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© 1999 Sandholm Associates

Effective strategies for quality

PAPER FOR THE 16TH INTERNATIONAL EXPOSITION OF QUALITY CIRCLES 1999 IN SINGAPORE

Lennart Sandholm
Professor and President Sandholm Associates AB, Sweden

During the past ten years, an increasing interest in quality has been noticeable world-wide. Companies, as well as public organizations, have become involved with quality activities of various kinds. Management journals write quite a lot about quality. What about the quality of goods being produced and services provided? Has quality really improved in proportion to the increased interest? The answer isn’t an unconditional "Yes". Some companies have been successful but many companies show a poor "Return on Quality". Why are results poor and what can be done about it?

The reason why the results are poor is that there is a focus on those methods and tools which are popular at the time. There’s nothing wrong with these methods and tools as such. The fault lies in how they are implemented. They are used without any analysis as general methods and tools for quality improvement and, used in this manner, will only lead to marginal improvements.

An increasing number of companies are now realizing that all quality related activities have to be integrated into a strategic plan. Various quality management concepts, methods and tools have to be combined in such a way that they lead to competitive advantages and excellent business results. Companies have to devote much more time to strategic quality planning.

Five stages of quality culture

The quality culture differs from organization to organization. Some organizations have a well developed culture when it comes to quality, while others have a very rudimentary culture. According to the author’s experience, five stages of quality culture can be identified.

Dormant stage

Within an organization in this stage of culture, there is no evident interest in becoming involved in quality or anything related to quality. Management thinks that things are fine as they are. Profitability is acceptable and there is no feeling of external threat. This is the stage Western industry was in, until around 1980.

Awakening stage

A more or less rude awakening might come. The situation is not as pleasant as it has been. Conditions have changed radically. Manufacturers in the Western world come up against a type of competition they have not met before. They started to lose market shares and many companies started making losses. The reason was that Japanese competitors were overtaking them in the eyes of the customers. So customers bought Japanese products. This crisis hit the Western world around 1980.

Groping stage

When a crisis occurs, something has to be done. The question is, what? In this situation, as very few top managers really know exactly how to bring quality into the activities, there is a tendency to have a go with whatever happens to be the latest fad in management magazines, as well as in conference and seminar invitations. That is to say, that there is a culture of relying on trendy methods and approaches. And over the past twenty years there have been plenty of fads: quality circles, statistical process control (SPC), seven tools, ISO 9000, benchmarking, process re-engineering, national quality awards, balanced scorecard etc. There is nothing wrong with these methods as such, what is wrong is the way they are applied. They are used as general strategies of improving the performance of the organization in the quality field, without the situation first having been given proper study.

Action stage

Gradually it dawns that the input applied in the form of trendy methods and approaches has only generated marginal results. It is then that management might realize that measures of a quite different character are called for. This requires a strategic plan for the development of the activities followed by implementation. The contents of a strategic plan of this type might include are discussed below.

Maturity stage

In a culture of this stage, quality, and consequently a clear focus on customers, is a natural part of the operations. It is integrated into everything that is done in the organization. One might not even use the word quality. Quality is something completely natural that is always taken into consideration.

Recognized vs. potential champions

The growing interest in quality finds expression in many different ways. One is that management talks a lot about it without demonstrating any real ability to take steps that will produce results. Another is to focus on whatever method is currently the most favored one. Both of these approaches reflect ignorance and lack of experience.

Success in the quality field calls for persistent and systematic activities which involve everyone in the organization. There are no quick fixes!

Figure 1 below compares organizations which are recognized for their success at quality (recognized champions) with those that still have a long way to go (potential champions).

Figure 1. Comparison between successful and less successful organizations.

Those organizations which have become recognized champions in quality can be characterized in the following terms:

Work is focused on the customers
Activities are focused on satisfying the customers’ needs. In addition to considering stated and implied needs, unknown needs are looked for. Satisfying these latent needs gives extra customer satisfaction. Even the needs of internal customers are considered.

