Meeting the new paradigm challenges through total quality management.

• Author: Luthans, Fred
• Position: Includes related article

Introduction

In recent issues of Management Quarterly, it has been suggested that the electric utility industry in general, and rural electric cooperatives in particular, have entered a new paradigm. Steve Collier suggests that this new paradigm is mostly characterized by competition.|1~ Scott Luecal emphasizes that the consumer dominates the new paradigm.|2~ Few would argue that both meeting increasing competition and better satisfying consumers have become extremely important challenges facing all rural electric cooperatives today and in the critical years ahead. In fact, if these challenges are not met, not only will there be problems, but rural electric cooperatives may not even survive as we know them today.

Importantly, it should be recognized that rural electric cooperatives are not alone in the tremendous challenges that lie ahead. All American organizations today are faced with a new paradigm characterized by global competition and rapidly escalating customer expectations. Fortunately, many organizations are meeting these challenges through total quality management or TQM. For example, world class organizations such as Motorola have met their competitive and customer challenges through TQM. A sample of the results achieved through TQM implementation at Wells REC is explained on page 13.

Obviously, TQM is not going to be the panacea for rural electric cooperatives. Yet, rural electric managers must be aware of this movement that is sweeping across America and the world. The purpose of this article is to spell out exactly what is meant by TQM, suggest some steps of implementation, and bring out some of the common problems.

Already, many cynics are calling TQM the latest gimmick, the latest fad and quick fix for management problems. Obviously, there is some truth to these accusations. But even the most caustic nay-sayers will admit that "quality" is for real and will definitely provide the competitive edge and improve customer satisfaction. This new "quality" approach is needed to meet not only the challenges facing huge multinational corporations such as Motorola, but also the smallest electric cooperative. Therefore, all electric co-op managers should be aware of what is involved in TQM so that they can take all, or just what is deemed useful to them, in meeting the competitive and consumer challenges that lie ahead in their new paradigm.

What Is TQM?

Obviously, there are many definitions and connotations associated with TQM. Practically every management author, consultant or even practitioner has a different meaning for TQM. In an earlier article, my colleagues and I defined TQM as an organizational strategy with accompanying techniques that deliver quality products and/or services to customers.|3~ In other words, we feel that TQM is an organizational strategy, not just another technique that is used in operations or member services. TQM is the way the organization is managed, not just something in addition to everything else. However, the definition does point out that there are TQM techniques that are employed to help deliver (the key word in TQM implementation) quality service to customers. To gain a depth of understanding of TQM, it would be helpful to examine each letter in the acronym for further refinement and expansion.

The "Total" Perspective of TQM

The total part of TQM differentiates the approach from the traditional inspection, quality control or quality assurance approach. TQM is an overall organizational strategy that is formulated at the top management level and then is diffused throughout the entire organization. Everyone in the organization, from the general manager/CEO to the lowest paid hourly workers/clerks are involved in the TQM process.

The "total" part of TQM also encompasses not only the external, end-user and purchaser of the product or service, but also internal customers and outside suppliers and support personnel. This is how TQM differs from a traditional customer service orientation. Under TQM, the "Customer Is King" (as in Wal-Mart), but so are internal customers such as co-workers or other departments. Everyone who gives or passes on anything in the organization is a supplier, and anyone who receives anything from anyone in the organization is an internal customer. The same is true for external suppliers and support personnel such as in maintenance; they are also a vital, integral part of the TQM approach. If suppliers and external support personnel do not deliver quality, then the organization cannot deliver quality to its customers.

In essence, TQM becomes the dominant culture of the organization. Well known behavioral scientist Edgar Schein has formally defined organizational culture as "a pattern of basic assumptions--invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration that has worked well enough to be considered valuable and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems."|4~

Under TQM, the core cultural values for everyone in the organization might include the following:

1. Make it right for the customer at any cost.

2. Internal customers are as important as external customers.

3. Respond to every customer inquiry or complaint by the end of the day.

4. Answer the phone within two rings.

5. The customer is always right.

6. Not only meet customers' expectations, but delight them.

7. Teamwork and cooperation is more important than individual action and gamesmanship.

8. Everyone is involved in the quality effort, no exceptions or bench sitting is allowed.

9. Respond to every employee suggestion for quality improvement within one week.

10. Never be satisfied with the level of quality, always strive for continuous improvement.

    Importantly, the representative cultural values above cannot just be shallow, "gimmicky" slogans. All organizations have had quality slogans for years. But these slogans were just that; they often did not deliver on the quality promise. In fact, the slogans often raised the expectations of customers, and when the organization did not deliver as promised, there were bigger problems than if there was no slogan at all. In their well known book, Albrecht and Zemke conclude after years of study of Service America that there is really no relationship between slogans and quality service.|5~ The key is that there must be cultural values for quality, not just empty slogans. Cultural values are accepted by the employees and drive their behavior to actually deliver quality to customers.

    What Does "Quality" Stand for in TQM?

    When most people think of quality, they conjure up an image of defect free products such as automobiles or electronic goods. In TQM, quality does mean no defect products...