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European Management Journal Vol. 19, No. 4, pp. 392403, 2001 2001 Published by Elsevier Science LtdPergamon

Printed in Great Britain

0263-2373/01 $20.00 + 0.00PII: S0263-2373(01)00042-1

The Contribution ofBusiness ExcellenceModels in RestoringFailed Improvement

InitiativesALASDAIR MACLEOD, Heriott-Watt University, Edinburgh

LYNNE BAXTER, Heriott-Watt University, Edinburgh

This paper contrasts the generally accepted view

that quality is a key factor in long-term prosperitywith the failure reported by some four out of everyfive organisations to achieve the expected outcomefrom Total Quality Management (TQM) initiatives;the development and role of Quality Awards andModels in stimulating the attainment of improvedquality levels world-wide is assessed. Three indus-trial case studies demonstrate how the discerningapplication of a quality model standard orbespoke can facilitate the resurrection of aninitially ineffective performance improvementinitiative. 2001 Published by Elsevier Science Ltd.

Keywords: Performance improvement, Total Qual-ity Management, Quality models, Implementation,Case studies, Failed initiatives, Culture change

Most Quality Initiatives areUnsuccessful

According to Beaumont et al. (1994), typical TotalQuality Management (TQM) implementation pro-cedures will involve continuous problem-solvingactivities incorporating work-place teams, a qualitystructure to give focus to the approach, statisticalcontrol and measurement of quality components,identification of customers (internal and external),the whole supported by extensive training.

European Management Journal Vol. 19, No. 4, pp. 392403, August 2001392

Despite the enthusiasm shown for the approach and

well-publicised reports of successful applicationsthere exist substantial data confirming the failure ofsome 80 per cent of Total Quality Management(TQM.) initiatives to achieve the expected outcomes(Whyte and Witcher, 1992; Kearney, 1992). Typicalexplanations applying to those organisations whoclaimed to have introduced quality programmes butreported no improvement in performance cite excess-ive internal focus, the absence of a clear link to cus-tomers or business results, ingrained attitudes, lackof time, or resources, or understanding. Wilkinson etal. (1998) have summarised the outcomes of fourfurther European studies carried out in the early

nineties to examine the effectiveness of TQM. In rein-forcing the criticisms of the Durham report, theAshridge/EIU study (Binney, 1992) reached twomain conclusions. Firstly, rigid pre-determined TQprogrammes, particularly when imposed from out-side the organisation, do not work. Secondly, compa-nies, which have gone farthest in applying TotalQuality, have never had a TQ programme inthem TQ has developed organically. These commentsare rather echoed by Beer who points out that qual-ity initiatives fail because they are delegated by topmanagement to staff groups, the human resourcefunction or a quality function.

A London Business School study by Cruise OBrienand Voss (1992) concluded that the 42 organisationsasked to self-evaluate against the US Baldrige modelcriteria performed poorly. In their view these busi-

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THE CONTRIBUTION OF BUSINESS EXCELLENCE MODELS TO RESTORING FAILED IMPROVEMENT INITIATIVES

nesses were a considerable distance from achievingtotal quality. However the fifth study, by Zairi et al.(1994) expressed a more positive view. Their surveyof externally documented information covering 29companies noted that, over a five-year span, above-

average industry performance was demonstrated foreach of the indicators chosen by the authors. The finalstudy by Wilkinson et al. (1993) records the responsesto a postal self-completion questionnaire sent to 4000members of the then British Institute of Management; just 9 per cent of the 880 respondents claimed theirexperience of TQ to be very successful.

Ahire et al. (1998) present another aspect of the issuein their survey of the American situation from whichit is evident that many companies claim to be cau-tious about implementing TQM fearing that to do sohalf-heartedly would not lead to any worthwhile

improvement in quality. Though their analysis of 359firms which have fully or partially implementedTQM does bring out that even partial implemen-tation can produce positive results, nevertheless theirstudy concludes that companies should only fullyimplement TQM if they possess all the theoreticalconstructs needed to ensure its success. These find-ings reinforce the evidence from earlier surveys car-ried out by the consultants A.D. Little and McKinseyand quoted by Senge in his 1993 address to the Amer-ican Society of Quality Control (ASQC) annual con-ference. Senge reported that, of 500 TQM companiessurveyed less than one-third were accomplishing

anything. Moreover two-thirds of the TQM pro-grammes had ground to a halt. However Easton andJarrell (1998) examined the change in the corporateperformance of 108 US firms that had begunimplementing Total Quality Management (TQM) between 1981 and 1991. Their empirical studyrevealed that performance, measured by bothaccounting variables and stock returns, had beenimproved in those firms that had implemented TQM.

The Development and Role of Awards

and Models

In 1881 Lord Kelvin (cited in Bank, 1992, p. 162)emphasised that when you can measure what youare speaking about and express it in numbers, youknow something about it; but when you cannot mea-sure it, when you cannot express it in numbers, yourknowledge is of a meagre and unsatisfactory kind.

Accordingly, in the effective implementation of TQMmeasurement of performance based on self-assess-ment is perceived as essential. Emphasis on thisapproach lies at the heart of the major quality awardsand models that have been developed over the past50 years. The purpose of the Deming Prize, spon-sored since 1951 by the Japanese Union of Scientistsand Engineers (J.U.S.E.), is to award prizes to those

European Management Journal Vol. 19, No. 4, pp. 392403, August 2001 393

companies which are recognised as having appliedCompany-Wide Quality Control (TQM in the West) based on statistical quality control and which arelikely to keep up with it in the future (Evans andLindsay, 1993, p. 112). Winners over the years have

included Toyota Motor Company, NECIC/Microcomputer Systems and Florida Power andLight (prior to 1984 entry had been confined to Japanese companies).

