The Fast Track to Higher Quality

Though more and more is being written about quality management, much of this writing tends to mystify, not clarify.

One clear lesson, though, was enunciated by quality-management guru J.M. Juran, a great demystifier.

In "Juran on Leadership for Quality" (the Free Press, 1989), he wrote:

"The most decisive factor in the competition for quality leadership is the rate of quality improvement."

For our industry, this means that quality improves in direct relation to the number of quality-improvement initiatives a bank undertakes.

Slow and Steady

Consider the quality-improvement efforts at two banks, Bank G and Bank Q.

As is typical of many financial-services companies, Bank G works steadily at quality improvement with several projects always underway.

The cumulative effect is clearly positive.

Management would say the bank was "doing O.K." on the quality front. Customers would probably agree that Bank G's quality was just that - O.K.

Pulling Ahead

Bank Q, which also has simultaneous projects underway, has found ways to step up the pace of quality improvement.

Its rate of project initiation is twice that of Bank G, because projects receive a higher priority in the internal competition for time, attention, and resources.

Moreover, Bank Q completes its initiatives in less time.

This rate differential means Bank Q has steadily widened the gap between its level of quality and that of Bank G. And its cumulative improvement has a steeper slope.

The Challenge of Catching Up

Chances are its customers also are happier.

This gap will persist even if Bank G learns the secret.

Bank G would have to exceed the pace at Bank Q to catch up with its quality and customer-satisfaction levels.

The challenge for Bank G is to increase the slope of its improvement trend line.

Four Basics

There are many schools of thought about how to speed up quality improvement. But four basic factors affect the rate at which a bank can mount a multifaceted quality-improvement program, most experts agree. They generally subscribe to some shared approaches in dealing with those factors.

Resources. Most experts agree on the merits of involving all employees in the quality-improvement process, as opposed to relying only on staff resources.

A bank soon will find that attempting to step up the pace of improvements simply by adding methods engineers, systems analysts, process designers, and project managers is unacceptably expensive.

The aggregate impact of all employees working on quality improvement will far exceed that which can be achieved with staff resources alone.

Further reasoning is that trained rank-and-file employees who are unleashed are more likely to "own" a solution in which they have participated.

Moreover, these employees probably are in a better position to appreciate what will or will not work in the design of improvements.

Knowledge and skill. Quality improvement requires knowing how to:

* Tune in to client definitions of quality.

* Diagnose root causes of quality deficiencies.

* Design cost-effective solutions to quality problems.

Though not difficult as intellectual skills, these requirements tend to differ from the basic know-how most of us accumulate in a traditional banking career.

Experts agree that the necessary knowledge and skills can be learned easily. Quality leaders therefore typically make heavy investments in quality-improvement training at all levels of the organization, not just for management personnel.

Priorities. Something akin to a Gresham's Law seems to govern priorities in many banks: The urgent drives out the important.

Most schools of quality management agree on the need to rethink the processes and influences affecting an organization's priorities.

Since leadership from the top is universally recognized as mandatory, experts also identify recognition and compensation practices as powerful tools to reinforce desired quality-improvement priorities.

Many also stress the value of making a business case for quality as a strategy for increasing market share and reducing costs. Thus, they equate quality improvement with other business practices oriented toward the bottom line.

Organizational constraints. A typical business is best at managing problem solving through its departmental or functional structure.

Many firms find it awkward to deal with issues requiring lateral problem solving. However, quality experts stress the importance of team efforts to improve work processes and delivery systems holistically rather than piecemeal.

Substantive quality-improvement efforts usually require interdepartmental teamwork.

Speed Is the Goal

As you work your way through the plethora of themes and variations encountered in the literature on quality management, keep in mind this key idea:

Faster quality improvements is a goal of all the strategies.

First, choose a strategy that fits the culture of your bank.

Then, go to work on increasing the slope of your quality-improvement progress line.

Mr. Mainer is a senior vice president and member of the executive committee of Boston Co. and its principal subsidiary, Boston Safe Deposit and Trust Co.

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