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European Management Journal Vol. 19, No. 4, pp. 392403, 2001 2001 Published by Elsevier Science Ltd Printed in Great Britain S0263-2373(01)00042-1 0263-2373/01 $20.00 + 0.00

The Contribution of Business Excellence Models in Restoring Failed Improvement Initiatives

ALASDAIR 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 prosperity with the failure reported by some four out of every ve organisations to achieve the expected outcome from Total Quality Management (TQM) initiatives; the development and role of Quality Awards and Models in stimulating the attainment of improved quality levels world-wide is assessed. Three industrial case studies demonstrate how the discerning application of a quality model standard or bespoke can facilitate the resurrection of an initially ineffective performance improvement initiative. 2001 Published by Elsevier Science Ltd. Keywords: Performance improvement, Total Quality Management, Quality models, Implementation, Case studies, Failed initiatives, Culture change Despite the enthusiasm shown for the approach and well-publicised reports of successful applications there exist substantial data conrming the failure of some 80 per cent of Total Quality Management (TQM.) initiatives to achieve the expected outcomes (Whyte and Witcher, 1992; Kearney, 1992). Typical explanations applying to those organisations who claimed to have introduced quality programmes but reported no improvement in performance cite excessive internal focus, the absence of a clear link to customers or business results, ingrained attitudes, lack of time, or resources, or understanding. Wilkinson et al. (1998) have summarised the outcomes of four further European studies carried out in the early nineties to examine the effectiveness of TQM. In reinforcing the criticisms of the Durham report, the Ashridge/EIU study (Binney, 1992) reached two main conclusions. Firstly, rigid pre-determined TQ programmes, particularly when imposed from outside the organisation, do not work. Secondly, companies, which have gone farthest in applying Total Quality, have never had a TQ programme in them TQ has developed organically. These comments are rather echoed by Beer who points out that quality initiatives fail because they are delegated by top management to staff groups, the human resource function or a quality function. A London Business School study by Cruise OBrien and Voss (1992) concluded that the 42 organisations asked to self-evaluate against the US Baldrige model criteria performed poorly. In their view these busiEuropean Management Journal Vol. 19, No. 4, pp. 392403, August 2001

Most Quality Initiatives are Unsuccessful

According to Beaumont et al. (1994), typical Total Quality Management (TQM) implementation procedures will involve continuous problem-solving activities incorporating work-place teams, a quality structure to give focus to the approach, statistical control and measurement of quality components, identication of customers (internal and external), the whole supported by extensive training.
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nesses were a considerable distance from achieving total quality. However the fth study, by Zairi et al. (1994) expressed a more positive view. Their survey of externally documented information covering 29 companies noted that, over a ve-year span, aboveaverage industry performance was demonstrated for each of the indicators chosen by the authors. The nal study by Wilkinson et al. (1993) records the responses to a postal self-completion questionnaire sent to 4000 members of the then British Institute of Management; just 9 per cent of the 880 respondents claimed their experience of TQ to be very successful. Ahire et al. (1998) present another aspect of the issue in their survey of the American situation from which it is evident that many companies claim to be cautious about implementing TQM fearing that to do so half-heartedly would not lead to any worthwhile improvement in quality. Though their analysis of 359 rms which have fully or partially implemented TQM does bring out that even partial implementation can produce positive results, nevertheless their study concludes that companies should only fully implement TQM if they possess all the theoretical constructs needed to ensure its success. These ndings reinforce the evidence from earlier surveys carried out by the consultants A.D. Little and McKinsey and quoted by Senge in his 1993 address to the American Society of Quality Control (ASQC) annual conference. Senge reported that, of 500 TQM companies surveyed less than one-third were accomplishing anything. Moreover two-thirds of the TQM programmes had ground to a halt. However Easton and Jarrell (1998) examined the change in the corporate performance of 108 US rms that had begun implementing Total Quality Management (TQM) between 1981 and 1991. Their empirical study revealed that performance, measured by both accounting variables and stock returns, had been improved in those rms that had implemented TQM.

