[This article first appeared in the October 1992 issue of _Look- ing_Ahead_. The text shown here was provided by the Federal Quality Institute.] IS QUALITY GOVERNMENT POSSIBLE? by Don G. Mizaur Earlier this year, the Ogden Internal Revenue Service Center in Utah was presented the prestigious Presidential Award for Quality. A remarkable scene took place at the awards ceremony: when director Bob Wenzel greeted the center's 6,000 federal employees, they leapt to their feet, clapping and cheering for a full five minutes. These wildly enthusiastic federal workers did not seem to be the usual government stereotypes of serious, buttoned-down bureaucrats, meticulously checking numbers and stoically moving papers from file to file. What made them differ- ent? Each year the Ogden center processes over 40 million tax returns, collects more than $95 billion, and sends out 78 million pieces of mail. In 1986, with union support, the center began a concerted effort to improve its services using quality management approaches. It can now show an impressive list of improvements in taxpayer services: a decrease in payment error rates; an increase in problem-solving capability; shortened turnaround times; and more accurate mail handling. The center also reduced error rates on Form 1040 data entry to the lowest in the nation and saved $11 million over a five-year period. These would be significant achievements for any private sector company let alone an agency of the federal government, and they are the reason for the incredible pride and enthusiasm dis- played by the employees at Odgen. Their performance is confirma- tion that government workers are not only skilled and reliable, but also as dedicated, energetic, and creative as any other work- ers in America. WHY IS QUALITY IMPORTANT IN THE PUBLIC SECTOR? Like many private companies, most federal agencies are struggling with the quality issue. The stakes are high. American competitiveness in the new global economy requires not only a highly productive and innovative private sector, but also a more entrepreneurial, innovative, and high performing government. The federal workforce of 3 million civilian and 2 million military employees is larger than the combined workforce of the first 17 Fortune 500 companies. The government carries out a huge range of activities that profoundly affect all private business and industry, as well as each individual citizen. To the extent that the government's activities and services are burdensome, untime- ly, unresponsive, or error-prone, private enterprise is hindered in its efforts to compete for international market share, and private citizens are denied full access and use of the services to which they are entitled. Yet at the same time that the govern- ment is trying to improve the quality of federal services, the crushing national debt calls for urgent cuts in the cost of government. Americans know that Federal Express guarantees overnight delivery of a letter to any remote town in America; that American Express can get money immediately to people in trouble in far outposts of the world; and that L.L. Bean can send flannel shirts in the right size and color to customers shortly after receiving a request on its toll-free telephone line. Each time citizens have a less than perfect interaction with government, they wonder: Why can't government answer my request in less than eight weeks? Give me the right information the first time? Spell my name correctly and send my mail to the right address? Why can't government employees be pleasant on the telephone and find someone else to help me when they can't? Take responsibility for correcting the same computer error that has occurred month after month? Treat me like a customer? On the other hand, federal agencies now face severe, sus- tained budget cuts, have fewer staff to serve more customers, enforce more regulations, suffer tighter constraints on discre- tionary spending, and bear sharper criticism from customers and a Congress that is itself getting bitter complaints from constitu- ents. HOW DID THE FEDERAL QUALITY MOVEMENT BEGIN? To ease the tension between the public's expectations and service realities, in the early 1980s some agencies began to experiment with quality improvement approaches already being tried by private companies whose survival was threatened by Japanese competitors. Drawing on the examples of Ford Motor Company, Harley Davidson, IBM, and others, parts of the Navy, NASA, the Internal Revenue Service, and other agencies sought to understand first-hand what their customers needed. Teams of managers and employees together used quality tools and techniques to redesign production and service systems to ensure that custom- ers would always receive the prompt, error-free, high quality product or service they wanted and deserved. The results--in customer satisfaction, staff morale, system efficiencies, and cost reductions--were promising enough for these agencies to escalate their efforts and for other federal organizations to begin following suit. WHAT IS A QUALITY IMPROVEMENT INITIATIVE? In both the public and private sectors, quality improvement initiatives go by a variety of names--total quality management (TQM), total quality service, quality control, quality manage- ment, high performance, team excellence, or quality teamwork. The underlying concepts are the same and are fully described in the criteria for the Presidential Award for Quality and the Malcolm Baldrige National Quality Award. Both awards are based on the following principles and practices: ù demonstration of top management commitment; ù focus on meeting and exceeding customer requirements; ù strategic quality planning and goal setting tied to the busi- ness plan; ù strong employee involvement at all levels; ù quality assurance through prevention instead of inspection; ù expanded education and training for a more flexible workforce; ù data-driven problem solving; ù use of statistical tools; ù new reward and recognition systems; ù removal of barriers to quality service; and ù direct and personal communication. All these elements can be found in an organization with a mature, fully functioning quality improvement focus. However, from organization to organization they may vary in detail and may have been started in a different order. The hallmark of success- ful quality implementation is a careful tailoring of these general principles to the particular characteristics or culture of a given company or agency. CREATING THE FEDERAL QUALITY INSTITUTE In 1988, recognizing that the quality improvement approach was showing results in the private sector, the Office of Manage- ment