Monday, October 22, 2012

Total Quality Management AndBusiness Process Reengineering An Integrated Model

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OUTLINE


Introduction


Statement of Objective


Literature Review


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A. TQM


B. BPR


I. Common Grounds


A. Quality improvement and Process Focus


B. Top Management Support


C. Human Resource Empowerment, Teamwork, Training,…


D. Metrics and Measurement


II. Strategy Differences


A. Level of Change Radical vs. Incremental


B. Frequency of Change Innovation vs. Improvement


C. Risk and Pay Back Period


D. Focus Strategy and Customer


III. Strengths and Weaknesses


A. BPR advantages and disadvantages


B. TQM advantages and disadvantages


IV. Reconciliation and Integration A Model


A. Common Weaknesses


B. A Model for Performance Excellence


V. Conclusion


Introduction


The past two decades have witnessed the rise and fall of countless short-lived fads. Some have attracted a flurry of book, articles, and seminars; others have been completely discredited. Businesses have realized that there is a need to restructure their business practices and become more customer-focused. All recent business approaches and techniques have generally aimed at improving performance, increasing profits, gaining market share, and most importantly satisfying the customer who has become more educated and more demanding than ever. In the last two decades two organizational development models have dominated the business world for a considerable period of time namely Total Quality Management (TQM) and Business Process Reengineering (BPR).


Statement of Objective


This paper aims to shed a novel light on the two most recent and prominent management approaches, namely TQM and BPR. In an attempt to examine the interaction between radical BPR and incremental TQM with respect to change management, I shall briefly discuss the two constructs and contemplate the roots and basic tenets that underlie each. BPR has been referred to in the literature as ‘the successor’ of TQM and has been treated as an equal. I shall treat the similarities and common grounds among the two, as well as the differences between them. Next, I shall touch upon the weaknesses and highlights that distinguish each, and then move on to construct an integrated model in an attempt to reconciliate the two ‘opposing camps.’ In this model, BPR cannot withstand, but be an integrated part of the more comprehensive TQM effort, which is the broader platform for organizational change. As such, BPR is rendered as a technique to be employed under the more exhaustive TQM approach. I shall support my presentation by recent books and articles that have dealt with the issue, in addition to examples and case studies from the literature that have implemented change programs based on TQM and BPR principals. This paper gains significance, as the debate is more heated than ever concerning the survival, decline, or assimilation of the two strategies.


Total Quality Management


Over the past 0 years, quality has been hailed as the key factor for success. However, the organizational world has been increasingly moving away from the traditional ‘quality’ concept, as a function of inspection, control, audit, and review, as these are all now seen as non-value adding. Some of TQM’s basic concepts came out of Bell Telephone’s labs in the early 10s. Refined and developed by Deming, Juran, Crosby, and then Ishikawa and Taguchi, and later on others -- TQM calls for continually improving quality by using statistical measures to track, both, problems and the results of efforts to fix these problems.


Edwards Deming, the guru of the quality approach, describes quality as having no meaning other than that defined by customer needs and desires. “A satisfied customer is not enough,” says Deming in one of his early lectures of the 150s in Japan. “Business is built on the loyal customer, one who comes back and brings a friend.” A more recent definition of TQM offered by Almaraz in 14 maintains that TQM refers to a management process directed at establishing organized continuous improvement activities, involving everyone in an organization in a totally integrated effort toward improving performance at every level.”


The TQM philosophy provides the overall concepts that foster continuous improvement in an organization. This philosophy stresses a systematic, integrated, consistent, organization-wide perspective involving everyone and everything. It focuses primarily on the total satisfaction for both, internal and external customer, within a management environment that seeks continuous improvement of all systems and processes. The TQM philosophy emphasizes the use of al people, usually in multifunctional teams, to bring about improvement from within the organization. It stresses optimal life cycle cost and uses measurement within a disciplined methodology to target improvements. The prevention of defects and emphasis on quality in design are key elements of the philosophy. The elimination of losses and reduction of variability are important aims. Further, it advocates the development of relationships between all parties � employee, supplier, and customer. TQM provides a flexible, responsive management approach able to act and react to all the forces of today’s and tomorrow’s economic world. It focuses the resources of an organization on identifying and acting on the internal and external forces that will influence an organizations operations. TQM gears an organization toward continually improving quality, increasing productivity, and reducing costs to ease economic pressures. It focuses on total customer satisfaction through highest product and service quality at lowest life cycle costs to compete in the global environment. TQM stresses constant training and education, downsizing, and service value.