Measures are based on facts
If the measures taken are based on facts there is more chance of achieving a better result. This means that the organization should always attempt to obtain information and facts that illustrate the situation. Opinions, beliefs and vague ideas are avoided as a platform for making decisions.

Work is focused on results
In the final analysis, it is the results that count. Has quality been significantly improved? Are the customers much more satisfied? Are the costs of poor quality halved? The activities should focus on goals of this type. Blinkered concentration on methods and tools that happen to be fashionable at the time are best avoided. These should be recognized for what they are – methods suitable to be used when an analysis indicates that use of such a method can solve a problem or help reach a goal.

Work is characterized by action
It is merely action that gets results. Talking won’t get the organization very far.

Professional leadership is provided
Top management must pilot the organization into a position where it is recognized for its excellence in quality. This requires hands-on leadership that is characterized by deep-seated competence and skills in quality and genuine involvement in quality. Confidence in and delegation to subordinates are natural aspects of a leadership of this type.

Activities involve all functions and levels
To be excellent in quality in the overall sense requires the dedication and participation of everyone. If only some of the people in the organization are involved in these activities, it will never become recognized for its superior.

Everyone is trained in quality
Shifting from being a potential champion to becoming a recognized champion is a transformation that calls for a major change of the organization’s internal culture. This means that everyone’s attitudes will need to be changed. Moreover, new skills and knowledge will be required in many areas. Bringing about these changes in attitudes and providing these skills is the purpose of massive input in the training field. Training in quality is provided for everyone within the organization, regardless of function or level. Training starts with top management and then work its way down, level by level.

Persistent and systematic work to achieve clear goals is in existence
To achieve really worthwhile results, persistent and systematic work is required. Consistent and regular action is necessary. Quick fixes, that do not involve much effort, will not get the organization very far.

Long-term view on quality is in existence
Giving the business a long-term orientation is the only road to success in the quality field. What we are concerned with is a quality development process that will take three to five years. Short campaigns won’t produce any lasting results.

Chronic problems are dealt with systematically
All organizations have various chronic quality problems. Often the existence of chronic problems is not immediately apparent. The organization is used to them, and the work has been arranged so this kind of problems will not cause too many disturbances. However, the root causes still have to be eliminated. By doing this we can achieve substantial quality improvements. Fire-fighting measures to overcome sporadic, short-term problems is nothing more than preserving status quo.

Preventive measures are taken to avoid problems
When the organization starts so supply new or modified goods or services, these should be of the right quality from the very start. The same applies to new and modified processes. If the organization is to succeed in this, preventive measures are required in the form of planning and preparation that focus on quality. Fixing problems every time they arise means poor quality.

Involvement and participation characterize the internal culture
Everyone who is affected by the activities should be involved in the co-operation. And this includes not only those who work for the organization itself, but external customers and suppliers as well. The traditional function oriented organization is replaced by a process oriented organization.

Effective strategies

An organization that wishes to become the market leader or to significantly improve its profitability as a result of a genuine focus on quality will need some kind of strategy. However, organizations that choose their strategies solely on the basis of the latest fashion in methods will fail to reach their challenging goals.

What is needed is effective strategies. Essentially, there are four strategies that are relevant to organizations wishing to achieve outstanding results. If quantum leaps are to be achieved in the quality field, measures based on all four strategies will be required.

Strategy 1: Hands-on leadership

Leadership starts with the organization’s top executive. He or she is the organizations quality leader par excellence, and as such should provide hands-on leadership in the quality field.

Leadership of this type includes various measures that are initiated by the top executive:

Mission and vision
Leadership is founded on two statements: mission and vision. The mission makes clear why the organization exists, the vision tells what the organization likes to accomplish or where it would like to be sometime in the future. A good vision is customer focused, doable, compelling and shared throughout the organization.

Quality policy
A quality policy based on the organization’s vision is drawn up, introduced and made known to everyone in the organization. The quality policy includes guiding principles for the work. It applies to all activities that influence quality. The quality policy should be long-term, comprehensive, relevant and kept short. It has to come by conviction from the top executive.

