The Japanese success story has made W. Edwards Deming's Total Quality Management (TQM) theory increasingly popular among American managers, from car manufacturers to educational leaders. TQM is based on two tenets: the primacy of customer satisfaction and the necessity of tapping nontraditional sources (especially employee ideas) to institute quality. TQM creates a quality-promoting environment by advocating workplace changes based on Deming's 14 points, condensed into 4 categories: positive customer relationships, employee empowerment, continual gathering and use of statistical data, and creation of an environment promoting unity and change. Adapting TQM to educational settings means changing teacher and student roles and student evaluation philosophies. At a Sitka, Alaska high school, students track their own progress, influence their own education, and operate their own salmon smoking business. The school downplays grades and standardized tests in favor of continuous evaluation. TQM will fade out unless the principles of gradual transformation and continuous improvement are understood and applied. Businesses are still stressing short-term profits and individual performance over teamwork and customer satisfaction. Although TQM offers no panacea for an ailing educational system, it sheds new light on educational management. (MLH)