In the USA, concern about the decline in Americanproductivity and loss of competitive edge in the early1980s had prompted President Reagan to sponsor aseries of study conferences to examine why this washappening. Their final report recommended that aNational Quality Award similar to the Deming Prizein Japan be awarded to those firms that successfullychallenge and meet the award requirements. These

and the accompanying process should be very simi-lar to the Deming Award to be effective(ibid, p. 113).Consequently the US Senate instituted the BaldrigeAward in August 1987. It aims to promote awarenessof quality as an increasingly important factor in com-petitiveness, to develop understanding of what isrequired to achieve performance excellence, to shareinformation on strategies that have been successfulin improving performance and to emphasise theadvantages their successful implementation confers.Only US companies may compete for this awardwhich has three categories covering manufacturing,service and small business. Support throughout the

US for the objectives of the award is comprehensive.It is noteworthy that each year since 1995 the USCommerce Departments National Institute of Stan-dards and Technology (NIST) has prepared a Bald-rige Index a fictitious stock fund made up of pub-licly traded US companies that have received theBaldrige Award. NIST invested a hypothetical $1000in each of the whole company winners since thattime ADAC Laboratories, Eastman ChemicalCompany, Federal Express Corporation, MotorolaInc. and Solectron. The notional investments weretracked from the first business day of the month fol-lowing the announcement of award recipients up to

1 December 1999, making adjustments as appropriatefor stock splits. Another hypothetical $1000 wasinvested in the Standard & Poors 500 for the sametime period. NIST found in this sixth annual studythat the group of whole company winners outperfor-med the S&P 500 by 4.8 to 1, achieving a 1101 percent return on the theoretical investment comparedto a 228 per cent return for the S&P 500. A similarhypothetical investment in a group composed of thewhole company winners and the parent companiesof 18 subsidiary winners outperformed the S&P 500by about 3.8 to 1 (NIST, 2000).

Several European businesses had noted the benefitsthe the Deming and Baldrige Award processes hadconferred on many Japanese and American compa-nies, often actual or potential competitors. Conse-quently in 1988 fourteen European businesses formed

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the European Foundation for Quality Management(EFQM) including Bosch, Bull SA., Ciba-Geigy andFiat Auto. Ten years later membership had grown tomore than 700. The EFQM defines self-assessment asa comprehensive, systematic and regular review of

an organisations activities and results, referencedagainst a model of business excellence.....(This) pro-cess allows the organisation to discern clearly itsstrengths and areas in which improvements can bemade and culminates in planned improvementactions which are then monitored for progress(Anon, 1998, p. 7). The Business Excellence modeldeveloped and introduced in 1991 to promote thisapproach is also the basis for the European QualityAward whose winners include Rank Xerox, Millikenand Texas Instruments (Europe). Bernard Fournier(1996, p. 6) the CEO of Rank Xerox, the 1992 awardwinner and chairman of the 1996 judges panel is a

strong advocate of the award programme. He wrotethe true benefit..... comes not from winning but fromputting your company through the process. The pro-cess of systematic self-assessment, validated bytrained external examiners is a powerful learningexercise for any organisation, whatever its size andcomplexity or the nature of its products and markets.Many businesses use the model as a framework fromwhich to assess their operations with little or nothought of going for the award itself.

Models as Indicators of Quality andDrivers of Continuous Improvement

It is interesting to note that Fountain (1998) hasasserted that the majority of literature on self-assess-ment e.g. Porter and Tanner (1996) and van der Wiele(1995), proves that there is no best framework, onlyone which is appropriate, with the choice of modeloften dependent on the individual preference of theCEO. Bearing in mind the plethora of available off-the-shelf models, Fountain then goes on to askwhether it really matters which model is used. Hereports that a network of international quality man-agers evaluated in detail over 40 familiar and unfam-iliar models to assess what would make a world-wide best practice model. From their review theyderived what they call the Target Assessment modelthat they freely admit includes elements stolen frommany sources. The selected criteria embody assess-ment of people, leadership, empowerment, pro-cess control, change management, supplier develop-ment, business performance, customer perceptionand, finally, communication. How widely this hybridmodel will be adopted is a matter for conjecture.

Stone and Banks (1996) examined the contributionquality frameworks or models such as EFQM or Bal-drige have appeared to make in driving newmeasurement practices especially in the use of softmeasures i.e. those with a particular emphasis on


customers and employees. Forty-five companieswhom they claimed represented a highly strategicperspective of the UK Times top 500 were surveyedto assess the contribution which the use of the EFQMor Baldrige models made in driving new manage-

ment practice as distinct from the applicationeither of the philosophical approach laid down by thequality gurus or of no specific set of principles. Theyconcluded that, while the use of frameworks or mod-els seemed to have spurred measurement of cus-tomer and employee related activities, it guaranteedneither best practice nor improvement in internaltrends. The authors further commented that the mea-sures of quality their 45 companies had used fell intofive categories financial, operating, customerrelated, employee related and other. The businessstrategy in those companies just under half of theirsample who use, or had used, a quality framework

for measuring their quality levels was notably cus-tomer-focused. This contrasted with non-frameworkusers who favoured a financial focus. However,Stone and Banks (ibid) point out that a significantlyhigher number of framework users came from theTop 200 most profitable organisations. In their viewthis suggested a possible link between the adoptionand competent implementation of a frameworkapproach, e.g. EFQM or Baldrige and profitability.Gadd et al. (1996) have also reviewed the reasonsprompting organisations to use models for self-assessment. They concluded that this course of actionacted as a driver for the organisations continuous

improvement initiatives as well as enabling areas forimprovement to be identified.

