Over the past two years there has been rapid deterioration of the competitiveness of many Indian industries. This decline is likely to continue for the next three years, at least. A natural consequence of the decline in competitiveness and the turbulent environment has been intense focus and debate about appropriate counter measures - about how to regain our competitiveness. Obviously, the option of stringent quotas on imports of certain products is outdated. One counter measure that is gaining momentum is the need to attain world-class quality.
Quality in business is accomplished by adopting TQM, company-wide. Its four principles are:
- customer focus
- strategic quality planning
- executive leadership and
- quality planning, quality control and quality improvement of all key business processes.
A word of caution - in almost any organization, there are usually more ways to fail than to succeed. At the beginning of the quality journey, there are some potential dangers that should be watched out for:
- Delegate too much
- Train without action
- Confuse activity with results
- Misuse of tools
- Focus on attitudes
- Ignore data
- Go too fast
- Skimp on resources.
Customer Focus
TQM focuses the energy of the organization on the customer. The reason for strategic quality goals is to delight the customer. Leadership is extended toward the goal of delighting the customer. Finance looks for its primary income opportunities through identifying and satisfying customer needs. Cost savings are realized by eliminating the poor quality that irritates the customer and also costs the money. Empowerment of people in the organization is for the purpose of delighting the customers.
The focus on customers is driving Japanese companies to extraordinary lengths. Since Sony introduced the first Walkman in 1979, it has marketed 227 different models. On an average, this means a new model every three weeks!
Strategic Quality Planning
The elements of strategic quality planning are not too difficult to understand. Hideo Sugiura, former chairman of Honda Motor Company, explained the roles of senior management and strategic quality planning. He described four “ sacred obligations” of management:
- A clear vision of where the company is going - this must be clearly stated and communicated to every member of the organization in language he or she understands
- Clear definitions of the small number of key objectives that must be achieved if the company is to realize its vision
- Translation of the key objectives throughout the organization so that each person knows how performing his or her job helps the company achieve the objectives
- A fair and honest appraisal so that each and every employee knows how his or her performance has contributed to the organization’s effort to achieve the key objectives, accompanied by guidance as to how the individual can improve this performance.
To be effective, strategic quality planning must be used as a tool - a means to an end - and not as the goal itself. It must be an endeavour that involves people throughout the organization. It must capture existing activities, not just add more activities to already overflowing plates. Finally, it must help senior managers face difficult decisions, set priorities, and eliminate many current activities - not just start new ones.
During a workshop attempting to get all top management involved in TQM, members were asked to participate in setting the quality goals to help create the new measurements of quality management and customer satisfaction, and to help identify opportunities for improvement. The overall response has been incredible. Members were eager to participate in benchmarking, to spend entire days on quality objectives, to personally become more knowledgeable about TQM, and to make quality the first agenda item at every meeting.
Executive Leadership
The most important dimension of business culture is the leadership paradigm. Traditional forms of leadership honour stability, systems of control and procedures, as well as, conservative, dispassionate style and behaviour. Whereas traditional executives are managers, TQM requires leaders. Managers focus on the short-term, on obtaining current results, on the quarterly statement and annual report. Leaders have a long-term perspective and are visionaries. Managers are concerned with control of resources, with making things happen by giving orders and issuing policies. Leaders establish credibility with their passion and their personal deeds.
Executive leadership has two dimensions - the formal organizational and personal. Active quality councils are the vehicle for the formal leadership. Personal leadership is required for recognition, participation, consistency, and personal demonstration of the quality processes.
Managing for Quality
In managing finances, organizations have three related, but distinct, processes. Financial planning creates a budget. Financial control compares actual performance against the budget and takes action to bring the two into agreement when necessary. Financial improvement comes through systematic efforts to cut costs or enhance sales.
Quality is managed by three similar processes. Now the names change to quality planning, quality control and quality improvement. Quality planning is the activity for developing the products and processes required to meet customers needs. Quality control evaluates actual quality performance, compares actual performance to quality goals and acts on the difference. Quality improvement is the means for raising quality performance to unprecedented levels (breakthroughs).
Quality leaders improve at a revolutionary rate. Any organization that survives for more than a brief period makes improvements. Most, however, improve only at the most pedestrian rate.
Quality leadership requires that goods, services and internal processes satisfy and delight customers. Quality planning is the process for ensuring the same. The structure and participation of quality planning may appear to increase the planning time, but they can actually reduce the total time required for reaching full operations. An example of a successfully conducted quality planning project is “ Replanning front axle and front axle support system”. Quality planning, along with strategic quality planning are pre-requisites for business process quality management.
Quality control requires that appropriate control subjects be selected. Those control subjects then require an appropriate feedback loop to keep them at the designed level. Among the most important control subjects are those that are important to the customer. Other control subjects are important because they affect the customer, even if the customer is not explicitly aware of it. This aspect is usually addressed through the ISO 9000 quality management system. However, quality control is most effective when there is self-control. When it is elevated to a managerial process.
Results
TQM is the set of management processes and systems that create:
- Delighted customers
- Empowered employees
- Higher revenue
- Lower cost
The features of a good or service determine the level of customer satisfaction. Those features include not only the characteristics of the principle goods and services being offered but also the characteristics of the services surrounding them - such as ordering, billing and delivery. Some features attract and delight us because they provide a benefit in a particularly new and appealing way.
Organizations which seek to delight their customers soon discover that external customers cannot be served effectively unless the whole organization is involved. This involvement takes many forms and goes by many names, including empowerment of employees.
Quality in features drives a company’s revenues. Reduced deficiencies lower costs. Both improve the overall financial performance.
CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.