Applying (Total) Quality Models
how to improve processes without creating extra bureaucracy
ABSTRACT:
The range of public sector organisations adopting the Balanced Scorecard (BSC) continues to increase. Many of these organisations are already experienced users of quality frameworks such as EFQM and an increasing number are finding tensions between the continued use of EFQM and the successful introduction of the BSC. The issue raised is whether EFQM and BSC can be complementary, and if so how they best work together?
AUTHOR:
Steve Johnson ()
Improving quality and performance management in the public sector
The range of public sector organisations adopting the Balanced Scorecard (BSC) continues to increase. Many of these organisations are already experienced users of quality frameworks such as EFQM and an increasing number are finding tensions between the continued use of EFQM and the successful introduction of the BSC. The issue raised is whether EFQM and BSC can be complementary, and if so how they best work together?
EFQM v Balanced Scorecard
Not surprisingly in this arena there is a wealth of academic and consultancy literature about how to develop the ideal BSC - using techniques such as strategy or success mapping, and how to integrate the model throughout the organisation. In many instances such literature refers to how the BSC can be supported by an appropriate quality framework (e.g. EFQM) to ensure the organisation continually improves against its objectives. A lot of this advice however, is based on theory and there is little empirical evidence to suggest it actually works. Indeed, most research into use of the BSC suggests failure rates of up to 70%.
Within the UK’s Inland Revenue there was a pressing need to understand how the quality and performance frameworks of EFQM and BSC could be optimised to improve corporate management and public service delivery. The department had developed a BSC but its development had created tensions with experienced EFQM users about best fit between the two frameworks. To help answer the question members of the Revenue’s Quality Public Services team (QPST) set out to explore what was working in other public and private sector organisations.
Case study investigations were conducted with 4 organisations who appeared to use both EFQM and Balanced Scorecard successfully: Siemens Communications UK, Royal Sun Alliance (IT), Swedish Customs and Northern Ireland Electricity.
The research showed that despite the diverse nature of these organisations the key issues in successful use of both models had a remarkable consistency.
Practical Application
The organisations had used the ideas in the developing literature on BSC use where it made practical sense to them, particularly where it helped clarity of presentation and communication of strategic objectives. For instance, Siemens UK had utilised the strategic themes concept to show what mattered in the organisation in a simple format. This provides a model, which could be understood by both front line staff and senior management (fig 1).
Figure 1 Strategic themes, which underpin the Siemens BSC (courtesy of Siemens Communications UK)
The strategic themes gives people within the organisation an outline of the organisational priorities and a context in which to understand the objectives and measures they themselves are working towards.
Although the BSC and EFQM models were used differently in the organisations each had combined the usage as dynamic parts of a Plan, Do, Act, Check (PDCA) cycle, to actively manage the business. The BSC was used as the strategic tool to define the objectives of future performance and as a progress measurement tool. EFQM was both a diagnostic tool for strategy development and an appraisal of past performance.
Key Success Factors
Of greatest significance in the research was not the precise format of the models, but the identification of organisational factors, common to each of the organisations, which ensured their successful utilisation (fig. 2). The presence of these factors enabled the organisations to gain optimal value from the linking of quality and performance management.
Figure 2 The key success factors for effective quality and performance management
Ownership of Quality and Performance Management
The primary factor for success within each organisation was a single team, which owned the strategic, planning, performance and improvement processes. The presence and continuity of a team involved in both strategy development and the analysis of present performance allowed the development of a deep understanding of the organisation’s capability and performance. The team is also a constant competence for the organisation particularly when Board personnel change.
Such a team acts as both experts to the Board in facilitating their understanding and ownership of an organisation's present performance and as the focal point in communication to the rest of the organisation. They are able to help and direct the Board in raising crucial issues on performance data, and offering potential solutions.
Top Team Commitment
This has become something of a cliché, but that should not undermine the critical importance this factor plays in improving organisational performance. Support and active involvement of the top team was evident in the most successful of the case study organisations.
This commitment was demonstrated through active communication and support for individuals in the organisations. Moreover, the more committed top teams actively sought to understand the quality and performance management techniques used by the organisation. This would involve training in BSC, EFQM and other tools people within the organisation were expected to use. With such an understanding the top team are better able to support and drive forward organisational improvement.
Corporate Problem Solving
Using both BSC and EFQM were still only partial answers to corporate success for the case study organisations. Neither model helped the organisations resolve the problems identified in their use.
Each organisation had introduced additional corporate problem solving tools to facilitate agreement on problem definition and solution. For example, in Siemens UK the use of the Kepner Tragoe situational analysis toolwas used throughout the whole organisation to gain consent on problems and agree solutions. The use of such a corporate wide problem-solving approach also aided organisational learning.
The problem solving approaches adopted by each organisation were designed to address the complex, cross cutting nature of the problems in today’s business environment. Each of the tools was integrated throughout the organisation forming a common language and maximising the value of improvement activity.
‘Learning’ Mindset’
The willingness to learn and develop was also important for each organisation. The organisations sought to implement quickly and learn as they went along. Their BSCs underwent continual development and reflected real-life experience.. This contrasts with the way implementation is undertaken in the public sector with its much more planned and slower approach.
People within the organisations were also engaged in and entrusted to manage improvement activity, within a clearly communicated corporate strategy. The need to effectively leverage people’s knowledge, as a core value-adding process was both recognised and actively promoted and managed.
Partnering
The case study organisations had strong relationships with external partners which included customers, suppliers, stakeholders, and increasingly academic institutions. They also routinely sought out new partnering opportunities. These arrangements were not just something seen as ‘nice to do’, but the way they created mutual business benefit.
Partnering also allowed the organisations to broaden their understanding of the business environment, both current and future. This deepening understanding developed a greater ability to anticipate future conflicting requirements of customer and stakeholder segments: such developments are also reflected in the new emphasis on corporate social responsibility in the revised EFQM Model.
Conclusions
For the Inland Revenue the outcomes of this research has contributed to the further development of the departmental BSC towards a more simplified structure underpinned by effective performance management.
The research also forms the basis of a new approach to corporate quality improvement within the department. This approach will have a greater emphasis on linking with the departmental BSC: it will identify the costs and benefits of improvement activity: facilitate organisational learning and involve greater partnerships particularly with academic institutions to learn from the latest thinking on performance improvement.
A number of Universities have already expressed an interest in tracking this new approach for corporate improvement to identify and report upon the long-term benefits.