companies which are recognised as having applied Company-Wide Quality Control (TQM in the West) based on statistical quality control and which are likely to keep up with it in the future (Evans and Lindsay, 1993, p. 112). Winners over the years have included Toyota Motor Company, NEC IC/Microcomputer Systems and Florida Power and Light (prior to 1984 entry had been conned to Japanese companies). In the USA, concern about the decline in American productivity and loss of competitive edge in the early 1980s had prompted President Reagan to sponsor a series of study conferences to examine why this was happening. Their nal report recommended that a National Quality Award similar to the Deming Prize in Japan be awarded to those rms that successfully challenge and meet the award requirements. These and the accompanying process should be very similar to the Deming Award to be effective(ibid, p. 113). Consequently the US Senate instituted the Baldrige Award in August 1987. It aims to promote awareness of quality as an increasingly important factor in competitiveness, to develop understanding of what is required to achieve performance excellence, to share information on strategies that have been successful in improving performance and to emphasise the advantages their successful implementation confers. Only US companies may compete for this award which 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 US Commerce Departments National Institute of Standards and Technology (NIST) has prepared a Baldrige Index a ctitious stock fund made up of publicly traded US companies that have received the Baldrige Award. NIST invested a hypothetical $1000 in each of the whole company winners since that time ADAC Laboratories, Eastman Chemical Company, Federal Express Corporation, Motorola Inc. and Solectron. The notional investments were tracked from the rst business day of the month following the announcement of award recipients up to 1 December 1999, making adjustments as appropriate for stock splits. Another hypothetical $1000 was invested in the Standard & Poors 500 for the same time period. NIST found in this sixth annual study that the group of whole company winners outperformed the S&P 500 by 4.8 to 1, achieving a 1101 per cent return on the theoretical investment compared to a 228 per cent return for the S&P 500. A similar hypothetical investment in a group composed of the whole company winners and the parent companies of 18 subsidiary winners outperformed the S&P 500 by about 3.8 to 1 (NIST, 2000). Several European businesses had noted the benets the the Deming and Baldrige Award processes had conferred on many Japanese and American companies, often actual or potential competitors. Consequently in 1988 fourteen European businesses formed
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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 you are speaking about and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind. Accordingly, in the effective implementation of TQM measurement of performance based on self-assessment is perceived as essential. Emphasis on this approach lies at the heart of the major quality awards and models that have been developed over the past 50 years. The purpose of the Deming Prize, sponsored since 1951 by the Japanese Union of Scientists and Engineers (J.U.S.E.), is to award prizes to those
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the European Foundation for Quality Management (EFQM) including Bosch, Bull SA., Ciba-Geigy and Fiat Auto. Ten years later membership had grown to more than 700. The EFQM denes self-assessment as a comprehensive, systematic and regular review of an organisations activities and results, referenced against a model of business excellence.....(This) process allows the organisation to discern clearly its strengths and areas in which improvements can be made and culminates in planned improvement actions which are then monitored for progress (Anon, 1998, p. 7). The Business Excellence model developed and introduced in 1991 to promote this approach is also the basis for the European Quality Award whose winners include Rank Xerox, Milliken and Texas Instruments (Europe). Bernard Fournier (1996, p. 6) the CEO of Rank Xerox, the 1992 award winner and chairman of the 1996 judges panel is a strong advocate of the award programme. He wrote the true benet..... comes not from winning but from putting your company through the process. The process of systematic self-assessment, validated by trained external examiners is a powerful learning exercise for any organisation, whatever its size and complexity or the nature of its products and markets. Many businesses use the model as a framework from which to assess their operations with little or no thought of going for the award itself.

Models as Indicators of Quality and Drivers of Continuous Improvement

It is interesting to note that Fountain (1998) has asserted that the majority of literature on self-assessment e.g. Porter and Tanner (1996) and van der Wiele (1995), proves that there is no best framework, only one which is appropriate, with the choice of model often dependent on the individual preference of the CEO. Bearing in mind the plethora of available offthe-shelf models, Fountain then goes on to ask whether it really matters which model is used. He reports that a network of international quality managers evaluated in detail over 40 familiar and unfamiliar models to assess what would make a worldwide best practice model. From their review they derived what they call the Target Assessment model that they freely admit includes elements stolen from many sources. The selected criteria embody assessment of people, leadership, empowerment, process control, change management, supplier development, business performance, customer perception and, nally, communication. How widely this hybrid model will be adopted is a matter for conjecture. Stone and Banks (1996) examined the contribution quality frameworks or models such as EFQM or Baldrige have appeared to make in driving new measurement practices especially in the use of soft measures i.e. those with a particular emphasis on
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customers and employees. Forty-ve companies whom they claimed represented a highly strategic perspective of the UK Times top 500 were surveyed to assess the contribution which the use of the EFQM or Baldrige models made in driving new management practice as distinct from the application either of the philosophical approach laid down by the quality gurus or of no specic set of principles. They concluded that, while the use of frameworks or models seemed to have spurred measurement of customer and employee related activities, it guaranteed neither best practice nor improvement in internal trends. The authors further commented that the measures of quality their 45 companies had used fell into ve categories nancial, operating, customer related, employee related and other. The business strategy in those companies just under half of their sample who use, or had used, a quality framework for measuring their quality levels was notably customer-focused. This contrasted with non-framework users who favoured a nancial focus. However, Stone and Banks (ibid) point out that a signicantly higher number of framework users came from the Top 200 most protable organisations. In their view this suggested a possible link between the adoption and competent implementation of a framework approach, e.g. EFQM or Baldrige and protability. Gadd et al. (1996) have also reviewed the reasons prompting organisations to use models for selfassessment. They concluded that this course of action acted as a driver for the organisations continuous improvement initiatives as well as enabling areas for improvement to be identied.

