Total quality management theories offered.

In today's rapidly changing real estate industry, asset/property managers and providers of goods and services must be flexible enough to respond to the needs of owners, tenants and organizations they serve. Several institutional real estate owners are currently undergoing corporate reengineering efforts that will undoubtedly effect their organizational, financial, and operational objectives, which will in turn have a significant effects on the manner in which their real estate investments are positioned and managed.

In addition, other owners as well as tenants, over the past few years, have become increasing more sophisticated. Property management firms, in their quest to maintain current and attract new clients, should realize that their corporate management and quality philosophies should be aligned to address the needs and expectations of their customers. In order to meet this end, a customer-based and service-oriented philosophy will work best. A progressive management philosophy and the proper application of proven quality management techniques and process improvement tools may be the difference between maintaining a valued client or loosing the client or market segment for ever.

Total Quality Management (TQM) is a customer-based and service-orient management philosophy that involves bringing together the combined talents and capabilities of employees and managers in a systematic manner. This method of management stimulates creativity and problem-solving activities, promotes teamwork (employee motivation) and leads directly to improved quality, effective communication, higher productivity, reduced costs/expenses and increased levels of customer satisfaction.

The history of the quality movement dates back to the first two decades of this century. In The Quality Imperative: A Business Week Guide, the contributing editors of Business Week discuss the chronological maturing of the quality initiative from agricultural research conducted by Britain's R. A. Fisher to the influence on Walter A. Shewart, a physicist at AT&T Bell Labs. Shewart developed Statistical Quality Control (SQC), which then had profound influence over perhaps the two most significant quality philosophers of our time, W. Edward Deming and Joseph. M. Juran. Deming's and Juran's quality improvement efforts in the post-war re-industrialization of Japan won them the highest respect and acclaim amongst the people of Japan, their business community, and government. The names Deming and Juran have graced Japan's highest and most coveted business awards.

Japan is not without its own quality philosopher. Influenced by Shewart, the postwar work and accomplishments of Genichi Taguchi resulted in Japan's academic approach to engineering being based almost solely on Taguchi's methods.

These quality management/control philosophers have developed theories that when systematically applied and practiced will reveal significant results in improved performance, productivity, customer satisfaction, and goods and services quality. In Mary Walton's book, The Deming Management Method, Walton clearly articulates Deming's philosophies and prescriptions for quality improvement.

Deming's quality management approach is made up of three elements: The System of Profound Knowledge; The Fourteen Obligations of Management (Fourteen Points); and the Plan-Do-Check-Act (PDCA) Cycle (Shewart Cycle).

The System of Profound Knowledge includes: the understanding of the causes of variation; systems, sub-systems, and processes; psychology; knowledge; and their relationships to and effect on quality. Deming developed the Fourteen Obligations of Management (The Fourteen Points) which outlines his theory. He suggests that improving quality means always and consistently practicing the Fourteen Points. Significant emphasis on constancy of organizational purpose, leadership, continuous process improvement, education and training is prevalent in Deming's program. Perhaps this emphasis accounts for the popularity and use of Deming's Method in the federal government, armed forces, defense, manufacturing and many other customer-based and service-oriented industries.

The PDCA Cycle, first developed by Shewart, is modeled after a scientific method applied to management planning and decision making.

Juran, sometimes referred to as the developer of Total Quality Control (TQC), pioneered the Breakthrough Sequence to quality control which includes: instituting change and control; breakthrough in knowledge and attitudes; and analysis. In addition, the three part Juran Trilogy includes: quality planning; control; and implementation.

Philip B. Crosby, a former assembly line worker whose widely popular book Quality is Free propelled him to the top of the speaking and seminar circuit virtually overnight, suggests that the quality journey into the future will require the implementation of a cultural shift from the traditional to a more methodical means of quality improvement. Crosby developed a 14-step program to realize this end. An emphasis on zero defects, measurements, goal setting, and corrective action are only some the 14 steps outlined in his program.

By understanding the history of the quality movement and associated initiatives, from the initial development in the early part of the twentieth century, to post-war applications, to the public dissemination and introduction of these concepts in the early 1980's, property management firms can re-analyze their current management philosophies and quality initiatives to determine where improvements are required in support of the rapidly changing real estate industry. Further, the property manager must determine if their current or developing initiatives will be compatible with owner and tenant initiatives, as well as those of providers of goods and services.

The development of a formalized quality management program is a major undertaking. It means much more than just drafting a policy statement or sending selected employees to seminars and training. A formalized quality management program or management philosophy transcends the entire organization, requires a shift in the management paradigm, is customer-based and service-oriented, and employs process improvement skills and techniques.

The success of such a program requires substance, believability, and true commitment. Extensive training and education from the senior leadership to the individual performing internal or external functions is the foundation of any quality management initiative and its subsequent success. A quality management initiative is dependent and effected by associated suppliers of goods and services and directly effects the customer developed definition and perception of quality.

Particular emphasis should be placed on the following: continually determine the customers definition and perception of quality property management; isolating the key characteristics and aspects of quality; and then improving those processes that effect the key characteristics and aspects of quality. This continual communicative feedback loop will allow for continuous process improvement and will eventually lead to improved customer perception of quality property management.

The current trends in property ownership and management indicate that owners will command more service for less, will require that those services provided are of the highest quality, and that those selected or strategically aligned providers of goods and services are capable of providing a wide range of administrative, management, and technical added value service.

Quality property management firms, progressive corporate facility managers, and providers of high quality goods and services to the real estate industry can certainly accommodate these needs by employing quality management philosophies. The industry goal in the quality continuum is to exceed the expectations of the owner and tenant each and every time by providing superior quality service, as seen through the eyes of the customer.

Terence B. Hoey, FMA Organizational and Management Resources Consultant