A further understanding of Total Quality Management comes from the terms that make up the name. Total means total comprehensive participation, i.e., the involvement of everyone and everything in the organization in a continuous improvement effort. Quality is total customer satisfaction, whether internal or external customers. Management is the leadership of an organization that creates and maintains the TQM environment. The basis of quality in TQM is a process-based structure consistent with the Deming PDCA Cycle Plan, Do, Check, Act.


Although it has been recently suggested that TQM is ‘out’ or that it was essentially a 180s phenomenon, the interest in TQM has scarcely subsided . Today such diverse practices are being done under the name of TQM that it seems to have lost its boundaries. Some consider TQM as a management attempt at cultural transformation and treat it as synonymous with cultural change and excellence. (1) Others consider it a method of cutting losses and, among other things, reducing waste and scrape while boosting customer satisfaction. There is no one agreed upon definition for TQM. Total Quality Management is both a philosophy and a set of guiding principles that are the foundation of a continuously improving organization. The terminology differs from one organization to another; however, there are four essential elements of all definitions of TQM and these are continual improvement, people orientation, quantitative methods, and, last but not least, customer focus. TQM integrates fundamental management techniques, existing improvement efforts, and technical tools under the disciplined approach focused on continuous improvement. TQM has been especially remarkable for its long tenure atop the heap and has been labeled ‘King of the Hill.’


Business Process Reengineering


Business reengineering is the concept of changing the fundamental way work is done in order to achieve radical performance improvement in speed, cost, and quality. The term BPR first appeared in the Information Technology (IT) field and was then used in the broader context of organizational change processes to refer to the use of modern information technology to radically redesign business processes. BPR will shatter assumptions and


simplify processes utilizing IT as an enabler. According to its originators, Hammer and Champy, reengineering refers to “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed.”


BPR can be better understood by analyzing the terms of its original definition. Fundamental rethinking is the reconsideration of the basic questions of “why do they [organizations] do what they do? And why do they do it the way they do?” Radical redesign means uprooting the old and creating new structures and processes. As such reengineering is about reinventing the business and not improving or modifying it. Dramatic refers to the achievement of quantum leaps rather than incremental improvements in BPR application, which demand “…blowing up of the old and replacing it with something new.” Hammer and Champy define the fourth term, business process, as a “collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.”


BPR is, above all, an improvement philosophy. It aims to achieve step improvements in performance by redesigning the critical processes through which an organization operates, maximizing their value added content and minimizing everything else. This approach can be applied to an individual process or to the whole organization.(the essence of BPR0) Povey explains that the basic premise of BPR, the rapid redesign of critical core processes of an organization, generates breakthrough improvements in the performance and result in a competitive advantage in the global market place.


Reengineering challenges the very raison d’ĂȘtre of the process. Hammer and Champy speak of three types of organization that undertake reengineering.. The first is the desperate type, in which crisis management has taken control in an organization whose costs keep piling up, products and services keep falling behind, and nothing seems to be going right. The second type is the organization that is not facing any immediate threat, but would want to improve its status before being caught up in the storm. The third type includes organizations that are ‘ambitious and aggressive.’ They want to enhance their performance and get a better leverage over their competitors.


Reengineering requires a shift to process orientation, teamwork, IT, and customer focus. Some good BPR tools include process mapping, value analysis, and half-life principle. The reengineering effort is characterized by focusing n process mapping, product and process elimination, process simplification and integration, process improvement, teamwork, and the active leadership and participation of top management in change. Recent field studies have provided evidence that “reengineering, is applicable, without any variations to the concept, to all types of organizations, be they manufacturing, service, non-profit, private, or public.”


I. TQM & BPR Common Grounds and Similarities


Before trying to point out the differences between TQM and BPR, it is more useful to find the similarities. Their similar aspects are summarized in Table 1. These points represent a wide viewpoint and are meant to highlight the broad commonalties between the two approaches, not to suggest that BPR and TQM are similar in their application methodologies. It is worth to note that while BPR and TQM share many of the same dimensions and goals, the two are not mutually exclusive and need to be done jointly.


A. Quality Improvement and Process focus


Both, TQM and BPR, are quality movements that seek to enhance an organizations capabilities for the future. Quality goals concentrate on the reduction of variation in processes and the application of effective measurement systems. Customers play a central role in being the determining factor of the standards of quality. In today’s world, quality is in the eyes of the beholder, i.e., the customer. It is the customer’s perception that counts. BPR has much in common with TQM in hs respect. The definition of the process to be reengineering is in part a technical matter, concerning judgements about where the problem actually lies in the light of available information. Within the organization, this customer-defined quality is translated into process-focus. At the heart of TQM is the idea that improvement comes from addressing the processes, which deliver the defective or inadequate end-results, rather than on concentrating on the results themselves. As for BPR, the process focus is an intrinsic paradigm of the reengineering strategy. Critical success factors are used to identify the organization’s core processes, which will undergo redesign. Conformance quality (meeting customer requirements) and perceived quality (exceeding customer requirements) improve profitability. Reducing waste and increasing productivity are natural by-products of a systematic process of quality improvement. As such, both TQM and BPR aim at improving an organizations operations to enhance its ability in delivering quality products and services with the ultimate aim of augmenting productivity, increasing profitability, and gaining market share.


