A GUIDE TO QUALITY MANAGEMENT Interdepartmental Quality Network October 1992 Minister of Supply and Services Canada 1992 Published for the Interdepartmental Quality Network by the Human Resources Development Branch Treasury Board of Canada Additional copies of this document may be obtained from members of the Interdepartmental Quality Network. A copy has been provided to your departmental library. The Human Resources Development Council recognizes and encourages the efforts of departments and agencies in embracing the principles and practices of quality management. These efforts are consistent with and support those promoted by the Council to improve human resources management in the Public Service. This Guide, prepared by the Interdepartmental Quality Network, is a timely contribution to the organizational renewal initiatives in the Public Service. Robert Lafleur Secretary Human Resources Development Council FOREWORD This guide presents a brief overview of quality management in the federal Public Service of Canada. It has been prepared by the Interdepartmental Quality Network, an association of representatives from federal departments and agencies that provides a forum and catalyst for discussion of quality management principles and practices. The abbreviation TQM (Total Quality Management) is frequently cited in literature in reference to the quality movement - particularly in the private sector. It is recognized, however, that there are many approaches and labels depicting the philosophy and implementation of quality management and quality service in both the private and public sectors. A focus on employee involvement, client satisfaction and continuous quality improvement is a consistent theme in all such quality approaches. In this guide the expression "quality management" is used for consistency and is intended, in a generic sense, to encompass the general thrust of the quality movement in North America. There are six sections to this guide. The first describes the development of interest in quality management in the Public Service, especially as it relates to improved service to the public. The second outlines a basic understanding of what quality management is and what it involves. The third describes each of the elements or operating practices of a quality approach. What an organization looks like when quality management is introduced is the subject in the fourth section. Next is a presentation of the steps that should be considered when implementing quality management. The paper ends with an outline of readily available sources of information on quality management. Quality management offers neither a quick fix nor a panacea. Rather, it denotes a flexible, holistic management philosophy that encourages and recognizes the contribution of every employee in the systematic and integrated pursuit of continuous improvement and organizational renewal. Some departments are making significant progress in incorporating the principles and practices of quality management in their renewal efforts. Sharing these experiences continues to be one of the primary benefits of participation in the Interdepartmental Quality Network. CONTENTS THE QUEST FOR QUALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 WHAT IS QUALITY MANAGEMENT?. . . . . . . . . . . . . . . . . . . . . . . . . . .3 ELEMENTS OF QUALITY MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 5 Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Client Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Strategy Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Continuous Process Improvement . . . . . . . . . . . . . . . . . . . . . . . .6 Employee Empowerment and Teamwork . . . . . . . . . . . . . . . . . . . . . .6 Employee Training and Recognition . . . . . . . . . . . . . . . . . . . . . . 6 Measurement and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . .7 A QUALITY ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 QUALITY MANAGEMENT IMPLEMENTATION . . . . . . . . . . . . . . . . . . . . . . .11 FURTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 THE QUEST FOR QUALITY Simply stated, quality is what the client says it is -- client focus is fundamental to the quality movement. This very practical and down-to-earth way of looking at quality is having a significant impact on organizational design and traditional management practices. What is occurring in many organizations can almost be termed a "quality revolution". The quality revolution originated in post-Second World War Japan, where quality management concepts from experts such as Deming and Juran were closely followed. Business leaders in Japan realized that a sustained commitment to product and service quality would be essential for their rejuvenation and competitiveness in a global market. Accordingly, a quality- driven renewal process was systematically implemented. The success of Japan's renewal effort is well known. A focus on quality has gained world-wide acceptance by leaders in both the private and public sectors as an important element in the way their organizations conduct business. Quality management is fast becoming the management philosophy of the 90s. In North America, the quality movement is particularly prevalent in the private sector. Competition for the Malcolm Baldridge National Quality Award in the United States and the Canadian Awards for Business Excellence in Canada is indicative of the expanding interest in quality management. Similarly, in the public sector, the pursuit of quality is very much in evidence. Many quality initiatives have been inaugurated or supported by federal and state or provincial governments in both United States and Canada. In Canada, for example, a major review of the economy in light of the challenges of global competitiveness has been inaugurated by the federal government. The "Prosperity Initiative", as it is called, has endorsed quality as a key strategy of Canadian economic rejuvenation. Recently, under the chairmanship of Canada, the International Standards Organization produced a set of guidelines for the management of quality that would give customers confidence that products and services would meet specifications without expensive and wasteful rework. By now, up to 50 per cent of companies in Europe, and increasingly more of their North American suppliers, are registered under this quality-assurance