Ishikawa Rokuro’s TQC reform of the business itself (1978)

Riding out a low-growth era on quality control rather than price

The core of this decision was choosing, in a shrinking market, the apparently roundabout route of thorough quality and process control instead of a discount war for orders. With demand thinned by the oil shock and the founding-family chairman he had relied on now gone, Ishikawa Rokuro brought TQC — regarded as a factory technique — into construction. The obvious objection was available: a site whose conditions differ with every job cannot be handled like a plant turning out standard goods. Kajima nonetheless carried it through as a company-wide programme, and confirmed the result in the form of the industry’s first ¥1 trillion order book and the Deming Application Prize.

It is also true that the ¥1 trillion of FY1981 and the growth that followed owed something to an external tailwind — the recovery of construction demand in the 1980s — and that TQC alone did not produce all of it. Even so, refusing to retreat into price competition during a low-growth period and instead retempering the business through quality control laid the foundation that carried the order growth of the bubble years. Not expansion for its own sake, but what you earn from when the market contracts: Ishikawa’s adoption of TQC was the management decision that answered that question with quality and control.