Quality Initiatives from Failure to Success

Earlier in this paper we introduced some of the models and frameworks promoted world-wide to encourage organisations to develop successful quality initiatives and specied some well-known exemplars. Nevertheless, as we have pointed out earlier, there is well documented evidence that some four out of ve quality or continuous improvement initiatives, entered into with high hopes, appear either to fail completely to full expectations or, more commonly, cause their sponsors disappointment or frustration by yielding only limited improvements. Frequently companies are left with the real feeling that the key to unlock more substantial benets remains unturned. Some of the reasons for this state of affairs have already been noted. But there may well be other possibilities, which may not be immediately apparent. It is also puzzling that, other than as an entry in a set of statistics compiled to present a generally pessimistic view of quality initiatives, we have been unable to nd in the literature any systematic review reporting what has subsequently transpired in those organisations whose rst attempts to improve their performance have been unsuccessful.
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As an initial step aimed at widening study of these issues we now describe the experiences of how three companies whose initial attempts at introducing and implementing quality initiatives had enjoyed only limited success, succeeded in achieving major improvements in performance at the second attempt. These cases suggest that initial failure, or only limited improvement, need be no bar to major progress once the reasons for the early problems have been identied and resolved. In each of the cases we summarise the companies concerned took their major step forward by following a structured approach employing a quality model framework to do so. One company adopted the standard EFQM Excellence Model; the others each developed bespoke models incorporating performance measures particularly appropriate to their own circumstances.

stasis and General Diagnostics; together with support services covering Technical, Secretarial, Financial and Marketing areas. The complex technical characteristics of the products and services that the company offers to a highly developed market demands methodical management of its supply chain. This aspect of its operations is not only important in satisfying its customers needs but also critical to the companys prosperity. In the early nineties Organon had judged it important not only to improve their own performance but at the same time to demonstrate to their customers what had been achieved and how it was to be evaluated. They chose to follow a quality agenda to do so. However the divisional managers were unable to commit themselves wholly to the form of TQM that the company advocated at that time; the initiative consequently failed. Coincidentally, about the same time a support group of Organons parent company Akzo Nobel had completed the development of a performance improvement programme Managing Total Quality (1993) based on procedures which the consultants 3M had originally devised and applied extensively to organisations in the US Subsequently the Akzo department and 3M worked together to produce a bespoke version for the Akzo group. A pilot study in early 1994 yielded sufciently encouraging results for the Managing Total Quality (MTQ) programme to be applied throughout Organon. MTQ is founded on four concepts termed Akzo Basic Cornerstones (ABCs) with which are associated ten Akzo Building Blocks (ABBs). The Cornerstones are Management Commitment, Conformance to Customer Expectations, Prevention and nally, Goal Setting and Achievement where the emphasis is quite specically on measurement and comparison with past results. Akzos ten Building Blocks comprise seven typical components of a quality initiative, viz., Leadership, Training, Customer Focus, Measurement, Communication, Planning and Recognition along with three others which are rather distinctive Work=Process, Organisation and Teamwork, and Projects (design, development and execution). MTQ denes Work=Process as a sequence of actions and tasks which results in products or services for a customer, the symbol bringing out their interlinking nature. Figure 1 outlines how Organisation and Teamwork are established and reected in the design, development and execution of projects: At the heart of the approach which Teknika has now adopted, the company each year prepares a Quality Plan (AQP) to translate into practical terms its Vision statement that Superiority and Speed brings Survival and Success. This is the mechanism by means of which the companys in-house or local, strategy is developed and implemented. By specifying Areas for Improvement in each sector of the company the plan facilitates the identication of Quality projects
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Methodology
We have been interested in the methods organisations have adopted to improve their performance following our studies of some 20 concerns located in Scotland. Anxious to learn whether the issues that emerged from these studies were equally relevant elsewhere in the UK and in continental Europe, we approached seven global organisations whom we knew to support the aims of the EFQM. We asked whether they had a signicant improvement project that we could study by visiting their company and interviewing those involved. We intended to prepare a case study from the information we gathered to be used for research and teaching purposes. The completed case study would then be submitted to the company for review and comment. Although obtaining access took much longer than we had expected, at all the companies we eventually visited we were able to carry out in-depth, semi-structured interviews with a cross-section of employees. In carrying out this work we gratefully acknowledge the nancial support and interest of Quality Scotland Foundation and the Institute of Management Services. From the companies we studied we have chosen three to describe. They cover different sectors health, telecommunications and agrochemicals. Our rst case conrms the lack of success attending most quality initiatives; however it illustrates how a bespoke performance improvement programme can be used to recover a failed initiative and help create a quality-focused enterprise:

Organon Teknika at Cambridge Organon Teknika is one of ve companies that make up the Pharma Group within the worldwide Akzo Nobel organisation. The group employs some 3000 people internationally of whom about 80 are based at Cambridge. The company is organised into four divisions: Pharmaceutical, Microbiology, HaemoEuropean Management Journal Vol. 19, No. 4, pp. 392403, August 2001

