ASQ - Team and Workplace Excellence Forum

Online Edition - February 2001


Issue Highlight — Back To The End Of The Line
- Peter Block explores why the customer has become less important and what this means for those who care about employee development and organzational change.

 In This Issue...
Quality At Lightning Speed
My Hero!
Two Heads Are Better Than One
Leader Of The Pack

Peter Block Column
Views for a Change
Heard on the Street

Return to NFC Index

Quality At Lightning Speed
...and with Less Financial Investment than Commonly Believed

  It’s one thing to claim to be an expert on quality; it’s another to practice what you preach. After spending 12 years as a writer and consultant speaking to various organizations about implementing quality programs, Pat Townsend decided it was time for him to return to the workforce to try out his own ideas. Now, the Chief Quality Officer for the 700-person staff of the UICI Insurance Center in Dallas. Townsend will reveal a whole set of impressive components to support the idea that complete quality and employee involvement can be accomplished quickly and at a lower cost than you would expect. From stressing the importance of measurement to effective recognition programs,
he has truly demonstrated his expertise.

  In addtion to his recent success upon returning to the corporate world, Townsend
has co-authored seven books. His two most recent include, “How Organizations
Learn: Investigate, Identify, Institutionalize” and “Quality Is Everybody’s Business.”

  Townsend recently spoke with News for a Change about the bottom line benefits of quality and participation programs and the importance of saying thank you. He will
be a special guest speaker at AQP’s Spring Conference, “Maximizing Performance
and the Leadership Potential of Everyone,” March 19-21 in Chicago.

NFC: Last February, you took a job in the corporate world, at UICI Insurance Center,
after 12 years of being a speaker, writer and consultant. Why?

Townsend: This company basically said, “Ok, you’ve been telling everybody else
how to do this, can you do it yourself?” And the challenge was too interesting. I
liked the company because they understood that you do this quality thing because
it makes money. At the same time it was obvious that the people liked each other.
So it seemed like a nice combination of a place that both understood the profit side
of quality and had the temperamental environment that I preferred

NFC: Why did they decide to start a quality program?

Townsend: Because they figured out that it made money, it’s really that blatant.
The senior officers came to the conclusion that quality was something they really
ought to try. There was an all-employee meeting on my second day and I gave my
first presentation to all 700 employees of the company. These folks didn’t know me thoroughly, but they turned me loose. I told everybody that we were going to have a complete quality process, that we’re going to have 100 percent participation and
we’d do it within 6-8 months. So the first day I laid out the promises.

NFC: How did you spend the first couple months and how did you implement the
program so quickly?

Townsend: I spent the first month working in one-on-one meetings with leadership
and all of the managers to try to explain to them what I meant by the word quality
and what I thought was possible. In March we had four half-day classes with all of
the managers and above. The first class was on leadership in a quality context, the second was on participation, the third was on measurement and the fourth was on implementation. At the end of the fourth, the president of the company turned to
everyone and said, “Ok, I need to know, are we serious?” Immediately 100 percent
of the hands were raised and that said, “Yes, let’s do it.” On September 14, 2000
we had the official launch of quality teams. We had already begun several other
aspects of the quality process, but the most notable, single piece and the part
that involves every single person, the 100 percent participation, was accomplished
in less than six months.

NFC: In September the employees knew how to get started and if they had the
solution to some problem or improvements they wanted to make, they could just
do it?

Townsend: Absolutely. I had two people working with me, John Fynn and Candace Whelan. Neither one of them had any previous experience with quality—what they
had was a thorough knowledge of the company. They had worked in several
departments of the company and they were very bright, creative folks blessed with common sense. When we actually began, the only question people had was, “Why
do we have to wait six months?” I tried to explain to them that six months was head-snapping speed. The response was, “Well, yeah, but this doesn’t make any sense,
all we’re doing is giving people the opportunity to improve things.” So we launched an interim quality program that went for those six months that was basically a computer-based suggestion program. I laid out what was required and three days later, John
Finn called me and said, “Do you want to come see your interim quality program on
my computer?” He just did it. So he selected himself in and then, when it came
time to add the third person, he found Candice.