B. Top Management Support


Setting the stage for quality improvement involves everything that the business does from becoming aware of the need for significant change to establishing a commitment to actually follow through. The desire to actually deliver quality involves senior management’s initiation and continued commitment, constituting the basic drive behind the whole process. It involves goal setting, barrier reduction, training, and leadership. Setting the stage means that one must create an environment in which business improvement is encouraged and nourished. A vision of ‘change for quality’ must accompany such efforts and be dispersed through out the organization. As management establishes the vision of what it wants to accomplish and where it wants to go, it must put in place ‘support systems’ to help employees understand and implement the forthcoming change. To ensure positive results, steering performance must be consistent with the vision.


Without executive sponsorship, the quest for quality, whether in TQM or BPR, is a joke. Leadership is the most important ingredient for launching and sustaining a quality improvement process. Leaders of firms need to establish clear, result-oriented goals and communicate their expectations. Management has the total responsibility for effective management of its quality campaign. Top management must take part in a company’s quality operation and to guide its quality systems. Executive commitment is not only about management, but also about leadership. Leaders establish unity of purpose, direction, and create an environment in which people can become fully involved in achieving the organization’s benefit. The role of management can be sensed in every step along the way. It provides leadership, develops the vision, establishes objectives, pursues strategy, establishes and monitors planning, monitors implementation, provides policy, conveys commitment, assures resources, eliminates barriers, participates, appoints responsibilities, assures customer satisfaction, presents information… and the list goes on and on.


Senior management’s role is to lead the change, not to manage it. It is responsible for shaking the barriers, i.e. removing road-blocks set up within the organization by people opposing change. Senior management must provide inspirational vision of the ultimate goal to be achieved


C. Serious investment in the human resource Empowerment, Teamwork, Training


For any quality campaign to be successful, you need top-down active leadership that facilitates real change and a bottom-up quality management improvement process in order to achieve real sustainable bottom line results. Management’s role is to invest in the campaign by motivating and involving others through broadening the ownership base of the idea. Only when employees develop a sense of ownership, will they embark upon it with true enthusiasm and motivation. Ownership must ultimately rest with the line operations in terms of engagement and accountability, for it is this human element of the organization that will ultimately deliver the quality and present the organization’s image to the final customer. Delivery of quality implies a commitment and dedication, not only by senior management, but also by every single person within the organization, and sometimes outside of it.


Harnessing the skills and enthusiasm of everyone is conditioned on providing employees with the adequate skills, tools, and authority to adapt to and adopt their new roles. TQM and BPR rely for their success on an active subject with interpretive powers. Empowerment and other associated ideas such a participative management, delegation of authority, and decentralization are based on placing responsibility for making decisions in the hands of workers. As one CEO put it “we are only as good as our employees and our employees are as good as we allow them to be.” Despite the risks associated, such concepts have proved to boost job satisfaction, increase motivation, reduce absenteeism, lower turnover, and improve the work environment. Empowerment is not optional, rather a pre-requisite and can be considered one of the basic pillars of both technique. Hammer and Champy assert that “empowerment is an unavoidable consequence of the reengineering project.” Nevertheless, such concepts are under used during application phase of BPR, resulting in various ‘people’ related problems.


From the concept of empowerment follows the concept of group-work or teamwork. Teamwork is a technique where by individual members of a team work together to achieve a common goal. Teams are an essential structural ingredient of both approaches. Teams are needed to meet the challenges of the environment. The increased value placed on empowering employees as a means of improving productivity while simultaneously improving employee satisfaction leads to increased reliance on teams. Employees need to work together to meet new challenges. The theme is central to both TQM and BPR, as it aids communication, improves cooperation, reduces internal competition and duplication of effort, and maximizes talents of employees on a project. Teams are a vital ‘management tool’ given that collaborative decision making allows for creativity. The need for fewer layers of management and more information for better communication and more efficiency will arise. Decreasing hierarchy will also remove organizational blockages to critical change. Hence, employee empowerment will facilitate and quicken the pace of work. Jack Welch, CEO of General Electric and leader of its rebirth in the 180s and the 10s, has become the spokesperson for organizational change. He described the critical importance of cross-functional teams and project teams in the new flattened architecture of GE with fewer layers of management. Cross-functional teams are essential to implement the new managerial role to yield increased value to customers. Teams go hand in hand with management’s assumptions of its new role and flattened organizational culture. As such, reorienting an organization towards quality requires teamwork, both horizontally and vertically, given the fact that teamwork can be very powerful as weaknesses and strengths of individuals are balanced, brainstorming enhanced, and skills and knowledge concentrated. It is vital to build profound knowledge in teams about the business, customers, associates, best practices, technology, and other factors related to the organization. As such, training is a must. Learning must precede thinking and a solid foundation for creative thinking need be established through benchmarking.


