It may be total, but it's not all: Magic or moonshine? Alison Eadie takes a quality look at the TQM experience, finding fans and sceptics

A SHAREHOLDER recently asked Alan Sugar, Amstrad's chairman, what he was doing about TQM. Mr Sugar enquired whether it was a disinfectant.

Yet other company chairmen wax lyrical about its beneficial effects. It is now hard to open an annual report without reading about a company's commitment to 'total quality management'.

Eugene Anderson, chairman of Ferranti, sees it as a main plank of the company's rehabilitation, essential for boosting morale and outlawing sloppiness.

Ferranti has come back from the brink of bankruptcy and losses of pounds 162m pre-tax in 1989/90 to expected losses of pounds 15m this year and profits next. TQM, it says, represents 'the largest concentrated training effort in the company's history'.

Rank Xerox was similarly looking into the abyss when it adopted TQM in 1983. Its market share had dropped from 95 per cent in the mid-1970s to 45 per cent in 1981. Despite cash-flow problems, it adopted an initial TQM programme costing pounds 170m which involved giving each of the 5,000 salesmen 10 days' training. Profits recovered from pounds 150m in 1983 to pounds 360m in 1988.

Rank Xerox was the first winner of the European Quality Award last year and a previous winner of the British Quality Award.

When British Telecom first turned its thoughts to TQM in the mid-1980s, it did not have customers. Rather, it had subscribers. Because of the size of the task - BT had a workforce of 250,000 - it put training first.

The somewhat bureaucratic approach was to 'get it (TQM) into the bloodstream', according to Lowry Stanage, director, quality and organisation. In 1990 BT went back to the basics of quality, putting customers first, as part of the overhaul of the entire organisation.

The de-layering of management helped shorten lines of communication and weeded out some of the resistance to change. Mr Stanage said trying to convince middle management of the need for change when the company was clearly not going bust was often hard.

BT can point to tangible improvements in customer service. The proportion of business orders met in six working days rose to 83 per cent in 1992 from 28 per cent in 1987; residential orders met in eight working days rose to 89 from 18 per cent.

Iain Livingston, director of quality at British Rail, describes TQM as a bag of tools needed for problem-solving. The issue is picking the appropriate tools.

As TQM has spread from manufacturing industry to the service sector, the professions and government - local authorities, health authorities and educational establishments are busy signing up - it has spawned an industry of consultants, books and conferences.

It has also spawned sceptics. It seems everyone (except Mr Sugar) has to be seen to be doing it. But voices have been raised questioning whether TQM is everything it is cracked up to be and whether those who claim to be committed are doing it right.

Sir Denys Henderson, chairman of ICI, has warned of 'the clarion cry' for TQM. He said that when he joined ICI, work study was the flavour of the month; then came operational research; then organisational development, and so on.

'The plain truth is that all of these are admirable techniques which can be used in improving overall factory performance, but in themselves they are not universal panaceas for our industrial ills.'

Sir Denys, however, added he was strongly committed to quality improvement in all aspects of business and believed TQM could be an important weapon in the armoury of British manufacturing industry 'as it strives to recover from its present parlous state'.

Success is far from guaranteed. Although total quality is at the top of the agenda for 90 per cent of chief executives, 80 per cent of TQM programmes fail, according to a recent survey by the consultants AT Kearney.

The survey of more than 100 UK businesses showed that 80 per cent either provided no information on performance or reported no improvement.

Kearney said companies that practised TQM successfully emphasised tangible results, insisted on performance measurement, had an integrated programme and clear commitment from the top. Of the 80 per cent, half believed they were successful practitioners of TQM. A triumph of hope over objectivity, Kearney suggested.

Small businesses have a somewhat jaundiced view of the empire-building of the quality industry. The Federation of Small Businesses sees it as 'a lot of concept and no nitty gritty'.

Ro Pengelly, chairman of the federation's employment affairs committee, said small businesses were much closer to the business risk. 'If you do not look after your customers, you will lose them and possibly your house too. Big companies with salaried employees see quality as a separate issue. In a small business it is integral.'

The particularly British enthusiasm for registration has created extra time and cost burdens for small businesses, which can face the threat of being dropped as suppliers to larger companies unless they conform to specified standards.

The UK has a total of 24 different accreditation bodies, according to the Department of Trade and Industry. Registration with BS5750, the management standard, is viewed by many large companies as an integral part of their total quality programme, but is in many ways inimical to the ideas of continuous improvement inherent in TQM.

And total quality itself is not the whole answer, according to its staunchest believers. Bernard Fournier, managing director of Rank Xerox in Europe, said: 'It is not a substitute for technology or research, as the Japanese have shown.'

Mr Fournier believes perfect service is the 'unclaimed crown' for which European companies should be striving. 'The Japanese have led the way, but have yet to prove their philosophy embraces service. The US is catching up, but companies there are more concerned with re- engineering processes.'

Europe, according to Mr Fournier, is some way behind, but can use quality as a common language to achieve perfect service. 'That is the challenge of tommorrow.'

(Photograph omitted)