Q-Tips is a column of news and opinion on quality matters from The Quality Executive, a monthly newsletter aimed at quality professionals. The columns are written by TQE's editor Jerry Bowles, who is co-author of the book Beyond Quality and the writer of FORTUNE magazine's annual quality supplement. For a free sample issue of The Quality Executive, leave a message with your name and address on the TQM BBS mail system or fax a note to (212) 246-7916. Q-Tips March 1995 The question of the month in these parts is this: has James A. Champy, a founding father of the reengineering revolution, gone soft? Remember the High Noon-like tone of Reengineering the Corporation, which he published in 1993 with co-author Michael Hammer? Remember the parts about bringing in reengineering "...only when a need exists for heavy blasting" and the sentence that reads "If some people are upset it's a good sign that you are doing something significant? Now comes Reengineering Management, Champy's new book (without Hammer), in which Jack Palance suddenly turns into Gary Cooper. The new book begins with a rather startling admission. Reengineering, Champy says, is simply not living up to its promise of making corporations more efficient or more profitable. What is even scarier is the complete change of tone--and perhaps heart--on the part of the author. "Today, the only 'basics' we may have to operate with may be trust, integrity, imagination and a cooperative spirit," Champy says. This time around Champy lays the problem on the doorstep of management. As companies have altered the work of workers--their salespeople, clerks, repair crews and assemblers--they have not done the same to management. Too often, he says, management is rooted in ideas developed at the turn of the century. Senior managers, schooled in the classic ideas of command and control still taught at business schools, see the kind of re-engineering taking place from the factory floor to the accounting department as presenting a threat to themselves or their territory. "Reengineering creates apprehension among senior managers who fear a loss of power, of losing their jobs," Champy says. While none of this is stop-the-presses news to people on the frontlines, Champy is certainly right when he says that the times a-changin'. "Something like 23,000 managerial jobs are being eliminated each month in the United States," he says. "And this is happening while we are coming out of a recession. The fact is, these jobs are going away and will never return." Managers who survive will have to deal with what Champy calls the "fear of irresponsibility." "In a reengineered company, much more work is self-managed by people working in teams or alone," he said. "They are no longer supervised. Managers are unable to 'see' whether people are being responsible, so many tend to assume they are not." This kind of thinking is antiquated and destructive. It undermines the reengineering process, he says. "At a very deep level, managers must ask themselves the 'purpose' question," Champy said. "They have to ask the same questions about themselves that they ask about operational work." Ultimately, old management models need to be replaced with what Champy calls a "mobilize and enable" system. It's a system in which managers are constantly examining and challenging what they do. Now comes a world-class mea culpa.. "Instead of talking about strategy, structure and systems, managers in a re-engineered company need to talk about purpose, people, process and culture," Champy said. "They need to continually ask what business they are in, what the fundamental purpose of their enterprise is, what customers want and whether their products or services are meeting that need." While we find Champy's new message much more appealing than the old one, we can't help wondering what brought about the change. Hope that it's not just that books about "soft" issues are selling a lot better right now. TQM Information On-Line Those of you who have mastered the art of the modem should check out The TQM BBS, a computer bulletin board "dedicated to the free exchange of information and education in the principles of quality." Lots of good information available to download on a variety of quality subjects ranging from ROQ to TQM jokes and Re-Inventing Government (actually, the last two may be the same category). You can access the BBS by dialing 1 (301) 585-1164 or 585-6617. (1200-21,600 bauds per second). Your SYSOP (which is Net talk for "system operator") is Tom Glenn. If you can't get logged on or have trouble, you can call Tom by old fashioned voice at (301) 565-8882 or fax (301) 565-8882. Q-Tips February 1995 Now that the Republicans are riding high in Congress, business groups are trying to remove barriers to nonunion workplace committees considered crucial to global competitiveness by many companies but viewed with suspicion by organized labor. "Our No. 1 policy concern will be removing the legal cloud over employee involvement groups," said Edward E. Potter, president of the Employment Policy Foundation, a management group. The foundation seeks to "make employment policy a key component in U.S. competitiveness." Since 1975, hundreds of U.S. companies have formed workplace committees that unite employees and managers over quality, safety, gain sharing and other issues. But the ability of nonunion companies to organize workplace committees was limited significantly by the National Labor Relations Board in 1993. Less than 12% of workers in private industry are represented by unions. In a 1993 decision, the NLRB