In his book, The Circle of Innovation, Tom Peters speaks of the ‘eraser mania.’ The problem with moving on is not about learning new things, but about forgetting the old ones. Organizations are so intent on pushing forward with the new that they forget to help employees let go of the old, thus, overlooking the personal losses of employees involves with change. They often hold on, resisting change. The reasons for this resistance include perceived loss of identity, value and worth in the eyes of the organization, disorientation, and the risk of failure. Continually training and educating employees is necessary due to the pace of change in today’s world, not to mention a TQM or BPR undertaking. Providing training is imperative, especially in the area of team member effectiveness that focuses on skills of active listening, resource sharing, conflict resolution, negotiation, and interpersonal skills � including how to handle contributions, input, and feedback from others about the work. At the same time, upper level management may require training in self-directed team activities to understand what their employees are doing. While an organization may have had in place an extensive training program prior to TQM or BPR, there is no guarantee that the program in place will focus on the skills and abilities needed after the change has occurred. Training should focus on both the technical abilities in the new roles as well as interpersonal skills. Training on teamwork, trust, and decision-making must be emphasized to aid employees in adapting to their new roles. Enhanced individual skills and attributes will better enable teams to be more flexible and responsive to change. Successful change attempts are heavily dependent on training the human resource.


An organization stands and falls with the people in it. It is therefore imperative to understand and anticipate individuals’ expectations, emotions and behavior. This includes managing for fear and resistance to change. Communication is crucial factor not only to an organization’s employees, but also to all its stakeholders, including owners, external customers, suppliers, press, …etc. These aspect are frequently neglected in implementation of TQM, and more so in BPR. While these are intrinsic aspects of the Total Quality Approach, they are only marginal where BPR is concerned. In comparison with TQM, BPR under-rates the ‘human’ dimension.





C. Metrics and Measurement


The selection and application of relevant performance metrics is critical to achieving success. Performance metrics must fit the business objectives and must be customer focused and driven. Todays quality standards are defined by the customers whose needs, desires, and expectations vary considerably. As such, a company should use the same measures as their customers in order to create a common ground for evaluating performance. Results should be directly measurable in terms of customer satisfaction, process cost, process quality, process speed, and ultimately in increased shareholder value and capital creation.


II. TQM vs. BPR Strategy Differences


Table shows a comprehensive list of differences between TQM and BPR, as provided by the literature.


A. Radical vs. Incremental


The major substantial difference between TQM and BPR, it has been argued, is the principle of radicalization. This ‘radical’ element of BPR change is a striking departure from the incremental change of TQM projects. Process reengineering approaches process improvement in a drastic manner wiping out the old and putting in place new processes. While process management is based on the concept of continuous, evolutionary improvement, process reengineering searches for breakthrough improvements and revolutionary methods for doing work. To encourage a radical organizational rethink, the starting point for reengineering is a blank sheet of paper. The reengineering effort tears apart the current process and systematically rebuilds it. Continuous improvement of TQM responds to growing customer needs and expectations and ensures a dynamics evolution of the quality management systems in a slow, but sure mode.


The pace of reengineering is ambitious, in comparison with TQM’s conventional change programs.


B. Innovation vs. Improvement


The other major difference between TQM and BPR has to do with the level of change. A number of authors view organizational improvement activities as points on a continuum ranging from incremental improvement to radical change. Due to its focus on existing processes, TQM will rarely lead to radical innovation; rather it brings about change in a snowball effect so that the end result shows significant departure from the initial state of affairs; but still change and improvement are no more than incremental. It is within this context that the debate arises as to whether or not BPR, as a vehicle of radical change and innovation, is becoming a substitute for the incremental improvement of TQM. The logic behind it is that as the external environment is becoming more volatile and a more radical approach to change is needed. The ‘clean slate’ approach in implementing BPR is in itself a thrust for creative thinking. Separating those responsible for scrutinizing the process from those charged with identifying the role of IT guards against any biases or hindrances created by current system limitations, processes, people, or activities.