system. The quest for quality in the Public Service derives its strength from three sources. Public servants are increasingly aware of the expressed needs of their internal and external clients; managers are eager to conserve resources and use them wisely; and the public wants and expects quality service. A focus on quality and client satisfaction is closely linked to departmental renewal efforts under way in response to PS2000. The publication PS2000: The Renewal of the Public Service of Canada articulated this linkage as follows: The government wants to create a client-oriented Public Service, a major change, since the Public Service has not been used to regarding Canadians as clients. The government wants to transform a small, rigid systems-driven culture into one that is flexible and responsive to the needs of the public...means a more open, participatory and innovative management style. PS2000 makes a series of specific recommendations, many of which are in accordance with the principles of quality management. An expanding number of departments and agencies have been making progress in their respective quality management initiatives. In response to this interest, an Interdepartmental Quality Network was established in 1991 to serve as a forum and catalyst for discussion, with the aim of fostering quality management and quality service in the Public Service. Members of the Interdepartmental Quality Network are committed to the renewal of the Public Service. They believe that the philosophy and principles of quality management are supportive of the objectives of PS2000, and that quality management provides a framework for achieving these objectives. The implementation of quality management has the potential to generate continued innovation and commitment from the entire work force. To that end many quality improvement initiatives are well under way across the Public Service. WHAT IS QUALITY MANAGEMENT? Quality management is a way of doing business that involves everyone in determining client expectations and in constantly improving processes to meet those expectations. Quality management is founded on three basic principles: ■ client satisfaction (focus on clients) ■ continuous improvement (focus on processes) ■ employee involvement (focus on employees) Clients expect that service will be: ■ accesssible ■ fast ■ friendly ■ convenient ■ cheap and efficient ■ one-stop ■ reliable Client satisfaction can only be acquired if the delivery of quality products and services becomes a consistent business practice and conforms to client needs and expectations. This requires the desire and commitment of every employee to actively look for opportunities to improve the way everyday work is being done. This focus on clients and continuous quality improvement may seem very basic, but it represents, in many organizations, a major organizational renewal or paradigm shift in traditional management philosophy. Experience in both the private and public sectors has shown that the involvement of not only all employees, but also of unions and other employee organizations, has often been a key ingredient of successful quality management implementation. A distinguishing feature of quality management is its comprehensive or "total" aspect - hence the popular abbreviation TQM for Total Quality Management. Quality itself is not a new concept. The emphasis on "total" is intended to reinforce the point that quality management is a comprehensive framework. As a framework it is applicable to all business sectors and work activities. Too often in the past, quality initiatives had little enduring impact. Initiatives were isolated, ad hoc or piecemeal approaches inadequately integrated into business strategies and poorly resourced. To reiterate, the ultimate test of quality is satisfied clients. Simply stated, quality is defined by the client. Of course, clients' expectations increase over time, as do the clients' standards of acceptable quality. Quality management systematically and regularly inquires of its clients what they expect in terms of quality and then strives to meet, and even exceed, those expectations. ELEMENTS OF QUALITY MANAGEMENT A quality approach to management encompasses common elements or operating practices. Together these elements constitute a strategy or framework for quality improvement. These elements can be briefly described as follows: ■ leadership ■ client satisfaction ■ strategic planning ■ continuous process improvement ■ employee empowerment and teamwork ■ employee training and recognition ■ measurement and analysis. A brief overview and description of each of these follows. Leadership Quality service to clients must begin with an organization's senior management team - leadership by example. Visible leadership from senior managers is essential to achieve in practice the productivity and service improvements that a quality approach can bring. Quality management is not something that can be mandated or simply delegated down the hierarchy; senior management must be the driving force behind its implementation, and personally contribute by word and action to its acceptance. They must concern themselves with the process of quality management as well as with the results. They must value the contribution and achievements of each employee and provide recognition of continuous progress. They must promote innovation, risk-taking, open communications, team-building and continuous learning. In short, for quality management to happen, senior management must make it happen. Quality improvement and client satisfaction don't just happen by chance. Client Satisfaction Understanding the clients, measuring their satisfaction, and adapting work processes to ensure the delivery of quality products and services is the heart of quality management. To be able to see quality through the eyes of the client is essential for an organization to provide good service. A variety of means - focus groups, surveys, and meetings with clients are frequently used to get a clear picture of clients' requirements, expectations and satisfaction levels. Client satisfaction applies equally to internal as well as external clients. Well performing organizations seek not only to meet but to exceed client expectations. Strategic Planning Building quality improvement goals, strategies and priorities into work processes is an essential