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company had stressed the importance of this topic and listed where action was required.) Accordingly a Quality Improvement Project was initiated with the detailed remit to develop arrangements to improve in four specic areas identied as: (a) clarication of call structure and follow-up, (b) style of communications, (c) clear delivery of information, (d) problem and query handling. The team assigned to the project had ve members four from the divisional salesforce and was led by a member of the companys Steering Team. The success of the project was to be assessed by measuring for each of the salespeople involved the extent of improvement, over a specied time period, in six elements 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 lastly Clarity of information presentation. The team decided that six eld visits were to be made by each salesperson accompanied by the manager; the outcomes of each call would be scored by the manager to reect whether the way in which these elements were now being handled had improved and to what extent. (Where a need for further improvement had been revealed this would also be noted and acted upon.) In his report on the completed project the divisional manager commented that during the 24 accompanied calls the issue of Problem/Query handling had arisen so irregularly that it could not be scored. With that single qualication the results for the other three areas (a), (b) and (c) disclosed a satisfactory increase to maximum scores. The project had two outcomes: the rst being that the team amended the coaching plan to address the specic areas identied for improvement, the second was that a laminated reminder card was prepared to prompt salespeople of the revised approach. In this fresh initiative the company has applied sensitively and effectively the ABCs and ABBs of the bespoke MTQ model to introduce, manage and monitor the change process. Consequently two key conclusions about the real value of this method of resurrecting a failed improvement process can be drawn: 1. Teknika has identied, tackled and resolved projects of real importance to the companys wellbeing. These have originated from many different sources, external as well as internal. The fact that employees at every level throughout the company are able to participate in project teams and are enthused by so doing, is an important element in creating a notably high level of job satisfaction. 2. The way the Quality Plan is used, rstly to set down the companys strategy and later on, as the prime means of implementing the companys objectives is both revealing and unusual. Evidences of Success enable the extent of attainment to be quantied and appropriate action to be taken, perhaps by way of a project, where probEuropean Management Journal Vol. 19, No. 4, pp. 392403, August 2001

Figure 1 Organisation and Teamwork at Akzo Nobel (Gilbert, 1993, p. 48)

to address the problems highlighted. Projects may originate from many different sources; the departmental discussion groups held six times annually being a major source. Once a project has been identied, a project leader is designated and empowered to carry it through. The leader then decides who else is to be involved (personnel are normally involved in no more than two projects simultaneously), what the 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 all the cognate issues, map their inter-relationship and establish what can be immediately achieved. It will next determine the pre-project situation against which to evaluate the extent of the improvements ultimately brought about and set down what it hopes it will achieve and how its objectives are to be accomplished. Action Points are then chosen and a timetable xed. After deciding what resources are required to carry out the project the team will specify, as far as it is able, measures against which its outcome can be assessed. Authorisation to proceed will be sought. In setting team objectives the need to achieve consensus is seen as important; individual input is valued and assumption of ownership deemed critical. The extent to which the plan has been successfully implemented is evaluated by measures, termed Evidences of Success, which the company then uses to gauge its progress in tackling the issues pinpointed in the plan. These are single focus goals, which reect legitimate and measurable achievements. Projects are scored by a company team and results well publicised for their positive impact on people. A project from Organons Diagnostics Division illustrates how the approach operates. In the 1998 Annual Quality Plan for this division the rst topic to be addressed was to develop areas for improvement based on the results of the 1998 Sales Performance and Tracking Survey. (The biennial survey prepared by independent Market Research consultants for the
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lems have arisen. It is interesting that, in some instances, after four years these may no longer reect the current interests of the organisation. Though it is important to have continuity in measurement, this can sometimes be at the expense of relevance.