Quality Initiatives from Failure toSuccess

Earlier in this paper we introduced some of the mod-els and frameworks promoted world-wide to encour-age organisations to develop successful qualityinitiatives and specified some well-known exemplars.Nevertheless, as we have pointed out earlier, there is

well documented evidence that some four out of fivequality or continuous improvement initiatives,entered into with high hopes, appear either to failcompletely to fulfil expectations or, more commonly,cause their sponsors disappointment or frustrationby yielding only limited improvements. Frequentlycompanies are left with the real feeling that the key tounlock more substantial benefits remains unturned.Some of the reasons for this state of affairs havealready been noted. But there may well be otherpossibilities, which may not be immediately appar-ent. It is also puzzling that, other than as an entryin a set of statistics compiled to present a generallypessimistic view ofquality initiatives, we have beenunable to find in the literature any systematic reviewreporting what has subsequently transpired in thoseorganisations whose first attempts to improve theirperformance have been unsuccessful.

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As an initial step aimed at widening study of theseissues we now describe the experiences of how threecompanies whose initial attempts at introducing andimplementing quality initiatives had enjoyed onlylimited success, succeeded in achieving major

improvements in performance at the second attempt.These cases suggest that initial failure, or only limitedimprovement, need be no bar to major progress oncethe reasons for the early problems have been ident-ified and resolved. In each of the cases we summarisethe companies concerned took their major step for-ward by following a structured approach employinga quality model framework to do so. One companyadopted the standard EFQM Excellence Model; theothers each developed bespoke models incorporatingperformance measures particularly appropriate totheir own circumstances.

Methodology

We have been interested in the methods organis-ations have adopted to improve their performancefollowing our studies of some 20 concerns located inScotland. Anxious to learn whether the issues thatemerged from these studies were equally relevantelsewhere in the UK and in continental Europe, weapproached seven global organisations whom weknew to support the aims of the EFQM. We askedwhether they had a significant improvement project

that we could study by visiting their company andinterviewing those involved. We intended to preparea case study from the information we gathered to beused for research and teaching purposes. The com-pleted case study would then be submitted to thecompany for review and comment. Althoughobtaining access took much longer than we hadexpected, at all the companies we eventually visitedwe were able to carry out in-depth, semi-structuredinterviews with a cross-section of employees. In car-rying out this work we gratefully acknowledge thefinancial support and interest of Quality ScotlandFoundation and the Institute of Management Ser-

vices. From the companies we studied we havechosen three to describe. They cover different sec-tors health, telecommunications and agrochem-icals. Our first case confirms the lack of successattending most quality initiatives; however it illus-trates how a bespoke performance improvementprogramme can be used to recover a failed initiativeand help create a quality-focused enterprise:

Organon Teknika at Cambridge

Organon Teknika is one of five companies that makeup the Pharma Group within the worldwide AkzoNobel organisation. The group employs some 3000people internationally of whom about 80 are basedat Cambridge. The company is organised into fourdivisions: Pharmaceutical, Microbiology, Haemo-


stasis and General Diagnostics; together with supportservices covering Technical, Secretarial, Financial andMarketing areas. The complex technical character-istics of the products and services that the companyoffers to a highly developed market demands meth-

odical management of its supply chain. This aspectof its operations is not only important in satisfyingits customers needs but also critical to the com-panys prosperity.

In the early nineties Organon had judged it importantnot only to improve their own performance but atthe same time to demonstrate to their customerswhat had been achieved and how it was to be evalu-ated. They chose to follow a quality agenda to doso. However the divisional managers were unable tocommit themselves wholly to the form of TQM thatthe company advocated at that time; the initiative

consequently failed.

Coincidentally, about the same time a support groupof Organons parent company Akzo Nobel had com-pleted the development of a performance improve-ment programme Managing Total Quality(1993) based on procedures which the consultants3M had originally devised and applied extensively toorganisations in the US Subsequently the Akzodepartment and 3M worked together to produce a bespoke version for the Akzo group. A pilot studyin early 1994 yielded sufficiently encouraging resultsfor the Managing Total Quality (MTQ) programme

to be applied throughout Organon. MTQ is foundedon four concepts termed Akzo Basic Cornerstones(ABCs) with which are associated ten Akzo BuildingBlocks (ABBs). The Cornerstones are ManagementCommitment, Conformance to Customer Expec-tations, Prevention and finally, Goal Setting andAchievement where the emphasis is quite specificallyon measurement and comparison with past results.Akzos ten Building Blocks comprise seven typicalcomponents of a quality initiative, viz., Leadership,Training, Customer Focus, Measurement, Communi-cation, Planning and Recognition along with threeothers which are rather distinctive Work=Process,

Organisation and Teamwork, and Projects (design,development and execution). MTQ defines Work=-Process as a sequence of actions and tasks whichresults in products or services for a customer, thesymbol bringing out their interlinking nature. Figure1 outlines how Organisation and Teamwork areestablished and reflected in the design, developmentand execution of projects:

At the heart of the approach which Teknika has nowadopted, the company each year prepares a QualityPlan (AQP) to translate into practical terms its Visionstatement that Superiority and Speed brings Sur-vival and Success. This is the mechanism by meansof which the companys in-house or local, strategyis developed and implemented. By specifying Areasfor Improvement in each sector of the company theplan facilitates the identification of Quality projects

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Figure 1 Organisation and Teamwork at Akzo Nobel

(Gilbert, 1993, p. 48)

to address the problems highlighted. Projects mayoriginate from many different sources; the depart-mental discussion groups held six times annuallybeing a major source. Once a project has been ident-ified, a project leader is designated and empoweredto carry it through. The leader then decides who elseis to be involved (personnel are normally involvedin no more than two projects simultaneously), whatthe project is to be called and what timescale is to be allowed for completion. The team begins with a brainstorming session at which it will set down allthe cognate issues, map their inter-relationship and

establish what can be immediately achieved. It willnext determine the pre-project situation againstwhich to evaluate the extent of the improvementsultimately brought about and set down what it hopesit will achieve and how its objectives are to beaccomplished. Action Points are then chosen and atimetable fixed.

