What caused the global financial crash in 2008?
Failures of AIG, Lehman, Merrill, and other major financial firms? Disproportionate risk-taking by banks and lenders? Deregulation within the financial industry? Development of new ways to finance mortgage products? Excessive lending and borrowing in the housing market?
Yes, yes, yes, yes, and yes.
However, these causes only tell half the story behind the financial meltdown that morphed into the biggest global recession since the Great Depression (Covid-19 aside).
What was the root cause? The real reason behind the enormous cost to the economies of many countries and the lost fortunes of millions of families?
A lack of total quality management (TQM).
If organizations from within the financial sector believed in putting quality first, and positioned culture and people above profit margins and structure, the events leading up to the crisis could have been avoided.
Just imagine how different things might have been had the financial sector been managing their quality in a similar way to ISO 9001!
We’ll continue to explore this concept later but, before we do, let’s look at what else we’ll cover in this Process Street post:
- What is total quality management (TQM)?
- Total quality management’s 5 core principles
- TQM’s benefits (& how it might’ve stopped the financial crisis)
- Create and use a TQM framework with Process Street!
Let’s get going!