Quality goals
Overall quality goals are drawn up for the entire organization and then broken down into sub-goals for each function and process. The goals should be stretch goals for improvements. They should be quantitative and written. Plans for achieving the goals are drawn up, implemented and followed up.

Quality system
The quality system based on the quality policy embraces quality related activities. It shows what relationships these activities have to each other. The quality system thus form a network of procedures that should be followed in activities, which influence the quality of goods and services. The scope will depend on the size of the organization. The international ISO 9000 standards on quality systems can serve as guidance.

Quality organization
Organizing for quality means to define responsibility and authority for activities that have any influence on quality. Factors such as products, nature of processes, customers, ownership, management philosophy, policy etc. will influence the way the organization is structured.

Involvement and participation of everyone
Everyone in the organization influences quality in their day to day work. It is therefore important that everyone is given the conditions for performing their work in a good way. For many organizations, focusing on quality involves a cultural change. To bring about this change is the goal of a massive training input (see Strategy 2). The new culture is characterized by confidence and delegation. Everyone is engaged in a continuous process of improvement.

Strategy 2: Massive training

Making the move from being a "potential champion" to becoming a "recognized champion" is usually a transformation that involves a radical re-adjustment of the organization’s internal culture. This means that everyone’s attitudes will need to be changed. Moreover, new skills and knowledge will be required in many areas. Bringing about this change in attitudes and providing these skills is the purpose of a massive input in the training field.

Training in quality is provided for everyone within the organization, regardless of function and level. Training must start with top management and then work its way down the organization, level by level.

Massive training in quality generally has four components:

Top management seminars
Top management has a tremendous influence on quality. This has been said many times. Still, however, there is a lack of professional hands-on leadership in the field of quality. Without a sound knowledge of how to manage for quality, top managers are often just paying lip service to quality or they might go for what is at the moment highlighted in business magazines. This means that they apply trendy concepts and tools, without knowing if this is really what is needed in order to bring about much better results. Of course, there are exceptions. The purpose of top management seminars is to give clear understanding of the importance of quality for the result of the organization and to show how top management can considerably improve efficiency and profitability by providing hands-on leadership in quality.

Workshops for managers
Work is carried out in processes. The processes must be capable and efficient. They have also to be managed in such a way that they will generate the intended results. In most cases, when it comes to major processes, more than one function is involved. This means that they are cross-functional in nature, and in order to achieve success in quality, it is essential to consider cross-functional issues. According to the author’s experience, this is the objective of the second component of an in-house training program in total quality. This training is carried out as workshops for all personnel in managerial and other key positions.

Training of specialists
In addition to managers, there are also many specialists who need to be trained in quality. The aim of this training is to give these specialists knowledge and understanding of the factors which influence quality in their respective functions. After completing the training, the specialists will be able to introduce effective methods in their own area. The content of the training depends on the function
(product development, production, purchasing, marketing, quality etc.).

Training of all other personnel
All other personnel also have to be trained. This type of training should be provided by trainers from within the organization, as the trainers must have a sound knowledge of the organization, its activities and culture. The trainer must be able to answer very down-to-earth and practical questions raised by the participants. In order to facilitate such broadly-based training, the author has developed a training package called "Focus on Quality". This material has been adapted to the conditions and needs of various sectors. At present there are versions for manufacturing, service, health care and social services organizations.

Strategy 3: Market orientation

Successful organizations have a pronounced market orientation which includes both focus on customers and customer needs, as well as studies of competitors. This is often referred to as market-driven quality.

A market oriented approach includes:

Customer focus
Customers, both existing and potential, are identified and their needs are found out by means of market research. Not just stated and implied needs are considered, but also needs that are unknown to the customers are looked for. Satisfying such needs might even lead to customer delight. Customers are not forgotten once the goods or services have been delivered. The organization takes initiatives to obtain information about what the customers think about the goods or services. Customer attitudes are investigated regularly. A clear focus on customers might lead to a high degree of customer loyalty.

Monitoring competition
The organization studies competition on the market regularly and systematically. In this area, benchmarking could well be used.

Monitoring trends
There are trends on the market. It is important to keep a close watch on the market in order to identify changes quickly and make the necessary adjustments. This applies also to technological changes.