After deciding what resources are required to carryout the project the team will specify, as far as it isable, measures against which its outcome can beassessed. Authorisation to proceed will be sought. Insetting team objectives the need to achieve consensus

is seen as important; individual input is valued andassumption of ownership deemed critical. The extentto which the plan has been successfully implementedis evaluated by measures, termed Evidences of Suc-cess, which the company then uses to gauge its pro-gress in tackling the issues pinpointed in the plan.These are single focus goals, which reflect legitimateand measurable achievements. Projects are scored by a company team and results well publicised fortheir positive impact on people.

A project from Organons Diagnostics Division illus-trates how the approach operates. In the 1998 AnnualQuality Plan for this division the first topic to beaddressed was to develop areas for improvement based on the results of the 1998 Sales Performanceand Tracking Survey. (The biennial survey preparedby independent Market Research consultants for the


company had stressed the importance of this topicand listed where action was required.)

Accordingly a Quality Improvement Project wasinitiated with the detailed remit to develop arrange-

ments to improve in four specific areas identified as:(a) clarification of call structure and follow-up, (b)style of communications, (c) clear delivery of infor-mation, (d) problem and query handling. The teamassigned to the project had five members fourfrom the divisional salesforce and was led by amember of the companys Steering Team. The successof the project was to be assessed by measuring foreach of the salespeople involved the extent ofimprovement, over a specified time period, in sixelements of their face-to-face customer negotiations.These were Communication Style, Call Structure,Explanation of call purpose, Agreement on next call

objectives, Summarising the call messages, and lastlyClarity of information presentation. The teamdecided that six field visits were to be made by eachsalesperson accompanied by the manager; the out-comes of each call would be scored by the managerto reflect whether the way in which these elementswere now being handled had improved and to whatextent. (Where a need for further improvement had been revealed this would also be noted and actedupon.) In his report on the completed project the div-isional manager commented that during the 24accompanied calls the issue of Problem/Query hand-ling had arisen so irregularly that it could not be

scored. With that single qualification the results forthe other three areas (a), (b) and (c) disclosed a satis-factory increase to maximum scores. The project hadtwo outcomes: the first being that the team amendedthe coaching plan to address the specific areas ident-ified for improvement, the second was that a lami-nated reminder card was prepared to prompt sales-people of the revised approach.

In this fresh initiative the company has applied sensi-tively and effectively the ABCs and ABBs of thebespoke MTQ model to introduce, manage and moni-tor the change process. Consequently two key con-

clusions about the real value of this method of resur-recting a failed improvement process can be drawn:

1. Teknika has identified, tackled and resolved projects of real importance to the companys well-being. These have originated from many differentsources, external as well as internal. The fact thatemployees at every level throughout the companyare able to participate in project teams and areenthused by so doing, is an important element increating a notably high level of job satisfaction.

2. The way the Quality Plan is used, firstly to setdown the companys strategy and later on, as theprime means of implementing the companysobjectives is both revealing and unusual. Evi-dences of Success enable the extent of attainmentto be quantified and appropriate action to betaken, perhaps by way of a project, where prob-

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lems have arisen. It is interesting that, in someinstances, after four years these may no longerreflect the current interests of the organisation.Though it is important to have continuity inmeasurement, this can sometimes be at the

expense of relevance.

Nortel the Ulster Plant

Our second case illustrates how the Ulster plant ofNortel at Monkstown uses the standard EFQM modelas the major motivator in the fresh approach to per-formance improvement it adopted in the mid ninet-ies. The factory has been manufacturing andexporting telecommunications, transmission accessand switching systems for some 38 years. Its currentowners acquired the factory from STC in 1991 sincewhen it has become the companys manufacturing base for European Standards (ETSI) transmissionproducts, exporting to some 63 countries andemploying about 1000 people to do so. The plant hasconsolidated its position over the past few years notmerely because it is seen as the kind of manufactur-ing enterprise Ulster is keen to encourage or becauseit is able to recruit graduates and school leavers froma highly educated pool. Monkstown has prospered inthe face of strong competition because of the strongcommitment within the organisation to improvingprocesses to make the plant as competitive as poss-ible. The workforce, used to repeated lay-offs fromthe plants STC days, has responded positively tothese fresh initiatives to establish the site as a pro-gressive, supportive work environment. Moreoverexternally commissioned employee surveys confirmthe high satisfaction levels which the companybelieves parallel the results from their surveys of cus-tomer satisfaction. Even so, in the kind of high-techindustry in which Nortel operates, quality is not seenas a specific differentiator since no company offeringsub-standard products and services could survive.Total quality control is, therefore, assumed to be inplace and ways of improving the whole process froma customer perspective dominate thinking.

