Just as I was finishing this post, I discovered an excellent article on the same subject by John Elkington, a leader in integrating sustainability and business. His article, published in the Guardian's Sustainable Business Blog is titled, "Is Sustainability the New Total Quality Management?" Elkington wrote:
We often forget the intense evolutionary curve that the quality movement raced up in the 1980s as new standards and expectations triggered immense changes in business. So the fact that TQM does not yet fully embrace sustainability today does not rule out a powerful convergence in the future. Looking back at the quality revolution, I see strong parallels with where we find ourselves today. Early on, a few businesses decided to view "quality as an opportunity rather than a cost, and their investment in TQM paid off handsomely." To make this happen, leaders had to think completely out of the box.
Elkington also referenced a number of other recent business articles that suggest sustainability may be the next Total Quality Management (TQM). I never thought there was a distinction. W. Edwards Deming and J.M Juran, who are widely credited with founding the TQM movement, didn't grow up in a world where environment was a big concern. Yet their conceptions of "quality" fit with much of modern sustainability thinking. I would argue that TQM was part of the first phase of a new industrial revolution, which is now being defined as sustainability and which is still only in its infancy.
In the 1980s and 1990s, the quality movement was profoundly changing industry. Some companies embraced it and others strongly resisted. From my perspective, it had three essential teachings:
- Continuous improvement in meeting customers' needs;
- Continuous improvement in eliminating deficiencies in products and manufacturing; and
- Expanding the definition of customers (or stakeholders) beyond buyers and shareholders.
Partly in response to corporate environmental disasters and human rights abuses, quality-oriented companies were, for the first time, competing to redraw the map of stakeholders to be satisfied. The quality movement helped business leaders understand that there were factors formerly considered external to the job of making a profit which were now becoming essential for creating business value. Embracing quality management meant considering the needs of employees, suppliers, contractors, and even citizens in the communities where companies operated facilities. But there was little mention of environment in the quality literature.
At that time, corporate environmental management was still largely a reactive activity regarded as an unfortunate but necessary cost of doing business. It primarily involved cleaning up past messes and ensuring legal compliance to avoid making more. Terms like sustainability, CSR (corporate social responsibility), carbon footprint, and ESG (environmental, social, and corporate governance) were not yet in common use.
In 1994 I co-authored an article with Janet Mitchell, then Director of Strategic Planning at Duracell and now CEO of The Mitchell Group Consulting, titled "Total Environmental Quality Management." It was published in the Juran Institute's journal, Total Quality Review, and to our knowledge was the first article linking the quality movement and environmental management into a unified approach. It seemed logical to Janet and me that doing business with a focus on quality should inherently include reduced environmental impacts and improved corporate social responsibility, factors which certainly affect brand and business value. After all, pollution is obviously the result of deficiencies in processes. And quality inherently involves delivering the most value with the fewest resources and environmental impacts. Our article attempted to merge environment and quality by logically extending the three aspects of quality manufacturing. We proposed to incorporate proactive environmental management into TQM by:
- Viewing all environmental problems as deficiencies in the process of converting resources into manufactured products;
- Shifting the focus from managing the consequences of using resources (environmental impacts) to managing resources as an input. In other words, the best way to eliminate deficiencies (including environmental ones) is to do much more for customers with much less resource mass; and
- Extending the definition of business customers or stakeholders to its logical conclusion by considering the impacts on society as a whole and even the earth’s biosphere.
These ideas, which seemed new at the time, are now obvious and increasingly accepted. Today, issues like environmental management, carbon footprint, and supply chain management, William McDonough’s "Cradle to Cradle" thinking and John Elkington's "Triple Bottom Line" are dramatically altering the way business is done. Yet management of these issues has become far too complicated, is often perceived as divergent from other corporate goals, and can be difficult to reconcile with daily business decisions and accounting. It’s clear that business is due for the next round of integration and unification in thinking, similar to how the quality movement helped companies incorporate waste reduction, product quality, and the concept of stakeholders into their business practices the 1980s and early 90s.
I am convinced that the next phase of the new industrial revolution will be focused on resource performance, or dMASS. dMASS thinking offers businesses a way to drive innovation toward zero mass products and manufacturing – delivering much more value to customers with much fewer resources– while increasing profits. Enhancing resource performance is a way to incorporate environment, sustainability, and business strategy to help a company protect and enhance its brand value by ensuring quality, improving its environmental performance, reducing its risks, improving competitive advantage, and reducing its cost of sales at the same time.
Companies in a variety of industries are finding innovative ways to dramatically increase resource performance; we publish examples each week in our newsletter. Resource performance is the key to integrating business and environmental strategy. It's the next big step in business thinking.