(Figure 2) as their framework for self-assessment, the then EFQM guideline publication asserted that Customer Satisfaction, People (employee) Satisfaction and Impact on Society are achieved through Leadership driving Policy and Strategy, People Management, Resources and Processes, leading ultimately to excellence in Business Results. This version has been superseded by a very similar model following a recent review; as a consequence People Management has been shortened to People while Resources has become Partnership and Resources. The results criteria have been renamed People Results, Customer Results, Society Results and Key Performance Results. The model requires organisations undertaking selfassessment, or making an award submission, to address searching questions of themselves, e.g. under Leadership, the rst of the Enabler criteria, the organisation is asked just how the behaviour and actions of the executive team inspire, support and promote a culture of TQM. Similarly the Results criteria seek precise information about what the organisation is achieving, for example, in relation to the satisfaction of its Customers and of its own People (employees). The nal Results criterion assesses the extent to which the organisation has attained the nancial and other objectives it has set itself, couched in the broadest terms. A scoring process, administered internally, is used to evaluate how well the organisation matches up to the criteria specications. Independently appointed and trained assessors are used to judge submissions for external quality awards. Nortel makes particular use of the EFQM model as a framework to help it give the desired emphasis on strategic and HR issues, specically how to involve employees in the process of strategic planning, previously an area of weakness. Major changes in promoting performance improvement initiatives have also emerged from the meetings that the CEO holds with all levels of staff three times annually. At these he discusses the direction that the company should take and, in particular, considers its future performance targets. This stands in vivid contrast with the position in 1992/3 when fewer than half the employees were involved in improvement activities. Nortel has explicitly selected the EFQM rather than the US Baldrige model to compare performance across the criteria in each of its plants worldwide; it believes that in this way individual strengths can best be exploited and areas for improvement identied and confronted. As well as achieving measurable improvements in performance the plant has regularly bettered its score against the model which the company has also used to develop its senior management team by requiring each to take ownership of one of the nine criteria. The model and scoring method are well understood throughout the company such that issues emerging in assessment gure in the fourmonthly brieng sessions with the whole workforce.
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Nortel the Ulster Plant Our second case illustrates how the Ulster plant of Nortel at Monkstown uses the standard EFQM model as the major motivator in the fresh approach to performance improvement it adopted in the mid nineties. The factory has been manufacturing and exporting telecommunications, transmission access and switching systems for some 38 years. Its current owners acquired the factory from STC in 1991 since when it has become the companys manufacturing base for European Standards (ETSI) transmission products, exporting to some 63 countries and employing about 1000 people to do so. The plant has consolidated its position over the past few years not merely because it is seen as the kind of manufacturing enterprise Ulster is keen to encourage or because it is able to recruit graduates and school leavers from a highly educated pool. Monkstown has prospered in the face of strong competition because of the strong commitment within the organisation to improving processes to make the plant as competitive as possible. The workforce, used to repeated lay-offs from the plants STC days, has responded positively to these fresh initiatives to establish the site as a progressive, supportive work environment. Moreover externally commissioned employee surveys conrm the high satisfaction levels which the company believes parallel the results from their surveys of customer satisfaction. Even so, in the kind of high-tech industry in which Nortel operates, quality is not seen as a specic differentiator since no company offering sub-standard products and services could survive. Total quality control is, therefore, assumed to be in place and ways of improving the whole process from a customer perspective dominate thinking. Nortels early attempts to improve performance in 1992/3 had been unsuccessful though some training was 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 of the companys strategy did performance improvement initiatives appear relevant; this came about some two years later with the adoption world-wide by Nortel of the EFQM Business Excellence model. Though Nortel as a global organisation is known to be very keen on self-assessment, Monkstown did not initially use the model for this purpose; rather they evaluated it as a tool beginning by using it to shape their own strategy and subsequently to forge their own framework for changing how they operated. In 1996, when Nortel decided to adopt the EFQM model
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Figure 2 The EFQM Model of Business Excellence (Anon, 1998)

Not only does this help to transmit the right messages; it also enables improved performance to receive appropriate recognition locally. The use of the EFQM model as a framework for driving performance improvement is evident throughout the plant starting with the example of leadership set especially at chief executive level. This has been a major inuence in helping to create the necessary environment within which a people-oriented culture change can be developed and ourish. The CEO has further encouraged this by communicating to the whole workforce face-to-face all relevant business information, and by answering queries from them fully and frankly. He does this in a variety of ways. Not only is he very visible about the plant; he also holds regular Town Hall meetings when he welcomes questions from anyone. If he doesnt know the answer on the spot the query is logged, investigated and answered. In these ways sceptical employee attitudes towards improvement initiatives and the plants future have been addressed and the feelings of insecurity which pervaded the plant in its STC days allayed. Symbolic of the change in the organisations culture has been the razing of the externally-located separate ofce tower occupied by the senior executives and their relocation to ofces within the plant. Only eight or nine of these have separate, but glass-windowed, ofces. A further major element in the change process was the decision to move from the previous ninelayered functional structure to one which has just four. There are now only three layers below the site chief executive. Below him are the production managers under whom are the team leaders who function as coach/facilitators. This radical change has communicated that Nortel wished to stimulate team working within and across functional boundaries. The company has also changed its emphasis towards releasing the full potential of its people, demonstrated by the inclusion in the companys thriceyearly strategic review of the mechanisms through which this is to be brought about and monitored. Selection and training of team leaders is carried out with great care and is as comprehensive as the task requires concentrating on effective communication and feedback. The Production Control Team, for example, has ten members, six shop oor and four
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staff. At their weekly meeting, which any staff member may take, discussion centres on performance feedback. Members, who really do believe they belong to a team, are highly task-focused and will freely raise any problems that they themselves cannot resolve. In accepting personal development as a key feature of its policy Nortel has encouraged fresh thinking which in turn acts as a change agent. Thus a shop oor employee with nothing more than school education was sent out to Singapore where he successfully developed a new distribution system. This method of handling a problem while at the same time encouraging the individual to enlarge his horizons represents a marked change from STC days. Likewise arrangements were made for a team leader about to move to a post in purchasing to take a B.Tech. course in Business and Finance so that she could familiarise herself with the appropriate data base and ultimately contribute more effectively in her new role. Because the chief executive is heavily committed to strategic change he has encouraged 30 per cent of his people to include in their work an element relating to strategy, the overall objective being to use this to achieve a degree of cultural change. This has been interpreted and developed through the concept of common processes. Fifty have been identied, some twenty being labelled as major. Their improvement is seen as an important outlet to which otherwise frustrated employees can contribute ideas by becoming involved with a change group. Membership of the groups themselves changes; responsibility for customer satisfaction rotates between two of the senior management team. The establishment and consolidation of a close relationship between customer and people satisfaction began with careful identication of customer requirements, internal as well as external. Some 200 employees now have customer orders as the major focus for their work as distinct from the past when virtually only those personnel engaged in distribution were involved. One of the ways this has been brought about has been to move back within the process the decoupling point where the product becomes specically for one customer; Assembly and Test areas in the plant are laid out to give the appropriate emphasis. Furthermore the operational planEuropean Management Journal Vol. 19, No. 4, pp. 392403, August 2001