Nortels early attempts to improve performance in1992/3 had been unsuccessful though some trainingwas given in team working and, to a limited extent,in the use of problem-solving tools and techniques.Only when they were seen as an integral element ofthe companys strategy did performance improve-ment initiatives appear relevant; this came aboutsome two years later with the adoption world-wide by Nortel of the EFQM Business Excellence model.Though Nortel as a global organisation is known tobe very keen on self-assessment, Monkstown did notinitially use the model for this purpose; rather theyevaluated it as a tool beginning by using it to shapetheir own strategy and subsequently to forge theirown framework for changing how they operated. In1996, when Nortel decided to adopt the EFQM model


(Figure 2) as their framework for self-assessment, thethen EFQM guideline publication asserted that Cus-tomer Satisfaction, People (employee) Satisfactionand Impact on Society are achieved through Leader-ship driving Policy and Strategy, People Manage-

ment, Resources and Processes, leading ultimately toexcellence in Business Results.

This version has been superseded by a very similarmodel following a recent review; as a consequencePeople Management has been shortened to Peoplewhile Resources has become Partnership andResources. The results criteria have been renamed People Results, Customer Results, Society Resultsand Key Performance Results.

The model requires organisations undertaking self-assessment, or making an award submission, to

address searching questions of themselves, e.g. underLeadership, the first of the Enabler criteria, the organ-isation is asked just how the behaviour and actionsof the executive team inspire, support and promotea culture of TQM. Similarly the Results criteria seekprecise information about what the organisation isachieving, for example, in relation to the satisfactionof its Customers and of its own People (employees).The final Results criterion assesses the extent towhich the organisation has attained the financial andother objectives it has set itself, couched in the broad-est terms. A scoring process, administered internally,is used to evaluate how well the organisation

matches up to the criteria specifications. Indepen-dently appointed and trained assessors are used to judge submissions for external quality awards.

Nortel makes particular use of the EFQM model asa framework to help it give the desired emphasis onstrategic and HR issues, specifically how to involveemployees in the process of strategic planning, pre-viously an area of weakness. Major changes in pro-moting performance improvement initiatives havealso emerged from the meetings that the CEO holdswith all levels of staff three times annually. At thesehe discusses the direction that the company should

take and, in particular, considers its future perform-ance targets. This stands in vivid contrast with theposition in 1992/3 when fewer than half theemployees were involved in improvement activities.Nortel has explicitly selected the EFQM rather thanthe US Baldrige model to compare performanceacross the criteria in each of its plants worldwide; itbelieves that in this way individual strengths can best be exploited and areas for improvement identifiedand confronted. As well as achieving measurableimprovements in performance the plant has regularlybettered its score against the model which the com-pany has also used to develop its senior managementteam by requiring each to take ownership of one ofthe nine criteria. The model and scoring method arewell understood throughout the company such thatissues emerging in assessment figure in the four-monthly briefing sessions with the whole workforce.

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Figure 2 The EFQM Model of Business Excellence (Anon, 1998)

Not only does this help to transmit the right mess-ages; it also enables improved performance to receiveappropriate recognition locally.

The use of the EFQM model as a framework for driv-ing performance improvement is evident through-

out the plant starting with the example of leadershipset especially at chief executive level. This has beena major influence in helping to create the necessaryenvironment within which a people-oriented culturechange can be developed and flourish. The CEO hasfurther encouraged this by communicating to thewhole workforce face-to-face all relevant businessinformation, and by answering queries from themfully and frankly. He does this in a variety of ways.Not only is he very visible about the plant; he alsoholds regular Town Hall meetings when he wel-comes questions from anyone. If he doesnt know theanswer on the spot the query is logged, investigated

and answered. In these ways sceptical employee atti-tudes towards improvement initiatives and theplants future have been addressed and the feelingsof insecurity which pervaded the plant in its STCdays allayed.

Symbolic of the change in the organisations culturehas been the razing of the externally-located separateoffice tower occupied by the senior executives andtheir relocation to offices within the plant. Only eightor nine of these have separate, but glass-windowed,offices. A further major element in the change processwas the decision to move from the previous nine-

layered functional structure to one which has justfour. There are now only three layers below the sitechief executive. Below him are the production man-agers under whom are the team leaders who functionas coach/facilitators. This radical change has com-municated that Nortel wished to stimulate teamworking within and across functional boundaries.

The company has also changed its emphasis towardsreleasing the full potential of its people, demon-strated by the inclusion in the companys thrice-yearly strategic review of the mechanisms throughwhich this is to be brought about and monitored.Selection and training of team leaders is carried outwith great care and is as comprehensive as the taskrequires concentrating on effective communicationand feedback. The Production Control Team, forexample, has ten members, six shop floor and four


staff. At their weekly meeting, which any staff member may take, discussion centres on performancefeedback. Members, who really do believe theybelong to a team, are highly task-focused and willfreely raise any problems that they themselves can-not resolve.

In accepting personal development as a key featureof its policy Nortel has encouraged fresh thinkingwhich in turn acts as a change agent. Thus a shopfloor employee with nothing more than school edu-cation was sent out to Singapore where he success-fully developed a new distribution system. Thismethod of handling a problem while at the same timeencouraging the individual to enlarge his horizonsrepresents a marked change from STC days. Likewisearrangements were made for a team leader about tomove to a post in purchasing to take a B.Tech. coursein Business and Finance so that she could familiarise

herself with the appropriate data base and ultimatelycontribute more effectively in her new role.

Because the chief executive is heavily committed tostrategic change he has encouraged 30 per cent of hispeople to include in their work an element relatingto strategy, the overall objective being to use this toachieve a degree of cultural change. This has beeninterpreted and developed through the concept ofcommon processes. Fifty have been identified, sometwenty being labelled as major. Their improvementis seen as an important outlet to which otherwisefrustrated employees can contribute ideas by becom-

ing involved with a change group. Membership ofthe groups themselves changes; responsibility forcustomer satisfaction rotates between two of thesenior management team.