and Budget (OMB) converted its productivity improvement program to a quality-driven performance improvement effort. OMB still targeted productivity increases but now expected these to be a by-product of the new focus on consistently meeting customer-defined quality requirements. In addition, OMB created the annual Quality Improvement Prototype Award and the Presiden- tial Award for Quality and began holding an annual federal conference on quality. Also in 1988, OMB joined with the President's Council on Management Improvement and the Office of Personnel Management to establish the Federal Quality Institute (FQI). These actions led to widespread interest in initiating quality management efforts in federal agencies. In 1990, the board of directors (made up of top political and career executives in 10 agencies) expanded FQI's mission and services to include leadership of the federal quality effort, technical and consulting assistance to agencies, research, publications, national and regional conferences, the awards program, monitoring of the Total Quality Management Federal Supply Schedule (a list of approved contractors qualified through a competitive process), and coordination of interagency quality initiatives. As a very small, highly leveraged entity (12 permanent staff, 26 senior executives on rotating detail), FQI is committed to building active partnerships with others interested in improv- ing the quality and cost of federal services. FQI must reach out to leaders in the Cabinet, Congress, agencies, unions, universi- ties, associations, and private business to help energize and support the largest organization in the world as it undertakes the massive changes needed in its culture and systems. The scope and depth of current quality improvement efforts in government is not precisely known. The General Accounting Office is conducting an extensive survey in this area at the request of Congressman Don Ritter (see the discussion beginning on page 1). Available evidence points to a strong movement that is gaining momentum. In fact, there are probably very few agen- cies that are not aware of the federal push for service and product quality improvement and that do not have at least some of their components applying quality principles and practices. ARE THERE BOTTOM-LINE RESULTS OUTSIDE OF UTAH? Documented results of some of the federal quality improve- ment efforts can be found in case studies of the 20 Quality Improvement Prototype and 3 Presidential Award winners over the past five years. Table 1 outlines the results for three agency winners. In addition to the improved services and dollar savings noted in the table, these agencies report better communication and higher morale as the result of their quality initiatives. Despite these results and the growing evidence of progress, the federal quality movement is still in its early stages. Experts note that it takes 6 to 12 years, depending on size and complexity, for an organization to completely change to quality management in all its components. For the federal government with its huge size and infinite complexity, the timeline will be much longer. WHY IS TQM DIFFICULT TO IMPLEMENT? A key ingredient in successful quality improvement efforts is effective leadership by management. An organization's ability to deliver superb service on a routine basis during thousands of interactions depends on moving from an authoritarian, bureau- cratic, protective style of management to one that emphasizes real delegation of authority, fewer levels of managers, and empowerment of workers to respond directly and immediately to customers, making it easier for them to do business with these agencies. ________________________________________________________________ TABLE 1 Three Quality Improvement Prototype Award Winners Defense Contract Management District Northeast, Defense Logistics Agency: ù Reduced the reject rate of critical piping systems in submarine hull materials from 10.7 to 7.5 percent. ù Decreased the delinquency rate of contractor deliveries from 18.2 to 7.5 percent. ù Reduced the amount of interest paid due to late payments from $20,000 to $2,000 annually. San Francisco Region Wage and Hour Division, Department of Labor: ù Reduced reliance on housing inspections as an indicator of agricultural labor violations and increased on-site inspection of labor camps. ù Developed new, bilingual teams in partnership with community organizations, using State Labor Camp Registries to pinpoint problem areas. ù Completed 36 inspections within a few days instead of the many months previously required, resulting in financial assessments and labor camps' compliance with regulations. Public Services and Administration, Patent and Trademark Office, Department of Commerce: ù Reduced the in-process error rate of filing receipts by over 50 percent. ù Decreased response time of mailing filing receipts to appli- cants from 38 to 18 days. ù Achieved annual savings of $40,000 in filing receipt process by eliminating rework. ù Increased incoming document processing productivity by 63 percent over a four-year period, saving $1 million in annual costs. ______________________________________________________________ In short, the quality approach requires fundamental changes in the traditional management role of planning, directing, and controlling. This means that many managers well-schooled and comfortable in the old management paradigm must change deep- seated attitudes and behavior. Most individuals and organizations in the private sector are finding the change very difficult. Federal agencies face even more monumental hurdles. ù The discipline of a competitive global marketplace that pro- vides incentives for radical change to business and industry managers is missing in government. ù With the average tenure of government's top executives (presi- dential appointees) around 18 months, federal agencies have difficulty maintaining the integrity of long-range change ef- forts. ù Centralized and sometimes restrictive control of federal administrative support systems--procurement, personnel, auditing, space, information, and finance--create extra layers and limit agencies' ability to be flexible and responsive. ù The division of responsibility between executive and legisla- tive branches requires endless negotiation and coalition-building around budget, legislation, and regulations, deflecting attention from service delivery considerations. ù The requirements of the government's various customer groups often conflict and must be referred to the political process for resolution (for example, environmentalists and loggers in the spotted owl controversy). ù