The above argument leads to another theoretical debate concerning implementation and the relative merits of ‘clean slate’ verses a ‘dirty slate.’ While, in theory, the ‘clean slate’ allows projects to be modeled without contamination from the status quo, the ‘dirty slate’ approach is regarded as more pragmatic. Michael Hammer advocated beginning the reengineering process with a clean slate ignoring past business approaches and working toward a complete redesign of the entire organization. While this is the ideal approach, Hammer concludes that it may not be feasible in some organizations where limited resources demand that reengineering proceed one division at a time, beginning with the area of the organization that is most amenable to change; Davenport explains that while restricting possibilities for process innovation, and although more difficult in design, the ‘dirty slate’ approach is more realistic, financially viable, and easier to implement. One thing is for sure, BPR, most definitely, does not mean “tinkering with what already exists or making incremental changes that leave basic structures intact.”


C. Risk and Pay-back Period


The pace of reengineering is ambitious, in comparison with TQM’s conventional change programs. As such, high risk due to radical change is a natural consequence of BPR. Reengineering programs promise significant benefits � higher margins, lower expenses, and improved productivity, to name a few. But these efficiencies are seldom gained without trade-offs. The sweeping changes brought about by reengineering cannot fail to influence a company’s risk profile. Risk managers need to devise training programs that will help minimize the impact of change. Reengineering without training and education is unthinkable. Risk management is an inherent part of reengineering. Companies must assess the risks associated with changing business processes. TQM, in contrast to BPR, if of a much lesser risk. It involves neither the radical nor the dramatic changes that are an intrinsic part of BPR; rather TQM addresses the organization from a cultural standpoint that works on changing attitudes and behaviors over a long time period. A short-term focus in TQM weakens the organization and rarely ensures that the ultimate goal is achieved and sustained. It frustrates the people involved because they quickly realize that it takes time to develop the skills, attitudes, and knowledge required to make a difference to customers and to the bottom line. A long term focus, however, signals strong unwavering commitment and eventually wins over the people who must make it all happen. A long-term focus and a sense of urgency are entirely compatible attitudes in TQM and, in fact, are the right ones.


BPR, on the other hand, is a one strike or one shot thing. Its relative short time frame results in quick outcomes, which renders it even more risky. TQM’s incremental improvement-oriented changes are a long-term investment. Miraculous results will not appear overnight, especially because TQM is addressing a ‘culture’ issue. Changing attitudes, behaviors, and beliefs is the most difficult and lengthy process and organization can undergo.


D. Focus Strategy and Customer


TQM programs have highlighted the role of processes in delivering quality. In his book Out of Crisis, Deming stated, “I should estimate that in my experience, most troubles and most possibilities for improvement add up to proportions like 4% that belong to the system and 6% to special causes.” Peppard and Rowland explain that the system’ here refers to the process, i.e., the way things are done, and not who does them. However, TQM programs have placed greater emphasis on the people and techniques aspects rather than on the process elements. TQM’s process focus is towards control and measurement so that variation could be eliminated and quality raised. Implementations of TQM programs, in addition, have often reinforced functional boundaries, overlaying the concept of the internal customer as a means of improving the process interfaces between departments. The clear focus of BPR is processes and minimizing the non-value added content in them. In his book Beyond Reengineering, Michael Hammer speaks of the shift to ‘process centered’ organizations and explained that such a shift is about eliminating non-value adding work and establishing higher performance. Becoming process oriented is all about being customer outcome oriented. BPR seeks to generate ideal processes either from a ‘clean slate’ design, or from systematic redesign of existing processes. The target of the organizational change is the business process, and not the organizational culture, as is the case with TQM. The effectiveness of the change effort can, thus, be assessed with respect to the performance of those processes, not with respect to changes in attitudes, values, and beliefs.


As to the customer focus, Peppard and Rowland assert that while BPR’s primary concern is the external customer, while TQM has introduced more than one type of customer s through the concept of the internal customer.


III. Advantages and Disadvantages


While most researchers and practitioners agree that failures of TQM and BPR, in most cases, are mainly due to misapplications, this does not abolish theory pitfalls. A review of the literature reveals the major strengths and weaknesses of TQM and BPR. Both approaches have their advantages and disadvantages and bring about improvements, as well as handicaps. BPR rates highly in terms of innovation and IT utilization, while TQM provides the best practices for continuous improvement and customer satisfaction.


A. BPR


In addition to its dramatic quantum leaps, innovative opportunities, and short time frame, BPR possesses the privilege of exploiting Information Technology capabilities. However, its revolutionary nature can be very stressful on the human component of the organization and financially exhaustive.


