Note: This file was downloaded from the Montgomery County (Maryland) Public Library electronic bulletin board and is presented as received. ----------------------------------------------------Business Index & ASAP------ AUTHOR(s): Feigenbaum, Armand V. TITLE(s): Regaining the quality service edge. Summary: The US will only relaunch service quality growth by making quality implementation a priority in management. Technology must be integrated with other service quality issues. Every employee must be made aware of quality issues again. The US will be able to regain its lead in service quality as managers start leading quality programs again. A negative public view of US service quality affects service firms' finances, with quality failures amounting to 10%, 20% or more of sales. National Productivity Review p457(5) Autumn 1993 v12 n4 DESCRIPTORS: Customer service_Quality control Quality control_Management To the leaders who built some of today's best-known service businesses--J. Willard Marriott, Conrad Hilton, Lincoln Filene, to mention a few--quality and service were synonymous. Their deep conviction was that service quality was their business. By and large, service managers continue to live by the principle that quality is the key to their competitiveness. Many service organizations march to that drumbeat, and the high quality performance of some notable service companies bears this out. Why, then, the dismal public judgment of service quality in the United States today? It is negativism about services the result of a temporary blip? Hardly. It is the result of fundamental economic changes in American businesses and basic sociological changes in American homes. The lifestyles of consumers and the work processes of companies now depend almost completely on the reliable, predictable performance of service providers, with little tolerance for the time and cost of failures. Studies completed by General Systems indicate that today nine out of ten American consumers define their quality expectations as the requirement for an essentially perfect service--not merely a progressive reduction of things gone wrong (traditional quality control), but also a significant increase in the things gone right (total quality.) A two-wage family, in which one of the wage earners has to take three successive Wednesday off from work to have a piece of household equipment serviced will tell you this. The head of a small telemarketing company will tell you this when it loses twenty-four hours of billing because it can't get back on-line after a power failure. The public's negative assessment of U.S. service quality strongly affects the financial results of service companies. The cost of quality failures--the principal component of a service company's total cost of quality--can amount to 10 percent, 20 percent and sometimes more of sales. In many service organizations, a "hidden organization"--a part of the organization that exists because of unsatisfactory work--amounts to a huge proportion of capacity. In some service organizations today, only one or two work products out of ten go through error-free without additional attention. While much of the widely publicized increase in service employment has come about through market growth, some has been created by these do-the-job-over quality problems. They have been a principal reason for the minimal productivity increase in American services. There is no more effective way to improve service quality than to return this hidden organization to effective capacity. To tackle this task, many service organizations are subjecting themselves to one of their most soul-searching appraisals in many years. They want to determine why their long-term awareness of quality has not translate into successful, organization-wide implementation of customer-perceived quality satisfaction with lower costs of quality failure. They will eventually discover that today's service quality leaders stand out from the quality followers in three ways: * They accept the upward quality expectations as demands to be rigorously faced rather than loosely with on a best-efforts basis. * They approach the necessary improvements on an organization-wide basis rather than by selective steps that cut the cat's tail off an inch at a time. * They institutionalize their quality leadership by implementing service-driven quality work and teamwork processes that are expected to become essentially perfect and that everyone in their organization understands, believes in, and is part of. In today's highly competitive marketplace, service quality is what the customer says it is, not what the marketeer or general manager says it is. It's based on the buyer's actual experience measured against his or her requirements, stated or unstated; conscious or merely sensed; technically operational or entirely subjective; always compared with alternatives (real or merely perceived); and always representing a moving target. It's the buyer's call as to what is a quiet hotel room, complete coverage in an insurance policy, or a fair set of conditions for on-time delivery. Getting your arms around this greased pig is a very demanding measurement task that has exploded in importance. This task is made even more difficult by the fact that quality has different meanings within some service organizations, depending on what the people in the organization consider important. This can range from efficiency to customer satisfaction, making ambiguous just what objectives are being emphasized and measured. And this can change over time as well. Veteran employees in some office service organizations can tell you that they are now going through the seventh or eighth quality-improvement crusade in their careers--all the others having died and been buried without autopsy. These employees want to know what is new and different about the current programs and what will make them stick. These employees are likely to feel that they are personally committed to trying to provide customer service with cordiality and readiness to solve problems. But they often believe that their principal obstacle in this is the lack of support they get from supervisors and central groups. Employees aren't empowered until they know what they're empowered to achieve in terms of goals, what they're expected to do, and what kind of help they can count on. The plain facts are that quality expectations of the marketplace have outraced