Quality and Performance Management
As the 20th Century winds down, it is appropriate to take stock on the past and to reflect on the future. Most observers note the remarkable developments in technology and World commerce and forecast tremendous further changes the "knowledge revolution" , now well underway, will create. Technology, especially communications technology, is changing in fundamental ways not only products and services but also patterns of commerce and how businesses are organized and run. Almost all observers emphasize the rapid pace of change and forecast an even greater pace of change in the years ahead. We who are associated with the Mayberry Chair at TTU view these trends and developments from the point of view of quality and performance excellence, especially in connection with business education and impact on the State of Tennessee.
During the last two decades, quality and performance management emerged as major issues in connection with the so-called national competitiveness problem. This problem had many dimensions, but relatively poor quality versus Japanese and consequent loss of market share led to concerted actions in many U.S. industries to close the gaps. It also led to the creation of the Malcolm Baldrige National Quality Award and to State Awards such as the Tennessee Quality Award to recognize leading companies, to create learning networks, and to share best practices. Much progress has been made and the U.S. now usually ranks first in competitive comparisons among nations. Defect quality has improved greatly, but larger quality and performance challenges emerge, as competitive success comes to rely increasingly on innovation, fast pace, and new technology. These challenges demand a more holistic view of performance and of the marketplace than before. "One size fits all" approaches are not adequate to the needs of tomorrow's businesses. To remain relevant, the field of quality and performance management needs to broaden its intellectual base.
As we seek to look ahead to the emerging challenges, I find it helpful to view the current picture of quality and performance management in terms of three "strains", or variants: compliance oriented ; improvement oriented ; and business management oriented. These strains are often confused with one another, even though their approaches , scope , and knowledge bases are usually quite different. Briefly , these strains are as follows:
Compliance oriented quality focuses primarily on specifications, procedures, documentation, and consistency. It is most often applied to manufacturing operations and is especially critical in "high stakes" applications such as health, safety, and high precision for which processes must be routinized and carefully controlled. Fundamental to the success of compliance oriented quality is corrective action--to bring processes back into control when they depart from control limits.
Improvement oriented quality (often called Total Quality Management(TQM)) emphasizes problem prevention , process improvement and team-based approaches to problem analysis and/or opportunity for improvement. It has been applied to a wider range of applications--manufacturing, service, and support operations--than compliance oriented quality. The strong improvement motivation underlying this strain requires use of sound process and outcomes measures, an important development in quality and performance management.
Business Management Oriented
Business management oriented quality addresses overall performance requirements derived from a firm's strategy and critical success factors. Great emphasis is placed upon integrated deployment of strategy, backed by measures that reflect the overall critical requirements. As many companies now emphasize learning, fast response, innovation, and value creation, these must be included among the critical requirements.
The brief three-strains description, above, attempts to place each type in the context of its approaches and applications. For many firms, all three types need to coexist and be orchestrated well for the firm to succeed. By its nature, business management oriented quality subsumes the other two. However, the broad scope requires a comprehensive vision of the business, its value chain, markets, key processes and critical success factors. Thus it is not a simple extension of TQM, even though the concepts of TQM have significant application. Further evolution of the field of quality will occur primarily through integration with business management concepts and disciplines.
For the challenges that lie ahead, business schools are perhaps best suited to do the research into the concepts, frameworks, and case studies needed to develop the discipline of quality and performance management for the needs of the new millennium. This depends heavily upon the better development and integration of the sub-disciplines of business education. It also requires infusing the concepts of quality and performance that have developed largely outside of business education and which only recently have begun to find their way into texts, curricula, and case studies,...not yet in an integrated way. These quality concepts have added much to our understanding as well as a much needed pragmatism. These subjects and concepts are likely to figure prominently in the agendas of business schools and businesses in the 21st century.
*Dr. Curt W. Reimann is the chair holder of the Mayberry Chair of Excellence at the College of Business Administration at TTU.