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ning process focuses strongly on customers who are represented by four lines of business and by account teams. This framework handles issues such as allocation of research and development resources, performance measurement and the impact of legislation. The line of business ensures that senior management in functional positions is fully aware of, and can properly address customer requirements. The account team, assigned on a regional basis, represents the direct interface with the customer. Customer satisfaction surveys are regularly carried out by independent agencies; these cover basic quality issues, e.g. Delivery/Hardware Quality, Postinstallation support, and Warranty and Repair time. Information gathered from these is used along with other measures such as Loyalty and Retention as elements for the agenda at Customer Satisfaction workshops. At one of these, 24 elements were identied which could provide a customer with a better delivery service. As a consequence 90 per cent of all orders now reach Distribution on the planned date in contrast to the past when only 25 per cent did so. The measure of on time delivery does not now reect when the product reaches Distribution as had been the case, but when delivery actually occurs. The Monkstown plant won the Northern Ireland Quality award in 1997. In 1998 it was one of two major winners in the UK Quality Award for companies with more than 250 employees. Our nal case describes how an agro-chemical mixing and packaging unit with an uncertain future role, responded positively to the need for improved performance by developing and implementing its own in-house initiative.

coincide with an increase in sales. Unsurprisingly, the business found itself struggling to provide a satisfactory level of service, not made any easier when a new ERP system was introduced in 1995/6 throughout Zeneca plc. Its implementation was complicated by a serious loss of product and customer data. At the same time market growth had generated higher volume sales in greater variety coupled with a more complex range of package types and by the Amistar launch. The Yalding packaging and distribution unit was at the heart of the action taken to deal with this situation. As it had also been involved in initiating and carrying through an improvement project it offered an interesting and worthwhile subject for study. Re-organisation of European process operations had resulted in the rationalisation of mixing and packing activities now consolidated at two large units one being Yalding in Kent. This key role was assigned to Yalding despite some misgivings. The unit responded positively to this challenge by inaugurating the Yalding Improvement Plan (YIP) aimed at improving performance whilst simultaneously ensuring that current standards were at least maintained. The position of Quality Management in Zenecas Agrochemical operations is an important element in outlining the context to the conception, development and implementation of the Yalding Improvement Plan. Until 1986 the company had supervised quality using traditional Quality Control (QC) methods. In that year they began to consider introducing a Quality Assurance (QA) approach based on developing their own standards with a strong emphasis on prevention. This happened to coincide with a consultantfacilitated initiative to implement TQM. Though the benets of this approach were recognised it was only patchily implemented and not beyond Yalding. TQM as a separate initiative was not pursued; inevitably QA thinking suffered. Some worthwhile features of the TQM facilitation process still remain e.g. rather than having to send samples to the central laboratory, the proposal by plant operatives that they do their own testing and so eliminate delay in test results was accepted and is still in place. In the early nineties some elements of QA were re-introduced as the company sought to secure ISO 9000 series accreditation; ISO 9002 was achieved world-wide in 1997. Current QA activities centre round redesigning internal audit standards so that these meet or exceed those set by ISO 9002. The QA function for the whole agrochemicals business is located at Yalding. The site QC unit is also responsible for Safety, Health and Environment issues.

Zeneca plc the Yalding Unit Zeneca group plc had appeared in 1993 following ICIs decision to split off its advanced pharmaceutical and agrochemical businesses from its traditional chemical operations. In April 1999 Zeneca combined with the Swedish group Astra AB to form AstraZeneca which subsequently merged its agro-chemical business with the agrochemicals and seeds operations of Novartis in November 2000 to create Syngenta, one of the rst global dedicated agribusinesses. At the time of our study Zeneca plc. operated in three business areas: pharmaceuticals, agrochemicals and specialities. The agrochemical sector, one unit of which was the focus of our work, has a strong research emphasis exemplied by the success of Amistar, launched in 1997. By 1999 it had become the worlds leading proprietary fungicide. The company is also equally concerned with the effectiveness with which it uses its assets, particularly working capital in the form of stocks. But in 1994/5 a board edict to reduce stocks, then unacceptably high, happened to
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The Yalding Improvement Plan YIP Launched on 1 November 1996, this was linked to the Yalding 1997 Plan (Figure 3). One of its prime aims was to achieve a degree of focus that may have
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Order Quality Performance to be determined for the whole site. The rst six were: Section OTIF Filled Pack Quality Checks Software system stock accuracy Routing accuracy Number of customer complaints Routing efciency