The establishment and consolidation of a closerelationship between customer and people satisfac-tion began with careful identification of customerrequirements, internal as well as external. Some 200employees now have customer orders as the majorfocus for their work as distinct from the past whenvirtually only those personnel engaged in distri-bution were involved. One of the ways this has beenbrought about has been to move back within the pro-cess the decoupling point where the productbecomes specifically for one customer; Assembly andTest areas in the plant are laid out to give the appro-priate emphasis. Furthermore the operational plan-

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ning process focuses strongly on customers who arerepresented by four lines of business and by accountteams. This framework handles issues such as allo-cation of research and development resources, per-formance measurement and the impact of legislation.

The line of business ensures that senior manage-ment in functional positions is fully aware of, andcan properly address customer requirements. Theaccount team, assigned on a regional basis, rep-resents the direct interface with the customer.

Customer satisfaction surveys are regularly carriedout by independent agencies; these cover basic qual-ity issues, e.g. Delivery/Hardware Quality, Post-installation support, and Warranty and Repair time.Information gathered from these is used along withother measures such as Loyalty and Retention aselements for the agenda at Customer Satisfaction

workshops. At one of these, 24 elements were ident-ified which could provide a customer with a betterdelivery service. As a consequence 90 per cent of allorders now reach Distribution on the planned datein contrast to the past when only 25 per cent did so.The measure of on time delivery does not nowreflect when the product reaches Distribution as hadbeen the case, but when delivery actually occurs.

The Monkstown plant won the Northern IrelandQuality award in 1997. In 1998 it was one of twomajor winners in the UK Quality Award for compa-nies with more than 250 employees.

Our final case describes how an agro-chemical mix-ing and packaging unit with an uncertain future role,responded positively to the need for improved per-formance by developing and implementing its ownin-house initiative.

Zeneca plc the Yalding Unit

Zeneca group plc had appeared in 1993 followingICIs decision to split off its advanced pharmaceut-ical and agrochemical businesses from its traditional

chemical operations. In April 1999 Zeneca combinedwith the Swedish group Astra AB to form AstraZ-eneca which subsequently merged its agro-chemical business with the agrochemicals and seeds oper-ations of Novartis in November 2000 to create Syng-enta, one of the first global dedicated agribusinesses.

At the time of our study Zeneca plc. operated in threebusiness areas: pharmaceuticals, agrochemicals andspecialities. The agrochemical sector, one unit ofwhich was the focus of our work, has a strongresearch emphasis exemplified by the success of Ami-star, launched in 1997. By 1999 it had become theworlds leading proprietary fungicide. The companyis also equally concerned with the effectiveness withwhich it uses its assets, particularly working capitalin the form of stocks. But in 1994/5 a board edict toreduce stocks, then unacceptably high, happened to


coincide with an increase in sales. Unsurprisingly,the business found itself struggling to provide a satis-factory level of service, not made any easier when anew ERP system was introduced in 1995/6 through-out Zeneca plc. Its implementation was complicated

by a serious loss of product and customer data. Atthe same time market growth had generated highervolume sales in greater variety coupled with a morecomplex range of package types and by the Amistarlaunch. The Yalding packaging and distribution unitwas at the heart of the action taken to deal with thissituation. As it had also been involved in initiatingand carrying through an improvement project itoffered an interesting and worthwhile subject forstudy.

Re-organisation of European process operations hadresulted in the rationalisation of mixing and packing

activities now consolidated at two large units onebeing Yalding in Kent. This key role was assigned toYalding despite some misgivings. The unitresponded positively to this challenge by inaugurat-ing the Yalding Improvement Plan (YIP) aimed atimproving performance whilst simultaneously ensur-ing that current standards were at least maintained.

The position of Quality Management in ZenecasAgrochemical operations is an important element inoutlining the context to the conception, developmentand implementation of the Yalding ImprovementPlan. Until 1986 the company had supervised quality

using traditional Quality Control (QC) methods. Inthat year they began to consider introducing a Qual-ity Assurance (QA) approach based on developingtheir own standards with a strong emphasis on pre-vention. This happened to coincide with a consultant-facilitated initiative to implement TQM. Though thebenefits of this approach were recognised it was onlypatchily implemented and not beyond Yalding.TQM as a separate initiative was not pursued; inevi-tably QA thinking suffered. Some worthwhile fea-tures of the TQM facilitation process still remain e.g.rather than having to send samples to the central lab-oratory, the proposal by plant operatives that they

do their own testing and so eliminate delay in testresults was accepted and is still in place. In the earlynineties some elements of QA were re-introduced asthe company sought to secure ISO 9000 seriesaccreditation; ISO 9002 was achieved world-wide in1997. Current QA activities centre round redesigninginternal audit standards so that these meet or exceedthose set by ISO 9002. The QA function for the wholeagrochemicals business is located at Yalding. The siteQC unit is also responsible for Safety, Health andEnvironment issues.

The Yalding Improvement Plan YIPLaunched on 1 November 1996, this was linked tothe Yalding 1997 Plan (Figure 3). One of its primeaims was to achieve a degree of focus that may have

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Figure 3 The Yalding Improvement Plan

been absent in the past perhaps the origin of com-ments that the organisation was rich in ideas andinitiatives but whose full potential was seldomrealised. Its objectives were firstly, to deliverimproved Customer Service, and in doing so toachieve improved credibility; secondly, to maintainor improve Standards of Operation and, finally, todevelop action aimed at Continuous Improvement.