1. Information Technology


BPR was the first large-scale systematic application of Information Technology (IT) to management. Information technology has become a key enabler for organizational change and is conceived as a mandatory component of all reengineering efforts. It is viewed as a one of the tools for achieving business process redesign. Information technology can provide help in managing large amounts if information efficiently. It can also provide significant improvements in operational performance by short-circuiting supply chains and industry value systems, and it can allow companies to re-consider their business scope. On an operational level, technological solutions can reduce manual work by creating electronic workflow and automating clerical routine tasks. IT also plays an important role in supporting knowledge workers by delivering information timely and accurately, and by facilitating communication and networking.


. BPR and Downsizing


BPR calls for making major changes to a business’s fundamental operations, with cost reduction as the primary goal. Because change associated with BPR often calls for reducing the number of workers, it has been closely associated with concepts like downsizing and rightsizing. The terms have been so confused, that many criticize BPR as resulting in ‘corporate anorexia’ and hollow-shell-corporations’ -- the terms referring to organizations that have viewed BPR as a short-term way to boost profit by gutting a company’s work force that it has lost its essential functions by such trimming. During implementation, BPR often translates into wholesale staff cuts. However, while downsizing may be an often-cited by-product of BPR projects, it definitely does not summarize the reengineering effort. Hammer did tackle this issue and has explained that “downsizing and restructuring mean doing less with less,” whereas reengineering means doing more with less. It is worth noting that, cost cutting approaches is a means for improving efficiency, but does not necessarily elevate effectiveness.


. Neglecting the Human element


The threats and risks that BPR brings along are scary to the people of the organization. Obliteration of existing processes as advocated by Hammer in his very first article on BPR is not only impractical, but also potentially disastrous and doomed to failure in the absence of a culture of change that soothes employees. Reengineering can impose a cultural upheaval on a company. In the absence of a clear vision, fear and turf protection become the main drivers of behavior as people worry that their skills become obsolete or will not be utilized in the new organization, thus loosing their jobs. Most cited BPR downfalls have been due to a failure of adequately addressing human resource questions and a general lack of management understanding and commitment to the reengineering effort. Such failures have been categorized into four elements failure to translate the future vision of the company into appropriate cultural and behavioral expectations that can be communicated to all employees; the absence of systematic means to benchmark current practices against those required to achieve the vision; the lack of a focused development process to help individuals close the gaps between their current levels and those required by the reengineering vision; and the inattention to the supporting HR systems that must maintain the vision. Reengineering neglects to deal adequately with the people of the organization who ultimately determine


whether reengineering works or not. The horrific effects of typical reengineering efforts on the morale and motivation of the survivors are often overlooked. Initiatives often fail because focus has been concentrated on the processes and ignored the people who make them work. Common long-term losses include moral problems


B. TQM


Total Quality Management has also been claimed to have its own pros and cons.


1. Functional Culture


TQM possesses the asset of an effective culture that emphasizes the role of the customer, whether internal or external. It is well known that corporate culture can have a significant impact on an organization’s economic performance. The culture that has resulted in an organization that has undertaken a quality campaign is greatly conducive to corporate goals and strategies. The customer, as well as process focus, the prevention versus inspection policies, fact-based decision making, the highlight on feedback, and most importantly, the care bestowed upon employees install an open responsive culture. The weight placed on continuous improvement through continual learning is significant. Today, organizations have become information-processing networks capable of enhancing their positions only through learning. Learning is a major core value for an organization seeking excellence, as it has become synonymous with quality. A total quality management campaign entails a complete involvement of the entire organization in a management led attempt to achieve success. In such a culture, the employee is king, as he/she is viewed as the ultimate pronouncer of quality. Employees are trained and empowered to take responsible decisions and are considered as collaborates in organizational work. It is such a culture that distinguishes flourishing organizations and allows them to acquire the competitive advantage necessary in order to compete.


. Lack of Strategic Impact


TQM has been criticized on many accounts. Some have argued that the element of continuous improvement mentality inhibits learning. Others have condemned it on the grounds of lacking innovation and radical capability, stating that “incremental change isn’t enough for many companies today. They don’t need to change what is; they need to create what isn’t.” Yet, others have denounced it as deficient in IT focus and utilization. However, the most captious criticism of TQM has been its lack of strategic impact.


VI. Reconciliation and Integration


It is apparent that that there are major problems within the foundations of each individual approach. However, there is also a clear opportunity to unite them to fill each other’s gaps. In an attempt to re-conciliate the two approaches, two theories have erupted. The first integrates BPR under TQM by using the former as a tool or a subset of the latter. Leach considers TQM more likely to lead to success and concludes that BPR is more of a “… designed tool for TQM, but it is not a substitute.” The agreed upon view in this camp is that it is more constructive to incorporate BPR as a valuable tool within the framework of TQM. As Macdonald put it, “TQM provides the essential cultural framework to enable BPR.”


