace had pushed companies in the direction of specialized, supervised wage labor. In the process it had created the manager-and-employee mentality. The new marketplace was saying, in effect, that system and that mentality wouldn't work anymore. Companies were coming up short on two critical counts.
Quality and service was one. Production could be maintained, up to a point, by supervisors. And minimum levels of quality could be assured by a squadron of inspectors. But what about zero-defect (or "six sigma") quality? And what about the intangible quality of customer service, where a smile and a little extra effort may create a customer for life? No army of inspectors or supervisors can make recalcitrant employees do exceptional jobs. The best systems, companies discovered, work only if the employees want them to.
Innovation was another. To innovate successfully is to learn how to do things better, cheaper, and faster; how to use new equipment and materials and procedures; how to improve the product and the service. In the new marketplace the ability to innovate was a company's critical resource, more important than big factories or a well-known brand name or access to capital. The trouble was, a company of wage laborers marching dutifully ahead wasn't well adapted to learning. Employees weren't going to come up with new ideas. Managers had enough to worry about just to get the work done. So it was that Sears, Roebuck & Co. took years longer than its competitors did to learn that a mail-order merchant really ought to accept Visa and Mastercard -- and really ought to have an 800 number.
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For some businesspeople it was all too much. Their companies foundered or were bought out. They themselves were sent packing. Others decided the answer was simply to slash the payrolls. Most managers and executives, however, found themselves groping -- for new methods, new techniques, new principles, anything that would help them run a company better in this puzzling and exacting new environment.
The gropers created huge markets. General-management books, which for years had inhabited a backwater of the publishing business, suddenly were as hot as Judith Krantz. (In Search of Excellence, which had an initial press run of 15,000, ended up selling more than 4 million copies over a 10-year period.) Classes and seminars and training institutes attracted droves of customers. Philip Crosby's Quality College, in Winter Park, Fla., has trained more than 140,000 managers since 1979. Consultants did a thriving business, too, teaching executives concepts like intrapreneurship and reengineering and cluster management.
Ideas provoked action, and businesspeople began experimenting. Manufacturers introduced just-in-time inventory systems. Offices streamlined or eliminated paper flow. More than anything else, though, companies began monkeying with their methods of managing people. New cross-functional teams were designed to break down barriers between departments. New pay-for-performance systems were supposed to get everyone pulling in the same direction. Managers learned new techniques of motivation, too. Directives were out, coaching was in. Sitting in an office was out, walking around was in. The very word employee began disappearing, in favor of associate.
In recent years the hottest new approach has been Total Quality Management, and its popularity shows how badly managers have been feeling a need to restructure things. TQM has exploded. Thousands of companies have set up formal programs; hundreds have put messages such as "A Total Quality Company" on walls and stationery. What's more, TQM seems to challenge the top-down style of modern management. Differently conceived, it might have been just another engineering fix, like just-in-time, based on techniques such as statistical process control (SPC) and enforced by a beefed-up quality-assurance department. But the evangelists of TQM preach employee involvement, and some managers, at least, are obliging. Machine tenders, trained in SPC, check their own defect rates. Quality teams, drawing people from every level of the company, rout out sources of error. Employees bandy about concepts such as internal customer and price of nonconformance.
So chinks have been appearing in the armor of wage labor. Employees (or associates) are being asked to think a little about what goes on beyond their workstations. They are being taught a little -- just a little -- about managing their own jobs. And yet, often enough, both employees and managers seem unsure of what to make of it all. Is the company really serious, or is this just another fad? Sometimes executives or even whole departments are sent off to some retreat or other, but nothing seems to change.
Maybe most damning, the new experiments and practices often lack a business rationale. Is TQM, for instance, really worth the trouble and expense? It wasn't to the Wallace Co., a Houston oil-supply company that won the Malcolm Baldrige National Quality Award in 1990 and entered Chapter 11 shortly thereafter. The accounting firm Ernst & Young, in a 1992 survey of quality practices in four nations, noted that the business community was growing "disenchanted" with the axioms of quality: "After implementing management practices that were reputed to lead to improved quality and improved overall performance, companies have experienced mixed results." Newsweek late last year pronounced Total Quality all but passé. Citing companies that had abandoned TQM programs in the face of hard times, the magazine concluded sourly, "American firms may not truly embrace Total Quality Management until it makes their shareholders more money than it did the seminar organizers, consultants and book publishers, who reaped the biggest quality rewards of the 1980s."