element of both day-to-day management and long- term planning. The focus should be on identifying the essential characteristics that make the service valuable to clients, the essential process steps that make good service possible, and ways to better meet client needs. When things go wrong despite good planning, action should go beyond solving the immediate problem to rooting out the cause and preventing a recurrence by improving the way the work is done. Opportunities should be provided for broadly based employee and client involvement in the planning process. This can be done within existing organizational structures, or, as is frequently the case, within a network of quality-improvement teams. The planning process should also include representation from unions and other employee organizations, as widely based support can make quality improvement easier. Continuous Process Improvement Client requirements and quality expectations never remain static. The quality management philosophy emphasizes that the response to evolving client needs and expectations must be a commitment to continuous improvement. Quality improvement is an "endless journey". Continuous attention must be given to ways and means of improving products and services. Incremental progress must be encouraged and achievements recognized by management. Continuous improvement is every employee's responsibility; the spontaneous pursuit of excellence in all processes and outputs is a positive indicator of the effectiveness of quality management in an organization. Specific examples of continuous improvement include enhanced services to clients; reduction in cycle times, errors, defects and waste; reduced costs; and improved productivity. As noted below, measuring improvement is of vital importance to the continuous improvement process. Employee Empowerment and Teamwork Empowered employees, pursuing the quest for quality either individually or in quality improvement teams, provide the creativity and expertise to energize and sustain process improvement. Employees must be given the trust, responsibility, tools and resources to make decisions and changes. Quality service requires understanding that employees are an organization's most valued resource. Participative management, effective communication, continuous learning, and shared decision-making exemplify employee empowerment in action. Employee Training and Recognition Effective improvement of service requires effective training, and that requires a plan and the necessary training resources. Quality management recognizes that employees need the training, tools and education to do their jobs well. To promote the efficiency produced by internal communications and participation, employees also need the so-called soft skills associated with adopting a quality approach - skill in teambuilding, group dynamics, communications, problem-solving, and consultancy. Of course, employees at all levels also need general information on quality management itself, particularly in the initial phase of implementation. An important corollary is the need to recognize employee progress and achievement. The reinforcement of positive performance by individuals and teams promotes the pursuit of excellence and helps to sustain employee motivation and commitment. Measurement and Analysis Management by fact, rather than by intuition, is essential to sound decision-making, so systematic data collection and analysis, especially of work processes, is a key element of service improvement. Focusing on any variation in the results of processes helps identify the causes, magnitude, consequences and potential solutions of such variation. Reducing variation means increasing the reliability of the output for the client. Measurement and analysis can also be powerful tools in the effort to reduce work that has to be done over, cycle-time and waste. Many of the tools of quality management - including Pareto Analysis, root cause analysis, flow-charting, brainstorming and client surveys - are certainly not new; what is new is the rigorous and conscientious application of such tools by the entire work force in their day-to-day activities. A QUALITY ORGANIZATION In order to achieve the hallmark of quality that can only be bestowed by satisfied clients, many organizations need to change their traditional ways of doing business. In today's global economy and world-wide competitiveness, organizational renewal is synonymous with survival. The North American private sector has embraced the quality imperative over the past five years or so, largely in response to Japan's economic resurgence derived from over forty years of quality-driven, client-focused business practices. Clients world-wide now demand quality products and service. Organizations that seek to remain viable, relevant, and competitive must respond to today's market realities. North America is not without its success stories in implementing quality management. Private sector winners of the prestigious Malcolm Baldridge National Quality Award (such as IBM, Federal Express, Motorola, etc.) and the total quality category of the Canadian Awards for Business Excellence (such as Chrysler, Xerox Canada Ltd, etc.) exemplify the organizational renewal that can be achieved with a focus on quality service and client satisfaction. Invariably these organizations attribute their success to the application of quality management to their business operations. Quality is equally important to the public sector. Indeed, many of the features of quality management - client satisfaction, responsiveness, employee involvement, continuous learning, teamwork, empowerment, participative management, etc. - are inherent to the cultural change and organizational renewal now under way in the Public Service. Quality management offers a comprehensive framework for these renewal efforts. At the same time, quality management does not limit flexibility or autonomy by attempting to mandate or prescribe a particular implementation strategy. There is no failure-proof recipe accompanying quality management. The paradigm shift from traditional management to quality management is frequently described as a pyramid inversion: "Do what the boss tells you" * Executive * (orders) * * Managers * * Supervisors * * Employees * * Clients * * * * * * * * * * * * * * * * * * Old paradigm (control structure) "Do what