NFC: You’ve talked to a lot of companies over the years that have tried many
times to implement similar programs, but did not have any success and stopped. I imagine you might try a different approach. Did you change the approach at all?

Townsend: I’m very happy with what we’ve done here, and I’ve even gotten to the
point now where I can finally hang a name on it as a “complete quality process.”
What we don’t recognize is that part of what’s implied in “complete quality process”
is that so many quality processes have fallen short because they were incomplete—
they didn’t have all the pieces. What’s happened here is we’ve actually laced it all together. I think what’s happened in other quality efforts is they were either
incomplete, missing a component or completely out of balance. In some
re-engineering efforts many folks end up shifting all of their resources to one area.
They forget that companies are made up of humans and complex processes. You
need to have a process that reaches across the whole spectrum in order to establish
any habits of continual improvement. My only other claim is that you have to adopt the principles but then you have to adapt the techniques. The complete quality process
that I talk about has seven components. The first, top management commitment, is
the obvious one. If they’re not involved, it’s over. It has to be a commitment of their
own personal time, their own personal effort. Here, the president of the company personally does all of the recognition sessions for all of the quality teams. He’s on a quality team in the customer service department. There’s no question in his mind
about his personal commitment. Second is leadership and we call that a separate component because leadership is at every level.

NFC: You used an outside firm that is complimentary and the president took it
seriously that everyone needed leadership training?

Townsend: Absolutely. One out of every seven people in the company went through
this very expensive, very intensive, three-day training. The leadership curriculum and
the training department have grown exponentially. The third component of a complete quality process is 100 percent employee involvement with a structure. It’s something
very few companies do, and I don’t know why. It is my belief that most companies
begin by asking the question, “Who should we involve?” It’s worthless. The correct question you should begin a quality effort with is, “Who can we afford to leave out?”
I’ll say things like, “OK, I want you to name who you hope doesn’t get better. Who
you sincerely believe on your payroll is not worth improving.” The next question is,
“Why are they on your payroll?”

NFC: Those kinds of questions help people step out of their role or step back. But
it’s a perspective that’s not always taken.

Well, when I talk about a complete quality process I mean the entire company is involved. That’s again where so many processes have fallen down. They
end up involving 10-15 percent of the folks with some vague statement about
expanding involvement in the future and they never get there.

NFC: What are the other components of a complete quality process?

Townsend: The fourth component is communication. The idea is that you can’t just slough that off. You have to be serious about it.You have to think through what you’re saying and how you’re saying it and all the different ways you could say it. Training
is the fifth part, which should probably be the most expensive single piece. But, the
trick is taking control of your training. Make sure that the training you’re bringing in is complimentary and make sure that what is taught is what you want taught. The sixth component is measurement—which is extraordinarily important. How can you tell
you’ve gotten better if you don’t know where you were and where you are? Finally, the seventh is recognition, gratitude and celebration. You simply have to say thank you
again and again.

NFC: I presume you installed a rigorous recognition program?

Townsend: Yes! Quality teams have to hit certain goals: bronze, silver and gold.
Based on the implementation of 10 ideas, or the implementation of a fewer number
of ideas that save $10,000, hard or soft, gets you bronze. And then you climb up.
Twenty five ideas or $25,000 gets you silver, 50 ideas or $50,000 gets you gold.
Then we went into what we’ve come to call the “tuple” awards. You go to “quinttuples,” “sextuples,” “septtuples,” “octtuples,” and I’m running out of tuples. I’ve got one thing
that literally is at the octuple level already. Basically, it’s a combination of material
and symbolic things and personal and public things. The president of the company
gives the thank yous. And they’re delivered along with his personal thanks, some conversation and warm handshakes all around and they get their name in the
company paper.

NFC: Are you noticing an increase in spontaneous “thank yous” and “jobs well

Townsend: I think so. I see more things around the building. People seem to be
quicker to say that to each other.