The second camp, on the other hand, entertains the idea of applying TQM after BPR as the latter builds the platform and prepares the stage for the former. TQM can be used to continually improve the company after BPR has radically changed it. Many supporters of this view have summarized it with the clich� “revolutionize and then evolutionize.” But even so, BPR cannot stand on its own without follow up. This follow up is incorporated in the continuous improvement offered by TQM.


While both approaches offer valid arguments, there seems no need to adopt an either/or position. Practitioners can create an integrated model where both incremental and quantum improvements are possible within a continuous improvement environment. In such a model, the building blocks are an integration of the best practices of the two methods building on the strengths of both and eliminating most of their individual weaknesses.


TQMs stable culture, people participation, and evolutionary nature can be used to eradicate or neutralize the stress and fear caused by BPRs revolutionary nature. The changes commensurate with BPR usually scare employees and de-motivate them. For true success in todays environment, management needs to consider employee participation, for which TQM creates the proper cultural milieu for change. BPR, on the other hand, provides the ‘quick strike’ and innovative capabilities, in addition to the best practices of IT. TQMs main contribution would be a continuous change and improvement methodology, without which the solutions that BPR offers will bear little fruit. Both kinds of change can and should be


pursued, even though their requirements are different.


A. Common Weaknesses


Nevertheless, the two approaches fail to address some common weaknesses, which, if left un-addressed, become weaknesses of the integrated model, rendering it insufficient and ineffective.


1. Lack of strategic impact Not conducting strategic business planning to set the future direction of the company prior to starting the TQM initiative has caused major failures. The inherent lack of strategic integrity embodied within TQM is considered to be one of its main flaws. Similarly, in most cases BPR is undertaken to achieve medium-term cost and time saving rather than longer term strategic benefits. A greater focus on learning at the expense of the preoccupation with cost and time could increase the strategic impact of many BPR applications.


. Lack of `people focus The survey conducted by the authors (18) suggested that TQM offers more people focus than BPR. However, the impact of change on people, and the way organizations are dealing with their people, is still considered a problem within both. The failure of many recent large-scale efforts at corporate change can be traced directly to employee resistance, lack of support, lack of enthusiasm and generally lack of the right culture to support the framework.


Managing business productivity has essentially become synonymous with managing change effectively. To this end, companies must not only determine what to do and how to do it they, but also need to be concerned with how employees will react to it. It is becoming increasingly clear that the engine for organizational development is the people who do the work. Without altering human knowledge, skill, and behavior -- changes in technology, processes, and structures is unlikely to yield long-term benefits. ‘Human development has been viewed as a more suitable alternative to `traditional organizational development in a strategy for bringing about dramatic performance improvements. The new work pattern is flexible working hours, knowledge workers, working from home, etc. So while these patterns emerge, organizations must change the way they deal with their people to yield maximum benefits. The success of an organization lies more in its intellectual capabilities than in physical assets. The capacity to manage human intellect and to convert it into useful products and services is fast becoming the executive skill of the age. Thus, the model to be developed will be people oriented where high performance can be achieved only through people.


B. The Proposed Model for ‘Performance Excellence’


Organizations are unique and each must find its path to success by continuously learning and customizing best practices. Thus, this model shall be set up in such a way so as to present a broad framework of generic ideas applicable to all organizations. The model can be considered a recipe; a mixture of best practices from BPR and TQM. However, it is not suggested that such a model will be a silver bullet. Its effectiveness depends on thoroughly understanding the business and the people in it. The aim of the model is to help organizations achieve performance excellence by ensuring a healthy balance between stability and continuous change. Stability comes from a bedrock of culture and values shared by organizational people, supported by a stable strategy, and systems that change only in a `creation or reorientation effort. Continuous change comes from continuous learning, and both aspects rely on fully committed and educated people. Hence, the objectives of the model will be to focus on delighting the customer, to emphasize organizational people as the main competitive advantage and to develop a commitment to continuous learning and improvement;


The model proposes turning organizational attention from cost-cutting and staff reduction


to employee well-being by proposing an equal emphasis on the three main pillars of organization development, i.e. process, people, and information technology. The `process and `IT aspects, however, are continuously changing subject to daily improvements, and can easily be copied by competitors. Thus, the only source of competitive advantage is the organizations people (6.7% of the respondents agreed that having trained, motivated and well-led organizational people would result in performance excellence). According to John Jr. Welch, CEO of General Electric, “the pace of the 0s will make the 80s look like a picnic -- a walk in the park. Competition will be relentless. The bar of excellence in everything we do will be raised everyday.” Successful organizations in the next century will work on the edge of chaos where they must be spontaneous, adaptive, and alive. This, in turn, suggests the


need for human and system flexibility and continuous learning within an organization held together by consistency of purpose, through a clear shared vision and open communication. Processes and people surround, and work for, the customer, and are held together by a clear set of organizational values and goals.


