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Total quality: a strategy for organizational transformation.

TOTAL QUALITY: A Strategy For Organizational Transformation

In this concluding article I will deal with the "how's" of Total Quality and try to lay out a roadmap around the many pitfalls that face a company attempting to make the transformation to T.Q.

Some Themes and Goals

To introduce Total Quality to an organization one must work toward a variety of linked goals more or less in parallel. The first is creating common values; from the CEO down through the company. Those values include "customers come first", personal accountability for meeting commitments", "good is never good enough", "risk is acceptable" and many more. Since values are not created by exhortation but by living experience one must at the same time proceed with actions designed to improve processes, with empowerment and with developing the various infrastractural elements that help build and maintain momentum. To simplify we could say that each step of the program should improve our capability in three areas; values, skills and tools.

Tools and techniques can be created by specialists or consultants. New cultural values can only be created by committed leadership from the most senior level of management. "Committed leadership" implies a degree of emotional commitment that is unusual and somewhat alien to the MBA culture most managers are comfortable in. The transformed companies have been led (not managed) by executives who fully understood their personal (in some way heroic) role in the process. The essential first step then is to make sure the CEO and his team are fully on board.

Getting Started

If our first step is to get the CEO and his team fully committed they must first acquire a deep enough understanding of TQ to realize the scope and scale of the task. By now most senior executives have an understanding of TQ at the intellectual level. The key to getting started with TQ is to move beyond that intellectual level to a deep belief that there is a better way to manage a business than the one most of us are used to.

There are a variety of resources available to help managers really understand TQ. The most commonly used, naturally, are books, speeches and seminars; especially those produced by the gurus of the quality movement. Good as these are a more powerful motivator exists; visiting TQ companies. Nothing is as persuasive as seeing a Milliken or a Motorola in action. Fortunately many TQ companies are more than happy to receive visitors so this is a practical as well as a desirable option.

Creating Champions

In a very large organization, especially one made up of multiple business units it may be necessary to create champions for change within the organization. Unilever is such a case. The initial push for Total Quality came from the head of their worldwide personal products business (itself only 9% of Unilever's $40 billion sales). Headquarters staff organized a tour of established TQ businesses for each of the forty business unit presidents in the group and, of these, six signed up to participate in the first phase of the project. Since then belief has spread not only to further companies within personal products but also to other Unilever operating units within the national markets involved.

Smaller businesses and the operating units of large ones will require champions at the functional level. It is especially critical to build a base of support in and around the key business processes for the reasons described in Part 1 of this series.

The Total Quality Survey

Once a reasonable base of support for TQ has been created the best way to move forward is a Total Quality survey. The components of such a survey should include a definition of quality as customers see it, identification of the business processes most critical to its delivery, a critique of these processes and an overall assessment of the quality capability and culture of the organization.

We conducted such a survey for our own business and were surprised, as others have been, by the results. Our clients definition of "quality consulting" differed markedly from our internal view (and this cannot just be an A.T. Kearney problem because between our Toronto staff we have experience working for seven other consulting firms). More crucially an open, objective and customer focussed view of our business generated a broad consensus to move forward despite a high initial level of skepticism.

An externally focussed and objectively conducted survey has two other significant advantages over internal drivers. It is likely to uncover major improvement opportunities that insiders don't see and, in our experience, is likely to pinpoint the CEO and other senior managers as part of the problem. A CEO who can accept and react constructively to such criticism sends the strongest possible message that he is serious to his organization. Perhaps this provides the only true guide to whether the CEO has moved from understanding to belief.

The final justification for the TQ survey is that it can provide a valuable check off point. In the light of the survey results management may decide not to proceed with TQ. Regrettable though this may be the survey will at least have generated some improvement projects that will more than pay for the survey.

Learning by Doing

At this point in the process some TQ experts argue that the next step should be an extensive training program for the whole company. In our view this just does not work. There is a vicious circle that training alone will not break.

In the absence of a well developed TQ environment, "normal" relatively unfocussed improvement efforts run into all the traditional obstacles. The key to breakthrough is focussed and, if necessary, over resourced pilot projects that will generate results and build some momentum.

Ultimately organizations increase their capability through a synergistic mix of learning and doing which we call the Performance Learning Cycle.

This is not to say that training is not important. It is vital; to help create common values, to build generic problem solving skills (sadly absent even in most managers) and to provide job specific technical capabilities. Indeed the best TQ companies invest extremely heavily in training. At Motorola twenty days training per employee per year is the established norm. But let me reiterate, training alone will not get the job done.

Developing Infrastructure

As the program rolls out you will be faced with increasing levels of activity that cannot be supported by enthusiasm alone. The time has come to develop a formal program infrastructure. Elements might include:

* A system for tracking

improvement projects * A mechanism for handling

identified problems beyond the

capability of the first line of

management * Recognition and reward

programs * Revamping personnel appraisal

and development systems

Ultimately one may even choose to reorganize around business processes instead of functions or products.

Milliken provides good examples of many of these elements. Their TQ program creates so many improvement opportunities that they have been forced to build a dedicated computer system to process them in the promised time frame; 24 hour acknowledgement, 7 day decision on action. Milliken also has a highly developed system of employee events designed specifically to recognize quality improvement efforts. They have also gone further than other companies that we have seen in reorganizing around process lines. Within manufacturing for example, each major process has a manager dedicated to process improvement quite separate from the people managers responsible for the crews at each stage of the process.


Eventually even the best programs become a little stale. At this point management should inject new life into the program by revisiting customer requirements and setting new goals. Sometimes the revitalization can be accomplished by focussing on a new metric. Both Hewlett-Packard and Motorola are now concentrating much of their effort on time, though without losing sight of other quality parameters.

How Long Does It Take

TQ is not for the faint of heart or the short winded. The pioneers in North America have been actively working in this area for over ten years, the Japanese for much longer. Even with the benefits of having a trail blazed by others to follow it is unrealistic to expect transformation to occur in less than three years and five is probably more realistic. In a properly implemented program however, significant improvements in key areas should be apparent in the first year with the benefits increasing, exponentially at first, as the program proceeds.

What's Important

In this article I have described a series of steps that lead down the road to Total Quality and toward a cultural transformation of the organization. Success at each stage requires sustained and consistent effort by senior management and continual attention to their role as leaders. Successful executives leading an organization toward Total Quality need to keep these things in mind:

* Organizations are led from the

top. The task cannot be

delegated; * Mistakes will be made. Honest

ones must not be punished; * TQ takes time. Patience is both a

virtue and a necessity; * TQ requires a significant

investment in people. Training, both

to create common values and to

build skills is a must; * Early successes are vital.

Achieve them at all costs.

Publicize them. Celebrate them.

Reward the contributors.

Tom Peters has said that TQ programs fail for two reasons; system without passion or passion without system. Wise executives recognize the need for both.

Changing the fundamentals of how you run your company is about as big a change as a company can make. It requires time, money, persistence and courage. There needs to be a compelling reason to take on such a challenge. We believe there is. Total Quality companies have outperformed the S & P 500 by nearly 40% over the last ten years.

John Gilks leads the Total Quality practice of A.T. Kearney management consultants in Toronto. He is particularly interested in applying TQ principles to consumer goods and professional services and is currently working with clients in North America and Europe.
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Title Annotation:part 3 - The Road to Total Quality
Author:Gilks, John
Publication:Canadian Manager
Date:Sep 22, 1990
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