Continuous Improvement and Quality Improvement: 
by James Meharry

Curriculum Vitae : James Meharry

“Continuous improvement process has been typically viewed as incremental and additive rather than explosive and earth shattering.”(Business Horizons, July 1994) While most service organisations realise the importance of meeting or exceeding valid customer needs, they lack consistent strategies or theories to guide the internal organisational change process. (M. Milakovich, Improving service quality) 

Continuous improvement requires moving from a focus on structure to a focus on customer processes. This focus on the customer prevents dissatisfaction, and maintains quality service.  (M.S.Q. Vol. 6, Number 1 (1996) 

The celebrated success of U.S. industry following World War II contributed to executive complacency. Striving for perfection was not a high priority as America led the world in both quality and productivity. Continuous improvement was not considered as a viable strategy, as the laws of diminishing returns seemed to indicate that the costs to achieve perfection were not worth the additional investment. “Statistical techniques based on acceptable levels of defects and the probabilities of accepting poor quality were the corner stone of Japanese industrial progress over the past four decades” (A. Dutka, page 204). Early to late eighties saw Japan take most of the market share away from America’s leading industries. This sparked rethinking among American businesses in late 1980’s, to win back lost market share. Theories and philosophies dating back to the 1940’s have come to live as time as proved them right. 

All pioneering leaders of the quality movement recommend a systems approach to improving quality, from the design, production, and delivery stages to the after sale service and consumer education. 
According to Deming (W. Edwards Deming 1900-1993), the management system is responsible for causing productivity problems and poor service quality, not the employees. It is the responsibility of management to provide employees with adequate training and equipment to meet, or exceed, customer expectations. Management is responsible for working on and continuously improving their systems, while employees work in the system.  (M. Milakovich, Improving service quality). 
“The dramatic loss of the U.S. share of global markets for goods and services during the 1980’s demonstrates how accurate Deming was with his predictions. One of the reasons for attitude change was the increasing loss of market share of basic U.S. industries (automobile manufacturing, electronics, computer chips, steel production).” (M. Milakovich, page 51). An example of quality improvement is U.S. company Chrysler. It introduced a four-wheel drive jeep, called the ‘Jeep’ aimed at the quality end of the market. The emphasis is on quality and after sales service and ensuring the customers purchase will not devalue with cheaper imports of the same vehicle from overseas. 

The chain reaction of quality improvement: Previously it was believed that quality and productivity were inversely related (if one increases the other must be decreased). The chain reaction of quality shows how improved quality reduces waste and increases efficiency with better use of people, time, material, and equipment. Quality commitment pleases customers, increases productivity, expands market share, and secures jobs. (M. Milakovich, Improving service quality). 

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Kaizen means improvement. When applied to the workplace Kaizen means continuing improvement involving everyone - managers and workers alike. Imai relates quality to Kaizen by stating that "In its broadest sense, quality is anything that can be improved."      (Imai, M, (1996) 

Total Quality Control is the system that Japan has developed to implement Kaizen or continuing improvement. Total Quality Control is a forty-year plus improvement on the teachings of Deming, Juran, Feigenbaum, and others who brought the concept of quality to Japan. (Imai, M, (1996) Total Quality Control is used to ensure the product and the service will meet the expectations of the customer. “Such a system should employ quality enhancement tools, customer data, and the capabilities of staff.”(M. Lowenstein, page 143). 

Companies should work to have a culture that supports staff. One of the strengths of Japanese companies is that they have organisational and staff cohesion. They also get everyone in the organisation to be alert to look for opportunities to do things better. This results in employees contributing to the companies success.(M. Lowenstein, Customer retention)  

Often top management introduces improved customer service plans, however, they omit to provide team leaders with adequate training and the vision to carry out these changes with employees. Strategies are not implemented and follow through policies are non existent. The consequence is that the internal organisational change process fails. 

Many businesses lack direction because management treats employees like replaceable assets, and they don’t invest in staff training, resulting in lack of employee motivation and poor service quality. Management has been accustom to short term thinking, instead of transforming the business into a quality oriented work environment. (W. Deming, out of the crisis)  “Individual performance appraisals are a means to control and discipline employees”, resulting in low moral, installing fear, preventing teamwork, and removing the enjoyment of work. A competitive punishment-reward system distracts everyone from the primary mission of service to customers. (W. Deming, out of the crisis) 

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Customer satisfaction  
“Continuous improvement is the secret to maintaining customer satisfaction. Consistent, systematic improvement is necessary to demonstrate that customer satisfaction is a strategic business objective and not another short term program.” (A. Dutka, page 203)  “Seven out of ten customer still see room for improvement”(A. Dutka, page 204). Customer satisfaction is a moving target, as customer expectations change because the competition is also working to meet or exceed their needs. 

