101: Redesigning Schools
the Good with the Bad
Tip: Stay In For The Long Haul
Have to Be a Little Different
Investment Tip: Stay In For The Long
Money managers know that investing in the market takes time. If you want a quick buck, forget it. Look beyond short-term fluctuations, stick with your investment and the payoff will come. But could the same theory apply to quality? Just ask the investment experts.
Van Kampen American Capital (VKAC) controls over $58 billion in assets for small investors. Ten years ago then-named American Capital of Houston, Texas, began development of a quality initiative that - like the market it depends upon - would thrive, suffer and nearly crash before winning the 1997 AQP Organizational Excellence Award for the Service Industry.
Quality Starts With a Crash
The three year period that followed brought dramatic change within VKAC: management was fired and TQM began. Out went the old senior level managers and in came the quality consultants. In 1989, the investment in TQM, commanded by an inspirational CEO, created a team management approach called the American Capital Quality Commitment. Tamara Scott, vice president, The University, VKAC, directs operations at all VKAC training campuses. She recalls, "The consultants brought in a TQM box with a big bow and said we're going to put people in teams and have tee-shirts and pizza parties, and said 'quality is a job done right the first time!'" She also admits the box included mandatory quality training, management steering committee meetings, quality goals linked to corporate goals, and quality awareness classes.
As the program took hold, American Capital Quality Commitment improved how the Houston office did business. Scott explains, "We had some managers that really didn't know how to manage. The TQM box gave them something to grab hold of, a set of processes to follow that made them more effective." The following years would see upwards of $1 million in savings through implementation of 1500 team-generated ideas. On top of that - VKAC got rich. The post-crash focus on diversification in money management caused mutual funds to skyrocket.
Life at the Top
Everything seemed great. While growth leveled off, management seemed content to float atop their recent success. No one would reevaluate the current system. It took six years to fully develop, it won awards - why let go? For one thing, many VKAC employees went home with those companies that came to visit. Scott admits, "We lost a lot of storytellers and history during this time." And for another, things were about to get a little crazy.
Merger Weakens Quality Effort
Strangely enough, amidst the chaos they continued achieving DALBAR certification. Scott reflects, "Everyone else [in the industry] was under the same kind of turmoil, but we had enough of a head start to stay in the lead."
The assessment indicated that employees needed their training to be continually reinforced. Subsequently, training was tied into VKAC's reward and recognition program, encouraging employees to continually update their education. To create ownership and increase accountability, responsibility for creating team guidebooks was handed to the teams themselves. The guidebook includes the team member roles and responsibilities, team charter, mission statement, ground rules, opportunity for improvement form, rewards and recognition, and objectives.
A list of critical success factors defined and measured by customer feedback, highlight each team's areas for improvement. These factors are linked in the company's strategic plan, affect planning and policy decisions, and are linked directly to the compensation plan. The greatest challenge has been getting employees to buy in to the program. Fortunately, as teams have realized that the ability to customize their own process is beneficial to their business, they have increasingly come aboard and completed their guidebooks.
While no one can be sure exactly what the future holds, VKAC has learned to stay proactive. Scott believes, "You can't get stagnant - can't just sit on your box with the pretty bow." Their ability to confront these issues successfully will draw in large part on the lessons they've learned in creating an organization worthy of this year's AQP Organizational Excellence Award.