YIP was perceived as part of a change processencompassing the whole site. It required the estab-lishment of a Project Team to involve all staff from

the start in generating their own improvement plans.Each team member had to commit both as an individ-ual and as a team member. This approach marked amajor cultural change. Traditionally, as part of thechemical industry, scientists and engineers havetended to develop and operate processes with a fairdegree of authoritarianism. Sometimes this hadmeant that satisfying the customer had not been atop priority! The innovative approach was topdowndirected; its aim was to be the establishment of com-mon levels and measures of performance and theirtranslation into specific actions for improvement.Each department was required to present its own

improvement plan to the business director.

YIP enabled staff to focus on OTIF, or the supply ofevery order On Time in Full, as a set of common mea-sures which were relatively straightforward to moni-tor. The target figures for this particular measurewere 95 per cent leaving the Yalding site and 75 percent for the National Selling Companies. These werenot met in the first few months for reasons associatedwith the introduction of the new ERP software sys-tem. While the full management team participated indeveloping measures for the whole site, individualsections devised measures which they decided wereappropriate for their own departmental purposes.The way these measures were developed set the tonefor the project, with management emphasisingmaximum people involvement. Eight common meas-ures were agreed to enable OTIF and Site Export


Order Quality Performance to be determined for thewhole site. The first six were:

Section OTIF Filled Pack Quality Checks

Software system stock accuracy Routing accuracy Number of customer complaints Routing efficiency

There were also two material management measuresconcerned with stock accuracy. On the twelfth ofeach month the results for the preceding month weredisplayed on 22 boards located throughout the fac-tory.

To make the YIP concept real, the team had to agreeon the crucial areas demanding attention. Communi-

cation was immediately identified as one, parti-cularly as a workforce survey revealed that halfclaimed they had at no time received any informationdirectly from management. Lack of responsiveness ofthe Yalding site to the marketplace was the secondarea to be addressed. The third focused on the unsat-isfactory site materials handling arrangements whichthe company tackled by putting these operations outto tender in association with external logistics oper-ations. (The successful firm now removes the pal-letised product from the end of the production lineand distributes it in accordance with customerrequirements, an operation it claims to carry out in

partnership with Zeneca. Unsurprisingly, thisarrangement initially generated some hostility fromemployees whose jobs were now handled bycontractors).

The introduction of YIP required the adoption of afresh approach to people management, particularlyin identifying potential and in enhancing individualskills. In a departure from the seniority-based systemwhich had long determined promotion and pro-gression, a skills matrix was developed whichenabled individuals to add to their expertise and soattain higher skill levels. This enabled them to carry

out more complex, responsible and highly paid tasksand was seen as a key element in the individualsself-fulfilment. The routes by which this could beaccomplished were thoroughly explained to thewhole workforce. YIP was well and widely publi-cised and several ingenious ways of promoting theattainment of its objectives devised. e.g:

A team-based short-term incentive scheme basedon OTIF was introduced to inject the necessaryemphasis. Though two teams (out of seven) wereunable to attain the targets they had been set,none-the-less one of these still succeeded indelighting its customers.

Recognition of target achievement was given by asurprise Saturday marquee jazz party organised by management after a careful audit confirmedthat the target set had been attained.

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A bulletin with workforce input showing cel-ebrities as staff noted in a humorous way memor-able milestones along the road to success.

A further illustration of the major change in Yalding

culture concerns the new Amistar line. Before thiswas set up the workforce were given the opportunityof suggesting how this should be done. The table onwhich these were to be placed was submerged insuggestions! As a result the old, and out-moded,suggestion scheme was replaced by a more effectiveand relevant arrangement.

The problem of ineffective communication identifiedby a staff survey led to set mechanisms being put inplace to ensure that people are kept fully informed.These include quarterly meetings with the wholeworkforce a sizeable commitment since six meet-

ings are needed to cover everyone. Individual workgroups review their performance weekly. The per-formance targets and monthly achievement boardsthroughout the site also address this. Progresstowards attainment of objectives generated throughindividual team efforts is regularly reported in per-son to the business director. Listening by seniormanagement to what people really have to say dur-ing the performance review has over 18 monthshalved process absence rates at Yalding. Positivefeedback from customers on service levels has beenreported and is publicised in the ManufacturingMonitor bulletin. In January 1997 the Yalding site

achieved Investors in People recognition.

Discussion and Conclusions

We have found it useful to consider these three casestudies at two levels. At a practical level the threeorganisations whose experiences in seeking toimprove their performance we have brieflydescribed, determined that change was essentialbecause (1) their early initiatives aimed at achievingexcellence by adopting the concept of Total Quality

Management had not succeeded to the extentexpected nor had they produced the tangible benefitsenvisaged, (2) levels of customer and/or employeesatisfaction were unacceptable, (3) employee satisfac-tion studies had drawn attention to issues of leader-ship, work content and how effectively and imaginat-ively people were being used, (4) the communicationskills required to present the organisations percep-tion of the way forward were inadequate, (5) therewas more than a hint of vulnerability that unlesstheir performance was improved, they might not sur-vive either as a company or as a separate entitywithin a larger organisation.

At a somewhat deeper level, more exacting analysisreveals further aspects of the approaches taken byeach organisation. For example, it is noteworthy thatthe strategies which Organon Teknika adopted


reshaping the culture, motivating the workforce,making teamworking function productively and,through more effective management, implementinga total quality philosophy are equally apparent in both Nortel and Zeneca. They are consistent with

Mintzberg (1978) who portrays strategy as a recog-nisable pattern in a stream of decisions, developingthis concept further (Mintzberg and Waters, 1985)when he points out that the analysis of a singledecision is inadequate to explain the strategyadopted by any given organisation. Rather, thisshould be considered in the context of severaldecisions and the extent to which these are consistentwith each other. Covin (1991) extends these ideaswhen he suggests that a firms strategy characterisesits competitive orientation and endorses its concep-tualisation as a pattern of business related decisions.