There were also two material management measures concerned with stock accuracy. On the twelfth of each month the results for the preceding month were displayed on 22 boards located throughout the factory.
Figure 3 The Yalding Improvement Plan

been absent in the past perhaps the origin of comments that the organisation was rich in ideas and initiatives but whose full potential was seldom realised. Its objectives were rstly, to deliver improved Customer Service, and in doing so to achieve improved credibility; secondly, to maintain or improve Standards of Operation and, nally, to develop action aimed at Continuous Improvement. YIP was perceived as part of a change process encompassing the whole site. It required the establishment 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 individual and as a team member. This approach marked a major cultural change. Traditionally, as part of the chemical industry, scientists and engineers have tended to develop and operate processes with a fair degree of authoritarianism. Sometimes this had meant that satisfying the customer had not been a top priority! The innovative approach was topdown directed; its aim was to be the establishment of common levels and measures of performance and their translation into specic 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 of every order On Time in Full, as a set of common measures which were relatively straightforward to monitor. The target gures for this particular measure were 95 per cent leaving the Yalding site and 75 per cent for the National Selling Companies. These were not met in the rst few months for reasons associated with the introduction of the new ERP software system. While the full management team participated in developing measures for the whole site, individual sections devised measures which they decided were appropriate for their own departmental purposes. The way these measures were developed set the tone for the project, with management emphasising maximum people involvement. Eight common measures were agreed to enable OTIF and Site Export
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To make the YIP concept real, the team had to agree on the crucial areas demanding attention. Communication was immediately identied as one, particularly as a workforce survey revealed that half claimed they had at no time received any information directly from management. Lack of responsiveness of the Yalding site to the marketplace was the second area to be addressed. The third focused on the unsatisfactory site materials handling arrangements which the company tackled by putting these operations out to tender in association with external logistics operations. (The successful rm now removes the palletised product from the end of the production line and distributes it in accordance with customer requirements, an operation it claims to carry out in partnership with Zeneca. Unsurprisingly, this arrangement initially generated some hostility from employees whose jobs were now handled by contractors). The introduction of YIP required the adoption of a fresh approach to people management, particularly in identifying potential and in enhancing individual skills. In a departure from the seniority-based system which had long determined promotion and progression, a skills matrix was developed which enabled individuals to add to their expertise and so attain higher skill levels. This enabled them to carry out more complex, responsible and highly paid tasks and was seen as a key element in the individuals self-fullment. The routes by which this could be accomplished were thoroughly explained to the whole workforce. YIP was well and widely publicised and several ingenious ways of promoting the attainment of its objectives devised. e.g: A team-based short-term incentive scheme based on OTIF was introduced to inject the necessary emphasis. Though two teams (out of seven) were unable to attain the targets they had been set, none-the-less one of these still succeeded in delighting its customers. Recognition of target achievement was given by a surprise Saturday marquee jazz party organised by management after a careful audit conrmed that the target set had been attained.
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A bulletin with workforce input showing celebrities as staff noted in a humorous way memorable milestones along the road to success. A further illustration of the major change in Yalding culture concerns the new Amistar line. Before this was set up the workforce were given the opportunity of suggesting how this should be done. The table on which these were to be placed was submerged in suggestions! As a result the old, and out-moded, suggestion scheme was replaced by a more effective and relevant arrangement. The problem of ineffective communication identied by a staff survey led to set mechanisms being put in place to ensure that people are kept fully informed. These include quarterly meetings with the whole workforce a sizeable commitment since six meetings are needed to cover everyone. Individual work groups review their performance weekly. The performance targets and monthly achievement boards throughout the site also address this. Progress towards attainment of objectives generated through individual team efforts is regularly reported in person to the business director. Listening by senior management to what people really have to say during the performance review has over 18 months halved process absence rates at Yalding. Positive feedback from customers on service levels has been reported and is publicised in the Manufacturing Monitor bulletin. In January 1997 the Yalding site achieved Investors in People recognition.

reshaping the culture, motivating the workforce, making teamworking function productively and, through more effective management, implementing a total quality philosophy are equally apparent in both Nortel and Zeneca. They are consistent with Mintzberg (1978) who portrays strategy as a recognisable pattern in a stream of decisions, developing this concept further (Mintzberg and Waters, 1985) when he points out that the analysis of a single decision is inadequate to explain the strategy adopted by any given organisation. Rather, this should be considered in the context of several decisions and the extent to which these are consistent with each other. Covin (1991) extends these ideas when he suggests that a rms strategy characterises its competitive orientation and endorses its conceptualisation as a pattern of business related decisions. However, it is worth pointing out that the strategies which Teknika successfully implemented had been heavily inuenced by the MTQ initiative sponsored by Teknikas parent, Akzo Nobel. It is therefore surprising that the Teknika unit at Cambridge was one of only a few Akzo Nobel sites to adopt MTQ. On the other hand, Nortel at Monkstown is only one of several units within the Nortel family where we understand what are essentially the same strategies have been implemented. This has suggested to us that there may be several levels within an organisation at each of which a distinctive strategy may be constructively, yet legitimately, developed and which is aimed at attaining objectives that are specic to the subsidiary unit concerned, but which does not conict with those of the parent organisation. At Teknika, the prime objective had been to improve the performance of the company; the strategy was to use a particular model of TQM to do so. This experience echoes that of the Commercial Nuclear Fuel Division of Westinghouse whom Ross (1994, p. 90) describes as having discovered that the total quality concept must be viewed as a pervasive operating strategy for managing a business every day. So too at Zeneca where a survival strategy based on Yaldings model of TQM, i.e. YIP, was adopted. YIP was designed for the Yalding site and was singularly appropriate to the time and location. While we were there management was wrestling with the idea of YIP2 perhaps a comment on the sustainability of YIP as an improvement driver. For Teknika and Nortel it is evident that the process of learning from the failures of the past played an important part in enabling an approach to emerge which was sufciently persuasive to win over what was likely to have been a sceptical workforce. This has echoes of Quinns concept of Logical Incrementalism (Quinn, 1980) and with that feature of Mintzbergs Learning School whereby all the members of the organisation are encouraged to facilitate the emergence of a consensus approach both in the formulation and implementation of an appropriate strategy.
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Discussion and Conclusions