Its important not to lose sight of customer needs. “Change for the sake of change would be ludicrous. The key factor is to look constantly at customer needs and expectations in order to be fully responsive to changes that occur in the market place,” C. DeVrye, page 79). A bank invested money and staff hours into reducing queuing times from five minutes to three minutes, only to find that customers did not notice the difference. “The customers would have preferred resources to be spent on extending hours of operation for their convenience”. C. DeVrye, page 80). 

A means of feedback should be introduced, to find out how customers view improvements and what remains to be accomplished. Also all employees should be involved in the planning process for continuous improvement of customer satisfaction.  London Underground introduced the Customer satisfaction index, in 1991. The index enabled the business to achieve a sample that was consistent, and represented all Underground users. Its purpose is to find out what areas of improvement that the company could make, to its quality of service. The samples were carried out by interviews at the station at a length less that ten minutes, otherwise the survey would consist of infrequent users. Questions in the interview included, frequency of service, cleanliness, service of staff, public address and ease of ticket buying. “You will not be surprised to learn that 20 percent of our customers make 80 percent of the trips” (M.S.Q Vol. 5, Number 1. (1995). 

In the mid eighties a chief executive of Scandinavian Airlines, explained to his employees that the airline had financial difficulties. “He admitted he didn’t have all the answers, and explained that he needed their help if the airline was to survive.” Not everyone in the organisation had contact with customers, but each employee is working in a chain that will ultimately serve someone. (C. DeVrye, page 80).  The company was turned around showing that honesty, employee knowledge and improvement are vital for service success. 

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Customer problems  
Service quality can be improved by focusing on customer problems. Most customers are not aware that they are being served well, only on dissatisfaction does the customer take notice. “That’s dangerous because the customer will only be aware of failure, of dissatisfaction not the success or satisfaction.” (J.S.M Vol.3 No.4 Fall 1989)  I disagree with this, because most customers will be aware subconsciously whether they received good service, the fact is that dissatisfaction will have a more lasting impression on the customer, and it could result in bad word of mouth for the organisation. 

Quality of service will be judged on how regular service is delivered and the quality at which complaints are handled. “Service firms should strive for perfect service, but they must be prepared to respond when things go wrong. It requires educating the customer on how to be an effective partner in problem solving, and it requires having a well trained staff who are authorised to take actions to solve problems on the first contact with the customer.”(J.S.M Vol.3 No.4 Fall 1989) 

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This is the process of comparing a company’s current performance with that of organisations judged to be the best in the class. This process can be used as a tool to apply to continuous improvement of the organisation. A wide number of sources can be used, copying or modification of the internal operations of your competitor and other outsiders. (Business Horizons, July 1994) 

Benchmarking is about comparison, improvement and exchange of ideas. Identify areas of improvement, examine ideas or best practices and implementing changes. Benchmarking can be your own ideas that are enhanced by the expert opinion of others. The Ideas method of benchmarking is a method that’s been traditionally used as a quality improvement tool. (this will be described later in this essay)                                                                                    (M.S.Q, Volume 5, Number 4 (1995) 

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Service quality 
My definition of quality is that it satisfies the needs and meets the expectations of customers, employees and owners. “Quality means that established specifications have been fulfilled and that customers feel that they have received the quality that they have expected.” (M.S.Q. Vol. 6, Number 1 (1996) page 49) 

Due to the perishability and intangibility of service, customers may have different values and different grounds for assessment, they may perceive the same service in different ways. (M.S.Q. Vol. 6, Number 1 (1996) “Organisations have difficult barriers to overcome in identifying definitively how consumers actually evaluate quality.”(NZ.J.B. Vol. 12 (1990) page 1) 

In accordance with the conceptual model of service quality, gaps may appear between the clients’ expectations and the perceived service received. The magnitude and direction of the gaps, will contribute to an understanding of the expected level of satisfaction demanded by customers. .”(NZ.J.B. Vol. 12 (1990) 
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1. Encourage teamwork and flatten barriers between departments :  
Eliminating barriers between departments establishes trust and co-operation rather than fear-based competition, and providing training for teamwork is necessary to accomplish the transformation. 