However, it is worth pointing out that the strategieswhich Teknika successfully implemented had beenheavily influenced by the MTQ initiative sponsored by Teknikas parent, Akzo Nobel. It is therefore sur-prising that the Teknika unit at Cambridge was oneof only a few Akzo Nobel sites to adopt MTQ. Onthe other hand, Nortel at Monkstown is only one ofseveral units within the Nortel family where weunderstand what are essentially the same strategieshave been implemented. This has suggested to usthat there may be several levels within an organis-ation at each of which a distinctive strategy may beconstructively, yet legitimately, developed and which

is aimed at attaining objectives that are specific to thesubsidiary unit concerned, but which does not con-flict with those of the parent organisation. At Tek-nika, the prime objective had been to improve theperformance of the company; the strategy was to usea particular model of TQM to do so. This experienceechoes that of the Commercial Nuclear Fuel Divisionof Westinghouse whom Ross (1994, p. 90) describesas having discovered that the total quality conceptmust be viewed as a pervasive operating strategy formanaging a business every day. So too at Zenecawhere a survival strategy based on Yaldings modelof TQM, i.e. YIP, was adopted. YIP was designed for

the Yalding site and was singularly appropriate tothe time and location. While we were there manage-ment was wrestling with the idea of YIP2 perhapsa comment on the sustainability of YIP as animprovement driver.

For Teknika and Nortel it is evident that the processof learning from the failures of the past played animportant part in enabling an approach to emergewhich was sufficiently persuasive to win over whatwas likely to have been a sceptical workforce. Thishas echoes of Quinns concept of Logical Incremen-talism (Quinn, 1980) and with that feature of Mintz-bergs Learning School whereby all the members ofthe organisation are encouraged to facilitate theemergence of a consensus approach both in the for-mulation and implementation of an appropriatestrategy.

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Mintzberg et al. (1998) has prescribed how LogicalIncrementalism (1982) can be applied in practice examples of which we find realised in our cases,namely:

Build credibility by changing symbols. Nortel razedtheir highly visible but separate office tower relo-cating those executives who still required individ-ual offices to facilities within the appropriatedepartment.

Legitimise new viewpoints. Teknika developed cross-functional teams to examine Areas for Improve-ment identified by several different sources, one being the departmental work group as didZeneca at Yalding. Nortels Production ControlTeam has ten members, six shop floor and fourstaff. Any member may take the weekly meetingwhich has a strong emphasis on performance feed-

back; problems that cannot be resolved within theteam are highlighted for action. Broaden political support. As pointed out in the case

detail, the Nortel CEO develops this in severalways. For example, he regularly reports to thewhole workforce face-to-face all relevant businessinformation and answers queries comprehensivelyand frankly. Where he cannot give an immediateanswer, he makes sure that the question isresponded to promptly. By practising manage-ment by walking about he does much to combatscepticism. The Yalding site manager adopts asimilar approach to communicate with his people.

Indeed, listening to what they have to say hashalved absence rates over an 18 month period. Engage in continuous change. Nortel argues that it

is committed to continuous change interpretedthrough the medium ofcommon processes. Theirimprovement is seen as an important outlet towhich otherwise frustrated employees can contrib-ute ideas through becoming involved with achange group. The YIP shows similar commit-ment with its development of a set of commonmeasures.

Finally, we noted that, while in each of the organis-

ations studied their early initiatives aimed at improv-ing performance had been unsuccessful, some of thequality-associated procedures that had been intro-duced at the outset were still in place.

It is clear that the Excellence models which each ofthe companies developed and/or used for theirsecond attempt to improve had not only providedthe necessary framework for enhancing performance but enabled this to be brought about. Though theAkzo MTQ and the EFQM models have beendesigned to evolve as the assessment process maturesover time and thus can be applied to most circum-stances where measurement of organisational per-formance is required, this is unlikely to be the casewith Zenecas YIP. Whilst this had been developedto meet what the Yalding unit saw as the frameworkthat best met their needs at the time and, like all good


models of this type, incorporated adequate currentperformance measures it appears to have two majorshortcomings. The first is that their yardsticks are sospecific to Yalding that benchmarking comparisonswith other units are unlikely to be practicable. The

second is that the resource required to continue withthe development of YIP2 is unlikely to be cost effec-tive bearing in mind the relatively limited scale ofthe Yalding operation.

In all our studies on performance improvement wehave been struck by the number of organisationsseemingly well motivated to change but whoseattempts to do so had achieved only limited success.Study of the literature revealed that this was com-monplace and, moreover, was demotivating,undermining some of the ideas of TQM and alienat-ing people from participating in improvement activi-

ties. This paper suggests that the use of quality mod-els as frameworks can be of material assistance inrehabilitating quality improvements despite previousfailures and describes two cases where these freshinitiatives were sustained. All three of our cases sup-port Fountains (ibid) assertion that the specificframework employed is not critical.

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ALASDAIR MACLEOD, LYNNE BAXTER, SchoolSchool of Management, of Management, Heriott- Heriott-Watt University, Watt University, Riccarton,Riccarton, Edinburgh Edinburgh EH14 4AS. E-EH14 4AS. mail: [email protected]

Alasdair MacLeod is Honor- Dr Lynne Baxter is Lecturerary Research Fellow in the in Operations ManagementSchool of Management at at Heriott-Watt University Heriott-Watt University. A and co-founder of a spin-off former manager at ICI, as consultancy company. Shepart of his current research researches into business per-

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