Product planning
When a new product is to be developed, many units and individuals in the organization are involved. If the launching of the new product is to become successful, careful planning and follow-up are required for the whole of the business from the moment the idea arises until the time the product starts being used. The planning states which tasks and activities are to be carried out. It also states who has responsibility for each task and activity.

Strategy 4: Program for quality improvements

A prerequisite for success in the face of stiff competition in the market is continuous work on quality improvements. This work takes two directions. One is towards being able to meet customer needs in a better way, partly by removing any defects and failures from the goods and services delivered, and partly by adding new features. The other is to improve all processes - product planning, product development, purchasing, manufacturing, marketing, distribution, invoicing, etc. These processes are often complex and interdepartmental which may lead to inefficiency, unnecessary costs, unclear responsibility, dissatisfied customers and, in the final analysis, even lost orders.

Quality problems could be of two types. One is sporadic problems. They are usually dealt with by "fire fighting". The other, and more important to the financial result of the organization, is chronic problems. These problems might even be hidden in the organization. Often, the causes of chronic problems are much harder to identify than the causes of sporadic problems. That is why people tend to accept chronic problems and regard them as normal part of life.

The elimination of chronic problems represents a genuine quality improvement. But this needs a different approach from dealing with sporadic problems. It needs changes in attitude, knowledge, habit, technique, equipment, etc. In this context we can talk about a quality breakthrough. A breakthrough of this type requires willingness to tackle quality problems systematically, and throughout the whole organization. The activities have to be initiated and driven by top management. All functions have to be involved.

Quality improvement work is often a process that begins with symptoms and continues via causes to measures and follow-up. This process is far simpler in the case of sporadic problems than it is for chronic ones.

Most sporadic problems can be dealt with by the personnel concerned and their supervisors. Their tasks include taking suitable measures in the event of imperfections and problems. Sometimes the help of a specialist might be needed.

In the case of chronic problems the question of responsibility is not so obvious, and these problems are harder to deal with. They affect several areas in the organization and lead to measures in different areas. The symptoms may show in one area, the causes in another, and measures may have to be taken in a third. Quality improvements of this type therefore make greater demands for steering and co-ordination of the activities involved.

An effective program for improving quality has several components:

Improvement procedures
The improvement process includes several steps: collecting data and other information, selecting improvement projects, setting up project teams, analyzing symptoms and possible causes, deciding on cause, evaluating remedial measures, deciding on, implementing and following up measures. Procedures for these steps have to be prepared and put into effect.

Organizing for improvements
Effective quality improvement work has to be carried out in a project-by-project approach. Experience shows that in organizational terms it is advisable to divide the quality improvement work into a steering and co-ordinating component, and an analytical and remedial component. The steering and co-ordinating component includes: deciding priorities for quality improvement projects, initiating analyses and other investigations, setting up project teams, deciding to implement the measures proposed. The analytical and remedial component includes: carrying out analyses and other investigations, arriving at causes, proposing measures. The responsibility for the steering and co-ordinating component must be with the executive group or part of the executive group forming a quality council. The analytical and remedial aspects of improvement activities should be delegated to a project team, one for each project. This team will be the owner of the improvement project. Once the improvement measure has been implemented the project team is dissolved.

Training in improvement work
The members of the project teams must have a competence in the application of quality improvement tools and measures. If skills and knowledge are lacking, relevant training has to be provided.

Quality data
Effective improvement work is based on facts about the situation of the organization. Such facts could be in the form a data on deficiencies and failures, customer complaints, poor quality costs, etc.

Quality assessment
By assessing the current situation and performance, opportunities for improvements are found. An effective tool in the assessment is the criteria included in a quality awards scheme, e.g. the Malcolm Baldrige National Quality Award or the European Model for Business Excellence. Other means to get relevant information are quality auditing and benchmarking.

Strategic quality plan

The four strategies as per above include many activities. These activities have to be integrated into a strategic quality plan leading to a total quality culture characterized by:

- Customer focus
- Process orientation
- Participation and empowerment
- Continuous improvement

In the strategic quality plan, a variety of concepts, views and methods (even trendy ones) must be combined in such a way that they improve the organization’s competitive ability and generate excellent business results.