NFC: Really it’s hard saying it. It seems part of our culture is, “You’re not supposed
to enjoy yourself,” which applies to “Don’t say thank you.”

Townsend: That is not the approach here. We believe that we should be having
some fun, as well as making money. But there’s no question, as far as I’m
concerned, you do this quality thing for four reasons. The first and primary is: It
makes money. For a person who does the quality process well, it makes an extraordinary amount of money. The second reason is: Quality done well wins
loyal customers. Over the years, I finally settled on the idea of loyal customers. I
don’t call them “delighted” or anything else because “delighted,” and all the other
phrases seem to be temporary. A “loyal” customer is whom you’re really looking for. Loyal customers will stay with you, they’ll bring their friends and they’ll forgive you
to a degree. And the third reason for quality is: It leads to loyal employees for many
of the same reasons. They’ll stay, they’ll work with you and they’ll even forgive you
to a point.

Not just because of what they’ve been saying, but they’re able to participate in getting their work done.

Townsend: Yeah, and the fourth reason is: If making money is not attractive, if loyal customers and loyal employees aren’t attractive, this is the ethical thing to do. People
try to make quality so complicated. What a quality process does for you is it enables you to do what you promised you would. It really comes down to that.

NFC: Ten years ago you implemented this first process, not really being the expert, doing a lot of guess work, but having a lot of faith in people and leadership, then it
was up to the company. After you left, the president of the company, who was a big supporter, retired. Between then and now, what have you learned or how are you going
to approach things differently?

Townsend: You need to work even harder at making sure of the depth of commitment
at all levels. So the president does become, while very important, not irreplaceable.
You really have to work on that. I recognize the tremendous importance of that more
now than I did in the beginning. The thing I realized at the second company I worked
at was the tremendous importance of top-management commitment. It was a given at
my first company, so I assumed it was always a given and it wasn’t at the next place. So, I try very hard to work with management at all levels. The training has definitely increased the amount of time spent. We have a strategic plan that is under the stewardship of the quality department too. This gives us another avenue to keep reminding the senior managers about the interplay between strategic plans and
quality and the commitment to both.

NFC: Let’s look down the road two or three years. Presumably the company is in
much better shape and is run much better and then someone says, “Gee, we aren’t saving as much money as we used to.” What have you built in now so that doesn’t become an issue?

Townsend: The question I asked was, “We’ve had a tremendous level of participation
for two years now, when is it going to slow down? What’s the shelf life of this thing?”
And the team leaders all looked at me like I’d been struck stupid. One of them said, “Why should it slow down? All we’re doing is keeping up?” So long as the external companies keep changing, so long as the equipment keeps changing, so long as we keep fighting new and different policies, all we’re doing is trying to keep up and make things better. But, it’s a moving target—so long as the outside world keeps changing, that change can be improved.

NFC: Are you glad you did this?

Townsend: Oh yes, very much. I can truly say this is an absolute pleasure. I hate
the part about the separation from my family, that part of it is ugly, to be honest.
Aside from that, the job is a joy. I’m thinking in five years I’ll go back to writing and speaking. I’m looking forward to writing a book on the experiences here because I
think once again, people can learn from this. Coming here was a chance for me to revalidate what I’ve been telling folks for years and it’s a pleasure to find out that I was telling the truth. The speeches that I gave were true. Looking back at them and what I said could be done, can be done. One hundred percent employee participation can be accomplished and can be done quickly. Building a complete quality process can be done. So I’m very tickled about being here. I learn from these folks everyday.

NFC: What would you say they have taught you?

Townsend: Probably the importance of measurement. I was not as strong on measurement as I might have been previously, both for the impact of the process
and the credibility of the process. The measurements that John and Candice do
when they certify ideas are very detailed and they really show what’s going on.
Plus, the relationship with the president of the company is such that we have a lot
of long conversations about this and oftentimes it comes back down to, as Tom
Cruise would say, “Show me the money.” That’s very valid, because how can you
show you’ve improved unless you can show where you were and where you are?

February 2001 News for a Change Homepage


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