declared illegal a workplace committee organized in 1989 by Electromation Inc., an Indiana electronics company. At the time, Electromation was nonunion, but its workers voted last year to be represented by the Teamsters Union. The Electromation case "raises substantial doubts about the legality of many cooperative efforts, except those of traditional labor unions," said Rep. William F. Goodling, R-Pa., the chairman of the House Economic and Educational Committee. Goodling has listed employee involvement as a key issue his committee will tackle this year to help U.S. companies compete. But he did not commit himself to specific legislation. AFL-CIO officials said they support quality circles and work teams that discuss production issues with managers. But they oppose legalizing nonunion employee groups that go beyond production issues to discuss conditions of employment. Value Engineering is Back Value analysis techniques trimmed tens of millions of dollars off production costs at General Electric in the early 1950s and have been used by the U.S. Navy and other US government departments with great success. And they were enthusiastically and profitably adopted by companies in Korea and Japan a decade later. Pioneered by the late Lawrence Miles during World War to source large numbers of turbo-superchargers for bomber engines, Miles formally developed this into a Value Analysis system at GE in 1947. Miles describes VA as 'an organist creative approach which has as its purpose the efficient identification of unnecessary cost, ie. cost which provides neither quality, nor use, nor appearance, nor customer features'. VA is now making a big comeback (or perhaps it was never really gone). There is the Miles Foundation, an educational charity in Washington D.C. and the Society of American Value Engineers (Save), an international organization which boasts 1,200 individual and 35 corporate members (among them General Motors). Good ideas never die, they just take short vacations. Future Work The encouraging news is a new book called "FutureWork," by Charles D. Winslow and William L. Bramer is that companies hoping to cash in on the promises of the information age must invest as deeply in their employees as they do in technology. As companies and even government agencies plunge into "reengineering" programs, Winslow and Bramer, who are partners in Andersen Consulting's "change management services" business, hope to make a contribution by offering a holistic picture of both the human and technological elements needed to make a substantial change in a business. Rather than simply measure how well an employee carries out an assigned task, companies must redefine their employees' jobs so that in everything they do, employees are fulfilling the broad mission of the company, Winslow and Bramer argue. To do that, workers need the appropriate tools--in other words, ways to get detailed and timely information about their products, customers or even competitors. Companies must be willing to spend the time and money to train people and develop those tools, the authors say. Then, businesses must be prepared to continue both training and honing those tools over many years, particularly as the demands of the business shift. The authors also argue that businesses must accept that they have an important role not just in training their employees at work, but in contributing to education generally. In the late 20th century, "the business enterprise system has become the dominant institution both in America and in the world," the authors write. "This dominance extends far beyond mere economic matters, and into areas traditionally occupied by the family, the church, and the schools." Businesses need to face up to that responsibility, they say. Besides, they add, without trained workers, companies won't be able to mine much value from a so-called "knowledge economy." Q-Tips January 1995 TQM: Clinton's Last Hope or Newt's Secret Weapon? Look for 1995 to become the year that TQM emerges as the weapon of choice in the battle to convince voters that Washington is serious about eliminating waste in government. November's Republican rout, combined with the collapse of the Clinton health care initiative, has focused attention squarely on Vice President Al Gore's "reinventing government" program as Democrats scramble to demonstrate they're just as unhappy about politics as usual as their Republicans counterparts. At the same time, Newt Gingrich, speaker-designate of the new Republican House of Representatives, has long referred to "quality as described by Deming" as one of the five pillars of American civilization. (For the record, the other four are: Personal Strength; Entrepreneurial Free Enterprise; the Spirit of Invention and Discovery; and the Lessons of American History. Here, finally, is a political spitting contest that could actually benefit voters. There are reliable estimates that suggest that finding, fixing or preventing the errors now happening in government services and products could save taxpayers $256 billion a year--nearly 80 percent of what we currently spend on defense. As the late Senator Everett Dirksen was fond of saying: "A billion here, a billion there; pretty soon you're talking about real money." Gingrich's interest in Deming's philosophy dates back at least to 1991 when he organized an audience with the late Grand Old Man of Quality on Capitol Hill for a bipartisan audience at a question-and-answer session and a luncheon meeting that included then Speaker Tom Foley and Minority Leader Bob Michel. He was one of