2. Formulate a mission statement that reflects the shared values and operationally defines the vision of the company: Employees must understand their role in accomplishing the mission statement as is will become company policy. Identifying internal customers will increase internal efficiency and define tasks more clearly, it will also empower employees to cope with their environment, which they have control over. 

3. Empower employees instead of threatening them.  
Making coercive statements in a service organisation reflects a fundamental problem with implementing action strategies, as the leadership style must be consistent with the mission of company. If empowerment and participation are valued, then treats and intimidation are inconsistent with the mission. 

4. Pay more attention to your customers and suppliers.  
Develop systems that survey and collect feedback from all customers, and don’t wait for complaints as by then its usually too late. User fees are increasingly being charged for the delivery of basic services, and customers have every right to demand that the service be provided to their satisfaction. 

5. Begin slowly and do not create unrealistic expectations.  
Emphasis should be on internal rather than external rewards for quality improvement. The learning and organisational change process requires patience and understanding. Results will come, but slowly as the work culture changes. 

6. Anticipate and continually adapt to change  
Failure to recognise market changes is a common reason why businesses lose their market share and disappear. Businesses that were protected by domestic regulations and tariffs are no longer immune to global completion, through changes made by the world trade organisation. 
Manager must strive to balance their quality and productivity improvement strategies with the need and the expectations of those who must actually deliver the service. 
     (M. Milakovich, Improving service quality) 

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This is a four element model 
1. Plan for the voice of the customer (assessment) 
Before beginning a continuous improvement strategy, a company should assess its own values, strengths, and weaknesses. This assessment process may be time consuming, even expensive, but it is certain to improve the quality of the corporation’s culture and customer loyalty. 
The company should also evaluate its customer information system and point of contacts. Traditionally, customer information systems are based on customer inputs and feedback, and then processing it. With a VOC system the focus will be on the customer and the customer will determine where and how the information is channelled. 

 2. Gathering the VOC (identifying needs) 
The purpose of gathering the VOC is to identify the needs, expectations, problems, and complaints. This information is then translated into attributes and translation statements, so that customer loyalty-focus activities can be identified. 
The following are ways in which a company can gather information: 
Active – go directly to the customer (trade shows, formal quantitative research) Hands on interviewing by the staff or the use of professional customer research firms. 
Receptive – customer comes to the company (registered complaints) 
Indirect – company examination of specific customer action (increased business, customer defection) 

3. Understanding the VOC (collect and understand customer information) 
Includes three elements : 
1. Collecting and translating raw customer information. 
2. Thoroughly analysing customer research findings. 
3. Making priority recommendations for deployment. 
4. Deploying the VOC (Take appropriate action) 

Information gathered should be communicated to the entire company. Reporting customer feedback is vital for purpose of collective improvement, not retaliation. This will be ongoing proof that company supports its staff, and in turn will allow a strong organisational culture to build.  Everyone in the organisation should know who their customers are, what the customer needs and expectations are, and how service and other performance areas are perceived.  Employees should be surveyed as to the effectiveness of the new system, as they are equally as important as customers are. However, the principle purpose of the system is action; how well it helps keep customers and increases the sales and profits. 

Its critical that management take responsibility to drive improvement activities, as the actions of top management will have a trickle down effect to making the system a success.  Because consumer needs and expectations are ever changing its vital that the company acts on customer input as soon as possible.  (M. Lowenstein, Customer Retention) 

The costs involved in setting up a customer measurement system, internal and external communication, and the follow through on improvement activities are considerable. These costs will need to be justified, and that is why its necessary to have high initial investment. To ensure the system is implemented successfully.  (M. Lowenstein, Customer Retention) 

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The ideas method 
1. Stage one: inquire  
Investigate possible areas for benchmarking. Identify areas where you need to improve. 
There are a variety of sources, including; suppliers, customers, employees, competitors or others in a similar field. 

 2. Stage two: decide  
Decide which area to improve on and what are the implications of pursuing that area of improvement. 

3. Stage Three: expand  
Analyse and identify in more detail the area of improvement you have chosen. Identify causes, effects and possible solutions. 