the clients need" * * * * * * * * * * * * * * * * * * Clients * * Employees * * Supervisors * * Managers * * Executive * (leadership) * * * New paradigm (supportive structure) An organization that effectively applies the principles and practices of quality management will generally undergo a transformation encompassing a shift in emphasis in some, if not all, of the following features: Traditional Organization Quality Management Organization Hierarchical structure vs Flatter structure Centralized authority vs Decentralized authority Many layers of management vs Few layers of management Control, fear, compliance vs Openness, trust, cooperation Avoidance of risk-taking vs Encouragement of risk- taking Adherence to rules, procedures vs Analysis, judgement, decision-making Service to the bureaucracy vs Service to the clients Minimal union involvement vs Active union participation Training a costly option vs Training an investment imperative Preservation of status quo vs Pursuit of continuous improvement Rigid supervision vs Coaching, interdependency, supporting relationship Focus on individual vs Focus on teamwork Management by intuition vs Management by fact Quality prescribed by management vs Quality defined by clients Employees told what to do vs Employees empowered to solve problems and initiate change QUALITY MANAGEMENT IMPLEMENTATION Implementation of quality management requires a substantial commitment of energy, time, and, particularly in the early phases, resources. As an investment in organizational renewal and cultural change, the adoption of the principles and practices of quality management has to be fully understood. Management is, understandably, going to ask the simple question, "Will the flower in bloom bear any resemblance to the picture on the seed package? What are the steps required to bring it to flower?" Quality management is characterized by its inherent flexibility, and the steps of its implementation vary according to the needs, mandate, structure and culture of each organization. However, there is much that can be learned from the expanding wealth of experience in quality management. Quality management implementation in an organization frequently takes into account the following considerations: ■ Determining organizational readiness to embark on quality management. ■ Generating senior management commitment. ■ Conducting an organizational quality assessment. ■ Formulating a quality management implementation strategy. ■ Focusing attention on organizational communications and activating a vision and guiding principles. ■ Deciding on an organization-wide or unit-level implementation. ■ Determining client needs, expectations and satisfaction with the quality of products and services. ■ Using the existing organizational structure to foster quality improvement efforts. ■ Establishing a Quality Council and quality improvement teams or their equivalent. ■ Involving managers, supervisors, employees, unions and other employee groups. ■ Identifying training and other resource requirements. ■ Applying appropriate data collection, analysis and measurement to assess quality improvement progress and achievements. FURTHER INFORMATION A wealth of experience exists in the application of quality management principles and practices. Information available from Public Service colleagues and contacts in quality networks can be of great help, as a catalyst, an inspiration or a guide. The following sources of information may be of particular assistance: Interdepartmental Quality Network The Interdepartmental Quality Network comprises about 100 representatives from about 40 federal departments and agencies who are interested in quality management. The group meets the first Thursday of every month, under the chairmanship of Georges Laframboise, Director of Quality Practices at the Treasury Board Secretariat, who can be reached at (613) 952-3142. Quebec Regional Interdepartmental Quality Management Network Within Quebec, the Regional Interdepartmental Quality Management Network is chaired by Jean Valiquette, Transport Canada, who can be reached at (514) 633-2800. Manitoba Regional Interdepartmental Quality Management Network For information on this network, concentrated in Winnipeg, contact the chairperson Lisa Douwes, Indian and Northern Affairs Canada, at (204) 983- 6216. Ontario Regional Interdepartmental Quality Management Network For information on this network, concentrated in Toronto, contact David Morley Employment and Immigration Canada at (416) 971-6914. HRM Interdepartmental Quality Management Network The Human Resources Management Interdepartmental Quality Management Network is chaired by Allan Findlay, Employment and Immigration Canada, who can be reached at (819) 997-3168. Supply and Services Canada Supply and Services Canada is developing a catalogue of suppliers of quality management services. Contact Sharon Graham at (613) 956-1649. Canadian Centre for Management Development The Canadian Centre for Management Development (CCMD) conducts executive training, research, conferences and seminars relevant to quality management. For information on CCMD services and publications contact John Dingwall at (613) 995-6019 or Lyette DorÚ at (613) 997- 4165. Training and Development Canada Training and Development Canada conducts training related to quality management and maintains a resource centre on training and quality management material. Contact Marie-France Legault at (613) 991-2183. Consulting and Audit Canada Consulting and Audit Canada provides consultant services in a wide range of areas. Contact Gordon Roston at (613) 943-2812. American Society for Quality Control (ASQC) Local chapters of the American Society for Quality Control provide access to a network of quality professionals, publications, conferences, training, etc. Contact your local chapter or call 1-800-248-1946 for information. Association for Quality and Participation For information call your local chapter. Association QuÚbecoise de la QualitÚ For information call (514) 866-6696. Quality Council of British Columbia For information call (604) 685-9252 Quality Council of Alberta For information call (403) 471-7006 Malcolm Baldridge National Quality Award For information call the National Institute of Standards and Technology at (301) 975-2036. Canada Awards for Business Excellence For information call (613) 954-4079.