Total Quality Management and the Family Business

24 Jan 1994

As published in Providence Business News

Can Family Business work with Total Quality Management?

Of course they can, but it is much more difficult than they often realize. Total quality management, TQM, represents no only a shift in management style but a major change in the culture itself of the family and the business. They day-to-day behavior of the family business owners and the leadership they exert will determine the family business’s success in implementing TQM.

Most entrepreneurs are highly skilled as technicians, and as charismatic and autocratic leaders. They excel at getting things done through the power of their personality. TQM, however, requires a totally different kind of management style that is most commonly know as empowerment. In this model, the manager primarily facilitates others doing their best, most like a coach than a star player or a drill sergeant. This represents a difficult and major shift in the management style of most family business owners.

Not only does this promote the skills and values underlying good teamwork, it is the basis of a Total Quality Management organization.

In most family businesses, when the founder insists on team decision-making and collaboration in the planning of the development of the business, this process prepares the next generation. By planning collaboratively, facing responsibility jointly instills this kind of organization culture for successive generations. The fear that second and successive generations face ill be calmed through the development of trust in the Family Business Council.

The shift in leadership from the first generation to the second, particularly when more than one child is involved in the business, is a time of great stress and trauma for the family and the business’s employees. Often it is a time when decision-making must be shifted from unilateral decision-making to teamwork – when there is going to be more than one owner in the next generation. For it to go well requires that family members’ opinions and needs are taken into consideration.

Interestingly enough, the principles of TQM can provide a smooth transition from the first to the second generation, match the changing cultural norms in our publicly held corporations and are embraced by successful multinational corporations all over the world. It is the development of Total Quality Management organizations which emphasize teamwork, responsibility, accountability and excellence that are most likely to succeed locally and in the global economy.

Marc A. Silverman, Ph.D., has been consulting to family businesses in New England for more than 10 years and has offices in Providence and Glaistow, N.H.