4. Stage Four: analyse  
The possible solutions of the previous stages are investigated and evaluated. The business should seek opinion from external sources at this stage, as it presents benefits such as networking. There is also opportunity for comparison and exchange of ideas. 

5. Stage Five: specify  
Interpreting results to focus on the way forward. 
    (M.S.Q, Volume 5, Number 4 (1995) 

Successful service leaders in the 1990’s are never completely satisfied with their progress. Only better is better! If your company is not constantly striving to improve, you are simply giving a chance to the competition to catch up. (C. DeVrye, page 79). 

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The managing director should lead from the top, presenting challenging goals and spreading a quality policy. The responsibility should be divided within the organisation. Quality should be placed at the centre and it is up to management to ensure the organisational culture follows through with quality improvement. 

The main focus of the organisation should be on the customer, understanding the needs and expectations of the customer are paramount in providing quality service. Quality improvement is everybody’s responsibility, and every employee should have the knowledge, resources and the authority to provide the best possible service. When designing new services, quality should be built in right from the start, with internal procedures to continually change with its customers expectations and needs. 

Continuous improvement is a preventative measure, this means developing an organisation to prevent mistakes from happening, as opposed to discovering mistakes on inspection. This improvement will increase productivity, profitability, and satisfaction. 
When a compliant does occur, employees need to be empowered to resolve the situation, by compensating for the mistake and explaining why it happened. This is a unique opportunity to rectify the situation, by presenting a positive outcome with customer satisfaction. 

Benchmarking should be used to learn from others, not a means to copy, as the organisation should be focusing on improvement of service for its customers, not keeping in line with its competitors. As a result the organisation will end up with a service superior to its competitors. 
The business needs to encourage and reward its employees for successful improvement, the most valued form of reward being money, however, recognition of individual employee input, is also an effective reward. 

Finally striving for continuous improvement is an ongoing challenge within an organisation there is always room for improvement, especially as customer expectations and needs are ever changing. 

The idea of continuous improvement is cleverly reinforced by this story 
Every morning in Africa, a gazelle wakes up. 
It knows it must outrun the fastest lion, 
Or it will be killed. 
Every morning in Africa, a lion wakes up. 
It knows it must run faster than the slowest gazelle, 
Or it will starve. 
It doesn’t matter whether you’re a lion or a gazelle, 
As when the sun comes up, 
You’d better be running. 
(Business Horizons, July 1994) 
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 Bibliography and References: 

Milakovich M. E. (1995) Improving service Quality. St. Lucie Press, Delray Beach, Florida 

Imai, M. (1986). Kaizen: The Key to Japan's Competitive Success, McGraw-Hill Publishing Company, New York NY 

DeVrye C. (1994) Good service is good business, Prentice Hall, Australia 

Dutka A. (1994) AMA Handbook for customer satisfaction, NTC Publishing Group, Illinois USA. 

Lowenstein M. W. (1995) Customer Retention. ASQC Quality Press, Milwaukee, Wisconsin, USA. 

Managing Service Quality. Volume 5, Number 4 (1995) Using Ideas to get started on benchmarking. Pages 49-56. 

The Journal of Services Marketing. Volume 3, Number 4, Fall (1989) Focusing on Customer problems to improve service quality. Page 5. 

Managing Service Quality. Volume 5, Number 1 (1995) Improving customer service and satisfaction at London Underground. Page 26-29. 

Managing Service Quality. Volume 6, Number 1 (1996) Making service – quality improvements work. Pages 49 – 52 

New Zealand Journal of Business. Volume 12 (1990) Managing service quality for improved competitive performance. Pages 1-12 

Managing Service Quality. Volume 5, Number 3 (1995) Improving quality in professional service organisations : a review of the key issues. Pages 34-44 

The Journal of Services Marketing. Volume 2, Number 2 Spring (1988) Guiding principles for improving customer service. Pages 37-43 

Managing Service Quality. Volume 6, Number 4 (1996) Westminster City Council: improving quality through complaint management. Pages 20-22. 

Managing Service Quality. Volume 5, Number 3 (1995) Quality improvements in the NHS. Pages 20-22. 

Business Source: 
Magazine: Business Horizons, July 1994. Quality lessons from America’s baldridge winners. 

Curriculum Vitae : James Meharry