the few and most ardent supporters of former Representative Don Ritter (R-Pa.), who lead the battle in Congress to make Total Quality Management standard operating practice within the federal government. Ritter and Gingrich formed an informal working group with James Pinkerton, White House deputy assistant to the president, and Frank Hodsoll, who is in charge of management programs at the Office of Management and Budget, to find ways to put TQM on the political and regulatory map. Since the morning after Labor Day 1993, when Gore unveiled the Clinton Administration's National Performance Review report, the vice president and his reinvention staff--working out of an office above President Clinton's favorite McDonald's--has been quietly and efficiently implementing many of the report's 384 recommendations. In September, the General Accounting Office sent a letter to Congress with its analysis of progress, reporting that over 90 percent of the NPR's recommendations are underway and that $46.9 billion of the NPR's proposed $108 billion in savings over a five-year period has already been enacted. According to the report, another $16 billion in estimated savings is pending in congressional conference committees, awaiting final approval. The results range from large-scale restructuring (cutting almost 90,000 jobs from the civilian work force of 2.1 million, the first step in a plan to cut 272,000 positions) to small--but important--steps to make government more responsive and customer-focused (reorganizing the New York office of the Department of Veterans Affairs so that a single employee serves as the main contact person for each veteran needing help, getting the Social Security Administration to promise to mail out cards within five working days and the pledge by the Customs Service to process international air passengers within five minutes. Among the other achievements touted are that nine agencies have begun major streamlining initiatives, agencies are slashing red tape, forming labor-management partnerships with their unions, buying fewer "designer" products and more off the shelf, shifting billions of dollars in benefits to electronic payments and changing the way the federal government interacts with state and local governments. The Gore team has even ventured into the mysterious and arcane world of military specifications, urging the Pentagon to rethink its need for a cake that was supposed to withstand being suspended atop two 4-inch-diameter cans spaced 6.5 inches apart, without breaking or cracking. Said Gore: "I think I might rather eat a cake that failed that particular test." In the weeks ahead, the Clinton Administration will rely heavily on Gore's work to argue that its latest budget-cutting efforts in the departments of Transportation, Energy, and Housing and Urban Development are not acts of political desperation but part of an overall plan to bring quality management to government. Gingrich and the Republicans can be depended upon to come up with some TQM-based budget-cutting brainstorms of their own. Will either party have the constancy of purpose that Deming believed was necessary for quality to produce results? It's too bad the grumpy old man of TQM isn't around to enjoy the fun. Reality Check--What About the Post Office? A good place for Washington reformers to focus some of their TQM efforts is the United States Postal Service. A recent GAO study finds that "labor-management problems persist" and "have not been adequately dealt with over the years." Specifically, the Congressional watchdog agency says the USPS is rife with "an autocratic management style, adversarial employee and union attitudes, and inappropriate and inadequate performance management systems." As a solution, the GAO recommends the labor and management sign a 10-year agreement providing for employee teams, incentive pay based on USPS and unit performance, better training and the removal of both workers and supervisors "who demonstrate a lack of commitment to work unit goals, values and principals." Finally, the GAO says Congress may want to redraft the 1970 law dealing with Postal Service labor relations- -but only as a last resort. Pentium, Shementium A survey by Computer Life magazine reveals that buyers in the consumer marketplace are unfazed by Intel's imperfect chip. In fact, six out of 10 people polled who plan to buy a personal computer in the next year, and are aware of the flaw in the Pentium chip, are not likely to change purchase plans as a result. While the flaw is not likely to alter the survey respondent's computer purchasing plans, those respondents who had heard of the problem were undecided about Intel's handling of the situation. Thirty-seven percent approved of Intel's handling, 31 percent disapproved, and 32 percent had no opinion. However, 45 percent of those planning to buy a PC this year approved of Intel's handling of the situation. You Will Be Seized by an Uncontrollable Urge to Buy Life Insurance Today Beginning in January, Japan's Dai-Ichi Mutual Life Insurance will begin offering policyholders a range of information on insurance policies, hotels, telephone numbers, recipes and horoscopes by phone or fax on a 24-hour basis. The service is intended to increase customer satisfaction, promote new subscriptions and reduce policy cancellations. Another service that will be offered card-holding customers is telephone counseling by doctors and nurses on health and nursing care matters. These services will be available through telephone numbers at about 100 Dai-Ichi branches across the country.