We have found it useful to consider these three case studies at two levels. At a practical level the three organisations whose experiences in seeking to improve their performance we have briey described, determined that change was essential because (1) their early initiatives aimed at achieving excellence by adopting the concept of Total Quality Management had not succeeded to the extent expected nor had they produced the tangible benets envisaged, (2) levels of customer and/or employee satisfaction were unacceptable, (3) employee satisfaction studies had drawn attention to issues of leadership, work content and how effectively and imaginatively people were being used, (4) the communication skills required to present the organisations perception of the way forward were inadequate, (5) there was more than a hint of vulnerability that unless their performance was improved, they might not survive either as a company or as a separate entity within a larger organisation. At a somewhat deeper level, more exacting analysis reveals further aspects of the approaches taken by each organisation. For example, it is noteworthy that the strategies which Organon Teknika adopted
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Mintzberg et al. (1998) has prescribed how Logical Incrementalism (1982) can be applied in practice examples of which we nd realised in our cases, namely: Build credibility by changing symbols. Nortel razed their highly visible but separate ofce tower relocating those executives who still required individual ofces to facilities within the appropriate department. Legitimise new viewpoints. Teknika developed crossfunctional teams to examine Areas for Improvement identied by several different sources, one being the departmental work group as did Zeneca at Yalding. Nortels Production Control Team has ten members, six shop oor and four staff. Any member may take the weekly meeting which has a strong emphasis on performance feedback; problems that cannot be resolved within the team are highlighted for action. Broaden political support. As pointed out in the case detail, the Nortel CEO develops this in several ways. For example, he regularly reports to the whole workforce face-to-face all relevant business information and answers queries comprehensively and frankly. Where he cannot give an immediate answer, he makes sure that the question is responded to promptly. By practising management by walking about he does much to combat scepticism. The Yalding site manager adopts a similar approach to communicate with his people. Indeed, listening to what they have to say has halved absence rates over an 18 month period. Engage in continuous change. Nortel argues that it is committed to continuous change interpreted through the medium of common processes. Their improvement is seen as an important outlet to which otherwise frustrated employees can contribute ideas through becoming involved with a change group. The YIP shows similar commitment with its development of a set of common measures. Finally, we noted that, while in each of the organisations studied their early initiatives aimed at improving performance had been unsuccessful, some of the quality-associated procedures that had been introduced at the outset were still in place. It is clear that the Excellence models which each of the companies developed and/or used for their second attempt to improve had not only provided the necessary framework for enhancing performance but enabled this to be brought about. Though the Akzo MTQ and the EFQM models have been designed to evolve as the assessment process matures over time and thus can be applied to most circumstances where measurement of organisational performance is required, this is unlikely to be the case with Zenecas YIP. Whilst this had been developed to meet what the Yalding unit saw as the framework that best met their needs at the time and, like all good
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models of this type, incorporated adequate current performance measures it appears to have two major shortcomings. The rst is that their yardsticks are so specic to Yalding that benchmarking comparisons with other units are unlikely to be practicable. The second is that the resource required to continue with the development of YIP2 is unlikely to be cost effective bearing in mind the relatively limited scale of the Yalding operation. In all our studies on performance improvement we have been struck by the number of organisations seemingly well motivated to change but whose attempts to do so had achieved only limited success. Study of the literature revealed that this was commonplace and, moreover, was demotivating, undermining some of the ideas of TQM and alienating people from participating in improvement activities. This paper suggests that the use of quality models as frameworks can be of material assistance in rehabilitating quality improvements despite previous failures and describes two cases where these fresh initiatives were sustained. All three of our cases support Fountains (ibid) assertion that the specic framework employed is not critical.

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ALASDAIR MACLEOD, School of Management, Heriott-Watt University, Riccarton, Edinburgh EH14 4AS. Alasdair MacLeod is Honorary Research Fellow in the School of Management at Heriott-Watt University. A former manager at ICI, as part of his current research into TQM, he acts as lead assessor for the Business Excellence Award for Quality Scotland Foundation.

LYNNE BAXTER, School of Management, HeriottWatt University, Riccarton, Edinburgh EH14 4AS. Email: l.f.baxter@hw.ac.uk Dr Lynne Baxter is Lecturer in Operations Management at Heriott-Watt University and co-founder of a spin-off consultancy company. She researches into business performance improvement, software development and the software supply chain.

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