In many instances, the role of government as protector and enforcer of equal rights for citizens mandates careful due process systems, while efficiency is secondary to ensuring full and fair opportunity to be heard. Beyond all these obstacles, however, is the major barrier to accelerating quality management in government--the lack of strong consensus for change among top officials. Given their expected short stay in government and their responsibility to the adminis- tration or constituents, both appointed and elected officials tend to focus primarily on policy issues and political considera- tions. They find little time for management issues unless prob- lems directly impinge on concerns of the administration and Congress. In the case of congressional members, when they do take an interest in the management of an agency, they are often accused of inappropriate oversight and micromanagement. In these circumstances, it is no surprise that top govern- ment officials do not place priority on federal management nor find time to pressure agencies for higher quality, lower cost service to the public. Yet, if the deeply entrenched traditional bureaucracy that frustrates citizens and workers alike is to be superseded by the more demanding but far more effective quality management approach, leaders at the very top of government must generate a broad national consensus supporting the need for change. Most important, they must actively demonstrate their personal commitment to creating a new service culture in federal agencies. Because change of this magnitude will take a long time, success demands strong bipartisan support, continuity of effort, and disciplined follow-through. HOW DOES TQM DIFFER FROM OTHER MANAGEMENT IMPROVEMENT EFFORTS? Cynics say that the quality initiative is just another fad in the continuing, failed attempts of numerous administrations to subdue the federal beast--MBO, ZBB, PPBS, Reform '88, and now TQM. Wait a year or two, they say, and this too will pass. However, total quality management is not the same as earlier management improvement procedures. Management by objectives, zero-based budgeting, the planning, programming, and budgeting system, productivity improvement, and most other central agency management initiatives were one-dimensional, limited efforts to address isolated aspects of the tangled federal management prob- lem. In contrast to the system-wide quality improvement approach, these efforts did not address the interconnectedness of one change to the rest of the management system nor the need for each agency to tailor new approaches to best fit its unique mission and culture. Previous management improvements did not take customer-defined requirements into account, nor did they provide for changing burdensome, static procedures into streamlined, dynamic, self-renewing processes. Finally, they did not acknowl- edge the need to balance the technological aspects of management with the human perspective. Other observers have concluded that the quality management movement peaked in the 1980s, and that new concepts in the private sector such as organizational architecture, the learning organization, or flexible production are already replacing the emphasis on quality management. Actually, these initiatives are natural outgrowths of maturing experiences with quality. Organizations that are adopting new concepts are not doing so instead of but as further extensions to quality management. For example, far from abandoning quality, cutting-edge companies that are introducing flexible manufacturing are building these approaches on top of the quality foundation. One of the major tenets of the "learning organization" is reliance on systems thinking, a basic principle of quality management. The United States must continue to learn from the remarkable 30-years-in-the-making Japanese industrial miracle and the successes of many American businesses and federal agencies who have persisted for a number of years with the quality approach. The documented results of these examples provide powerful argu- ments in favor of redoubling the efforts to implement quality management in government--not as the last word but as the essen- tial first step. The quality improvement concept is a big tent that can include many new insights and methods. As a matter of fact, the tent does not even have to be called "Quality" if it shelters integrated, disciplined, tested methods of improving the cost and quality of government services, and meeting--even exceeding-- citizens' expectations. A FUTURE GOVERNMENT OF QUALITY The Federal Quality Institute holds a vision of quality management for all of government in which agencies carry out their missions in ways that exceed the expectations of their customers and taxpayers, that involve their entire staffs in continuous efforts to improve products and services and reduce costs, and that build high quality performance into every aspect of their operations. As this vision comes closer to reality in the government--as many other agencies become more like the Ogden IRS Center--some astounding changes will occur in the public sector. ù Government services will be customer focused. They will be routinely timely, accurate, and highly responsive to the public's needs. ù Recipients of government services will be consistently pleased and satisfied. ù Some government services will significantly exceed citizens' expectations. ù Costs of government will decrease. ù Taxpayers will be confident that their dollars are wisely spent. ù Federal managers and union leaders everywhere will undertake joint initiatives to improve services to the public. ù Public servants will be widely respected and recognized for excellence. ù Government workers will take pride in their calling. ù Outstanding candidates will offer themselves for public ser- vice. Most agree that at present the country is a long way from creating a government service ethic that can produce these results. The mission of the Federal Quality Institute is to act as a catalyst and resource to help bring about a new culture of excellence in government, to change from a government that burdens to a government that helps--and costs less. Making simultaneous improvements in the quality and cost of federal services demands fundamental changes in the very essence of government's culture and management. Such an enormous chal- lenge is daunting. Is it really possible for government to make these changes? The answer is a resounding "Yes." The quality government initiatives already in action show what can be achieved. These are a blueprint of the future for all of govern- ment. Quality indeed works.