Thursday, March 26, 2009

On business fads


OK, I confess. You're reading a previously-written post that I've scheduled to appear today. Since I can't predict what the big news story will be when this post appears, it's as good a time as any to look at business fads.

This is what Business Horizons said about the topic in 1994:

By now we have learned to recognize the pattern and predict its outcome. The first stirrings begin in the media. Soon, wherever you look, you find reports about the new management trend and how American business will finally be able to fundamentally improve the way things work and ensure continued viability and profitability. Then we discover that everyone is an expert in this new method or technique. Myriads of consultants will tell you they have been promoting and applying it for ages and have achieved stunning results. Inevitably, however, the fad passes out of fashion and, though reports of its demise are often premature and its failure to produce results often exaggerated, the disappointment in the outcome is not.

More here.

For me, my favorite business fad of my lifetime was quality circles. How did those come about?

[M]any American companies and some government agencies were looking for a quick turnaround approach that would replicate the Japanese quality success without altering the structure of American management. Most attractive was the Japanese use of voluntary work groups who met regularly to discuss how to improve the quality of products and work processes--a concept called "quality circles."

While there were a few successes, most of the quality circles on these shores did not end well. Government Executive claims that the American quality circles did not duplicate all aspects of the Japanese experience:

Model Japanese companies had 75 percent or more of their workforce in quality circles--in fact, many workers participated in several quality circles. Top managers relentlessly pushed all of their cost, quality and performance data down to the lowest levels of the organization for rigorous evaluation and action. Every worker and supervisor already had extensive training in quality measurement concepts and trust between management and employees was high. Most Japanese labor unions were company unions that supported different kinds of employees meeting and discussing work process changes.

A British study claimed:

The success of individual circles seems to depend greatly on how well their members work and integrate together, and how well the circle philosophy has been evolved to fit the company's style. A circle will only work as part of a policy of worker involvement and open management and if it is coupled with a specific long-term company-wide commitment to quality.
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