In the author’s experience, an effective strategic quality plan contains four components (see Figure 2):

- Commitment of top management
- Cultural change
- Improvements
- Systematic approach

Figure 2. Strategic quality plan.

Commitment of top management

Without the clear and explicit commitment of the organization’s top management there is no chance of achieving worthwhile results. The executive group must show by practical action that they are truly concerned with developing the business by focusing on quality.

A plan for this type of operational development should initially be aimed at creating such commitment. A good way of starting is to hold a one-day top management seminar. The purpose of this is to convince the executive group of the effect that development with a focus on quality has in the form of better results. In addition, it should be made clear that it is the dedicated support of top management that will determine what results are achieved.

To obtain facts on which the design of the strategic plan can be based, the top management seminar should be followed by a quality culture assessment. An assessment carried out during a relatively limited period of time is usually enough to show where the weaknesses lie and thus where the opportunities for developing the business exist.

The result of the assessment could be presented to top management at a workshop. The aim of this workshop should be to decide jointly what needs to be done to significantly improve the operational results. The strategic plan for the rest of the development work is drawn up here.

Management commitment also includes defining the organization’s mission. This forms the basis of the work on vision and quality policy. Both the vision and the quality policy should be communicated by management to everyone in the organization. Everyone should understand the meaning of this for their own work. In addition, management should be prepared to communicate to the personnel its overall concrete goals for the business. This includes quality goals.

Cultural change

The customers and their needs should govern all the activities within the organization. The underlying principle should be to satisfy the needs of both external and internal customers. For most organizations this will require a change in the internal culture.

The factor which determines how successful this type of change will be is the commitment of top managers and how they convey their intentions to the rest of the organization.

This requires a comprehensive training program. This starts with a seminar for top management (see above under commitment of top management) and then continues down through the organization, level by level. The training is aimed at influencing attitudes to a development of operations with the focus on quality and at providing the necessary knowledge about methods and techniques. The massive work required in the training field is dealt with in more detail above under Strategy 2.

Improvements

The improvement activities have two aims. One is to meet the customers’ needs in a better way, the other is to improve all the processes within the organization.

Experience shows that the best results in improvement work are achieved by implementing one concrete improvement project after another. Information on this approach is given above under Strategy 4.

The choice of improvement project should be made on the basis of information. The information can be obtained in different ways:

Operational results
It is easy to obtain information, using a limited effort, on the operational results of any organization. This could be reflected in the occurrence of faults and failures, complaints, process outputs, etc.

Problem identification
People in the organization usually find it easy to identify problems which need to be solved. A systematic identification of problems can thus serve as a useful start to the improvement work.

Process analysis
Studying and analyzing the organization’s processes can provide a valuable basis for the improvement activities.

Quality assessment
An assessment of the activities, for instance, with the aid of the criteria in a national quality award scheme, can indicate where improvements are needed.

Poor quality costs
Information on the costs of poor quality, i.e. the costs which could be avoided if all products and processes were perfect, is a good starting point for the improvement work. This type of information provides a common basis for deciding on the importance of alternative improvement projects.

Customer attitudes
The customers’ attitudes to the organization’s products and behavior are a key factor determining how successful the organization will be. It is therefore important to measure these attitudes. The information thus obtained serves as an important start of the improvement work.

Personnel attitudes
The attitudes of personnel towards the organization’s activities are very important for the operational results. It is therefore important to obtain information on the attitudes of the personnel through surveys. The results of these surveys can also be used as a basis for the improvement activities.

Benchmarking
Benchmarking is a way of learning to become better by making comparisons with successful organizations. This could be a useful point for starting the improvement process.

Systematic approach

The work needs to be conducted in a systematic way in order to achieve excellent results. This is where an appropriate quality system comes in. Such a system should show how the different operations, which are essential to quality, should be carried out. The standards included in ISO 9000 can provide some guidance. However, it is up to each individual organization to work out the best systematic methods for their own needs.