the quality delivered by some servicers and the servicers don't have a realistic peg on how big that quality gap is. To really be in the competitive race today, a service company has to have a clear window on the quality world to see what par really is. For many services, this window is too small, gets fogged over too frequently, and isn't used enough by top executives to determine the quality-improvement factors for strategic business planning. BEWARE OF ISOLATED ISLANDS OF IMPROVEMENT Service quality has always depended on the quality responsiveness, understanding, and commitment of a service company's people--and the difference in the "people factor" from organization to organization continues to be immense. This difference is manifested by the bank teller who helps you versus the one who hustles you; the salesperson who patiently helps you pick out the right toy for the kids, rather than the one who tries to merely pacify you; the flight attendant's courtesy that really warms up the stressful fifteen-hour business day you're still part of, compared to the one whose bristles reflects his or her own problems. Technology greatly affects the people factor in service companies. For example, the speed and accuracy of data processing dominate the teller's help-hustle trade-off; the reservation process and the aircraft's reliability and maintenance process influences the flight attendant's effectiveness. Too often, technology has been managed in separate compartments of the service organization and not been connected in customer-quality-satisfaction terms to the rest of the company's programs. This creates a group of quality improvement islands without bridges. Unless it is built on an integrated quality foundation, information-processing technology will merely generate service failures faster than before. For example, the financial services senior manager who has a strong lending background but understands little about information technology may have good intentions but not yet the confidence to effectively deal with operations issues. Experience shows that the leverage for accomplishment comes from a clear, customer-oriented total quality management system throughout the organization with effectively structured quality work and teamwork processes that people understand, believe in, and are part of. It takes a relentlessly disciplined method to establish and maintain this system. The most underutilized resource of most service companies is the quality knowledge, still, and attitude of their people; an effective total quality management process literally drinks in these human strengths. In essence, quality is a fundamental way of managing a service organization. The senior manager's role today is to be the number-one implementation leader of strong total quality throughout all areas of the company organization. Unfortunately, many firms that have undertaken quality initiatives limit the role of the senior manager to that of number-one executive speechmaking combined with a loose collection of technical activities and motivational initiatives--partial quality control. Having senior management be the driving force behind the quality movement powerfully reinforces the position of those senior service managers--and there are a great many--who are not merely promoters of quality awareness but who have the know-how to develop their company's quality playbook and to act as quarterbacks on the field. This structure challenges the approach of those companies in which business leadership has primarily meant finance and marketing emphasis, where quality is still thought of as a specialist's job, and where detailed executive attention to a subject like quality raises eyebrows at the boardroom level. This structure also challenges the management education approach of those graduate schools of business where quality continues to be treated as a footnote and where the notion of allowing and encouraging professors of quality to join the ranks of the marketing and finance professionals never appears on the discussion agenda. The basic lesson to be learned is that what a service organization does to make quality right helps make everything else in the organization right. People will respond to a call for quality excellence with enthusiasm as long as the program is serious in purpose and is relentlessly and consistently pursued. Three principles are the keys to making genuine total quality implementation work for a service organization: * Make quality leadership a strategic objective and back it up with the program, commitment, and resources required for first-time excellence in customer complaints still leaves you with dissatisfied customers. The impact of this on market share and growth is that a satisfied customer tells eight others of his or her experience; a dissatisfied customer tells twenty-four. In addition, a service receiver who is happy with you means a six or seven times greater likelihood of genuine service satisfaction than a service receiver who merely accepts what you've done for him or her. Service quality isn't measured in terms of quality defects--zero or otherwise. It's measured in terms of the total service receiver perception of quality. * Establish a clear systemic structure of competitive-leadership quality work and teamwork processes that are well-designed, thoroughly understood and accepted, and fully installed--processes that people throughout the organization believe in and are part of, and that provide genuine help to individuals in all parts of the company. They should be systematically developed in terms of the best quality practices in the world. * Energize and empower the quality commitment of all men and women as a basic way of life throughout the organization. To be effective, this policy must be in-line and job-related rather than just an exercise in motivation. Customer-oriented service quality leadership originated in United States, and many American companies are still strong in it. Reigniting the fire of our service quality growth means restoring quality implementation to a primary role in American management. It means integrating technology with other aspects of service quality. It means reemphasizing the quality-mindedness of people in every occupation. As ore and more managers return to personal leadership of strong and effective quality programs, the United States has the opportunity to regain its service leadership edge.