Several years ago, we realized our early leadership in the computer field had di minished and our 20-person

firm was becoming indistinguishable from other CPA firms. As the managing director (we don't use the title "partner"), I attend ed a total quality management (TQM) seminar in 1990 in the hope it would provide us with a new focus that would improve our competitiveness and our clien t service. (For an overview of this subject, see "TQM and CPA Firms, CUSTOMER NEEDS That seminar encouraged us to put greater emphasis on continuous conformance to customer expectations and needs. In the past, we had measured our success as mos t CPA firms do--without much input from clients and often in terms that had no r eal significance for them, such as number of new clients, total billings, etc. Furthermore, in the initial client proposal meetings the proposal team set high goals without regard to the prospective client's desired service levels. On exam ination, though, we found that once hired, we rarely kept all those promises. We were continually setting ourselves up for a fall. For example, we typically offered to perform analytical reviews of and calculate ratios for internally generated client financial information. Frequently, thoug h, we had difficulty getting the information from the client and delivered the p roduct late. We disappointed the client in a service its managers never would ha ve asked for if we hadn't offered it. Later, as part of the TQM process we asked clients--which are mostly closely hel d businesses--what they wanted. Their real needs usually were very simple and ea sy to satisfy, such as prompt delivery of financial statements or the opportunit y to meet with us and talk about business. The TQM process we implemented was an attempt to fill those needs and create the kind of change that would make us more profitable and service-driven and enable us to provide higher quality services. EMPLOYEE TRAINING Although much of the TQM literature is still centered around manufacturing, we f ound it applied equally well to our firm. We did, however, hire a consultant who helped us understand TQM and how to implement it in a service-oriented business . He suggested we send all our directors to a one-week quality management training program at 3M in Minneapolis, but we opted instead to schedule two and a half d ays of training for the entire firm spread over six weeks at our own office beca use we would lose less client time and fewer billable hours. We scheduled the tr aining after October 15, the final extension deadline for individual taxes, to m inimize pressure on the staff and delays in service delivery. Everyone in the firm participated--we hired a temp to answer the phones during t he sessions. We found it very beneficial to gain perspectives from owners and cl erical staff on the same issues. We began by selecting topics, such as communica tions, and then we split into groups to identify problems and possible solutions . We eventually created the firm's vision statements during these sessions. (The terms "mission statement" and "vision statement" sometimes are used interchange ably, but we prefer the latter because we believe it describes us at a certain p oint in time.) Carl Jenkins, one of our directors, went to Minneapolis for a one-week 3M "train the trainer" session so he could become our in-house facilitator and create a p rocess for training new staff. We still turn to our outside consultant at times to stay focused, but we felt so strongly about TQM's potential that we hired a f ull-time non-CPA, Lucy Douty, as director of quality services, once Carl Jenkins had launched the process. She heads our TQM efforts, trains new employees in TQ M principles and researches and proposes further advanced training when needed. We found that our focus on TQM enabled our firm to achieve a number of positive goals. PROCEDURAL AND ORGANIZATIONAL CHANGE We made major changes in how we do our work and how we communicate with customer s--both internal (firm members) and external (clients).

Improving communication. We have stepped up our efforts to communicate regularly with clients, in part by encouraging relationships between employees and client personnel at all levels, not just between business owners and directors. We als o spend more time listening to clients and less time talking. Client surveys. To develop customer loyalty, we solicit feedback through client surveys, a new step for us. They are conducted at the end of each engagement and used to improve our work and gauge existing clients' ...

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