As such, the main building blocks of the model are as follows


1. ‘Customer obsession’ Past attempts to achieve and retain competitive advantage have largely looked internally within the organization for improvement. However, more so in the future, a major source for competitive advantage will come from more outward orientation towards customers and competition will focus on superior customer value delivery. The customer who should enjoy all the attention is the end user, as opposed to internal customers, suggested by TQM.


. Vision and values is he substance that binds the organization together. This includes the strategic planning and management capability, and outstanding leadership. The model proposes integrating the latest techniques of strategic management and thinking within the planning, implementation, and assessment stages. It is also suggested that the main competitive advantage for which organizations must aim is creating a `self-renewal learning culture, with the main competitive weapon being its people. The function of strategic planning in the new management model is to align all the efforts of the organization to customer satisfaction, quality, and operational performance goals. Companies use their strategic planning processes to drive the whole improvement process.


. Business process excellence Process excellence combines the incremental improvements of TQM and the more revolutionary steps associated with BPR. The major enabler for the coming century will be IT. Potentials of IT cannot be left unrealized by an organization aiming to survive in the future. However, businesses must creatively integrate IT with human expertise to meet customer needs.


4. People Organizational people development should be the focal point as the source of future success. Workforce development is a top priority because it is the leverage of an association. The model aims to set out best practices in a culture of participative management, team structure, reward, training and development, recruitment, motivation, commitment, communication and knowledge management.


TQM is based on a set of philosophies that emphasize continuous improvement in processes to increase customer satisfaction. To accomplish this objective, TQM requires flexibility and cross-training, cross-functional team problem solving, employee empowerment and ownership of the process. These are also essential to reengineering. For managers and employees ignorant of TQM and its requirements, a jump into the reengineering bandwagon may spin out of control. Reengineering is certainly risky, but it should be a calculated risk. Professionals experienced with TQM possess the skills necessary to organize and plan the changes designed to increase customer satisfaction, and are, thus, better prepared to utilize those skills on a large scale. In the external environment, for any company, change has become the only constant. Technology changes, information change, competition changes; everything changes and the organization itself need to change. In the midst of this flux rises the need for another constant to counter the effect of change, and that would be a culture of change a culture that adapts the organization to new trends, introduces innovations, fosters creativity, and above all prepares its human element to the turbulence of change paving the way and soothing along the way.


An Example


BTNI, a semi-autonomous unit subsidiary of British Telecommunications plc. is regarded as having a ‘leading edge’ in managing quality and change. The company is an example of an organization that believed reengineering in a crisis situation is inappropriate as crisis in itself promotes fear, confusion, and panic, none of which is conducive to focused BPR. As such, BTNI undertook a number of change strategies before embarking upon BPR, namely BS 5750 / ISO 000 accreditation, total quality, and finally process redesign. Senior management views incremental change brought about by TQM as greatly valuable, but on its own is not enough. They note that TQM has introduced some surface changes to behavior, while underlying processes, which maintain sub-optimal performance, remained untouched. Sometimes shots of radical change that can only be brought by BPR are also necessary. BTNI also notes that upon embarking upon the BPR project, teams made great use of already documented end-to-end processes as part of the TQM efforts. The reengineering implementation teams had to take risks in pursuit of excellence, relying on change management skills and techniques acquired from the TQM experience. (7)


VII. Conclusion


TQM and BPR have arguably been so influential due to the amorphous and comprehensive nature of their philosophies. All things considered, TQM, as well as BPR, are applicable to all business sectors, encompassing all aspects of the business and touching upon all corners of an organization without any constrictions. Neither approach guarantees success. It is not a case of ‘follow the rules in the book and you’ll hit the jackpot.’ It all depends on organizational intelligence and ability to adapt either approach to its own size, form, products, and management.


This paper has presented an argument for integrating BPR and TQM. The individual strengths and weaknesses of each have been shown to complement one another. From the evidence presented, it can be concluded that the way forward for organizational development is an integrated model, one that builds on the best practices of BPR and TQM and adds strategic planning and a stronger focus on people. Although ‘processes’ and ‘IT’ (the main focal areas in TQM and BPR, respectively) are crucial components for success, they are the easiest to perfect in an organization, and can be easily replicated by competitors, thus, providing little competitive advantage. People and knowledge management are perceived to be the main sources for competitive advantage in the future.








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