Juhani
Anttila
Venture Knowledgist Quality Integration
Helsinki, Finland
www.QualityIntegration.biz
BUSINESS-INTEGRATED
QUALITY MANAGEMENT A Company Case, an example of a long
term development of quality integration
Abstract
This
paper deals with the development of quality integration through
a practical example, the company case of Sonera Corporation from
1960's to the first years of 2000 century. Sonera is the leading
telecommunications service provider - a telecom operator - in Finland.
This case is an example in applying internationally recognized concepts,
principles and practices, e.g. the ISO 9000 standards and performance
excellence models, in an innovative way. Through this kind of case
experience also general conclusions may be made to help corresponding
development in other organizations.
Historical background and development
Over the
last decades of 1900 century, quality concept was adopted at Sonera
Corporation and within its predecessors, and the overall attitude
towards quality was developed correspondingly. All this took place
along with the overall development in the telecommunications technologies
and the business environments of the company, e.g. changing from
a domestic state monopoly organization to a business company in
competitive international markets.
One can discern
the following dominant stages pertaining to quality development
in these decades:
- 1960: Emphasizing technical specifications, ensuring the problem-free
functioning of the telephone network and reliability of technical
equipment and systems
- 1970: Recognizing international standards (ITU Telecommunications
Recommendations and IEC Electrical Standards) for telephony, providing
standards based quality services, setting requirements for and controlling
suppliers of telephone network equipment and systems
- 1980: Aiming at customer perception and satisfaction pertaining
to the company's products, establishing first experiences with the
ISO 9000 standards already in their early draft phase in the beginning
of the decade
- 1990: Entering the Quality Management approach related to business
performance improvement and understanding comprehensively the ISO
9000 standards series and using them simultaneously with performance
excellence models. Creating the concept "Quality Integration" to express how to bring all quality related aspects in the organization into a close and seamless union with the organization's business management system.
- 2000: Integrating quality management by practical means with business management,
producing benefits and satisfaction to all stakeholders, striving
for excellence in business performance in contemporary business
environments, and responding to e-business challenges
Basic principles for the quality integration
approach of the company
The modern concept of quality integration that implies professional
quality activities integrated with business leadership and management
was applied at Sonera. Quality integration was related to quality
management principles, tools, and practical solutions (procedures)
especially covering subject areas considered within the internationally
recognized ISO 9000 standards and performance excellence models
(quality awards criteria). Standards and excellence models were
understood as very similar general references for quality management.
Additionally many other different information sources were used
for developing continuously Sonera's quality approach (see figure
1).
Figure 1. Multifarious sources of information were used when developing
company's quality management approach and aiming at satisfaction
of all interested parties and excellence of the company's business
performance
Sonera's
quality development was based on practices to support in a consistent
way the two interrelated areas of quality activities that are familiar
from the ISO 9000 standards:
- Quality Management (QM) referring to the internal "systematicity"
of the company's management and leadership to strive for business
performance excellence
- Quality Assurance (QA) referring to all those measures through
which the company creates and strengthens confidence and trust among
its stakeholders, especially customers, in company's abilities and
products. In fact QA is always a part of QM
Business integration in the quality
approach
When one
would like to emphasize the comprehensiveness of the quality approach
one could also use the concept TQM (Total Quality Management) that
is popular from a lot of literature. However, in practice the both
concepts, QM of ISO 9000 and TQM in general, mean the same. Therefore
the term TQM was not formally used at Sonera.
Essential features of the company's quality approach during the
1990's included:
- A strong commitment of the president and CEO. E.g. he acted many
years as the chairman of the corporate quality council consisted
of about ten senior level business leaders and no quality experts.
Company's vice president of quality integration, however, was secretary
of the council.
- Vice president of quality integration with deep knowledge of fundamentals
of quality management and long experience in the company was actively
networked with recognized national and international sources of
knowledge. E.g. he was a member of ISO TC 176 (the standardization
committee for ISO 9000 standards) and assessor of the European (EFQM,
European Foundation for Quality Management) and the Finnish national
quality award, and he was also active in benchmarking with world-class
companies globally.
- Creativity (see figure 2) in applying standards and excellence
models and other useful reference materials concurrently for the
company's business benefits in an innovative way.
Figure 2. An innovative approach for applying general models and
references, e.g. the ISO 9000 standards for the company's quality
management development for ensuring competitive solutions from the
business' point of view. The new issues of "Whats" and
new ways of "Hows" were strived for. In fact, the "Hows"
are more important than the "Whats".
The aim of
QM approach at Sonera was to strive for company's strategic and
operational goals. QM was seen as a special expertise for enhancing
effectiveness and efficiency of business management and leadership
and business processes. Thus, genuine realization of QM practices
took place in real business activities both in company's strategic
leadership as well as in the operational realization of company's
products (telecommunications services). This is just the issue of
quality integration. In this approach all relevant stakeholders
were also taken into account in accordance with their appropriate
roles.
Use of effective
professional expertise of quality integration aimed at increasing
business performance towards business excellence through:
- Increasing competence
- Diminishing uncertainty
- Releasing resources of business leaders to primary business tasks
- Avoiding amateurism
- Gaining respect of professionalism
Quality management approach was seen essential for company's business
success and for relationships or partnerships with customers and
suppliers. In fact, quality management equals quality of management
and quality assurance practices to create and strengthen confidence
among organization's customers and other stakeholders. The well-known
standard-based concept of Quality Management System (QMS) was factually
understood as a good or even excellent systematic management. Consequently,
quality integration is necessarily an organization-dedicated solution
and it places great demands on continual business improvements.
The concept quality system was not in use at all because it easily
leads to separation of quality from business management.
A challenge
for QM realization was to enhance positive flavour into Sonera's
"Smart Partner" business brand through various professional
means that were consistent both with respect to one another and
aligned with the company's strategic course. In this respect, the
marketing catch phrase used by Sonera, "Make Things Click",
was most appropriate for quality management and assurance purposes,
too. Thus, Sonera's QM approach included the following main principles:
- Focusing on supporting the strategic goals of the business
- Ensuring consistency of different QM measures in order to strengthen
one another
- Aligning the whole business vertically and horizontally along
with the main business issues
- Aiming at comprehensiveness and a scope covering the entire corporation
- Integrating QM measures with management of business processes
- Striving for a comprehensive and systematic approach, "systematicity",
instead of building any separate systems such as quality systems
These Sonera's QM principles provided a company-dedicated supplement
to well-known eight quality management principles of the ISO 9000
standards and to the core concepts of the business excellence models.
Sonera's QM approach was well
harmonized with the company's business values. On that basis also
the quality policy was defined in accordance with the general definition
of the ISO 9000 standard. The following intention and direction
towards quality was considered by the quality policy statement of
the company:
- We always act so that the customer receives what he or she needs.
- We do what we promise.
- We improve our activities and their results continually so that
they will be better and more effective and efficient.
Company-internal quality expertise
At Sonera,
QM was an area of special expertise for which there were quality
experts over the whole corporation. External consultants were not
used remarkably. Quality experts formed an internal network, BEST
(Business Excellence Support Team), in the corporation. This network
also had direct contacts with significant external QM experts all
over the world. Thus, the aim of QM support function was to maintain
a virtual and network-like quality organization. In practice, however,
the realization of QM took place in business processes through the
initiatives and measures of business leaders, managers, supervisors,
and performing personnel. Thus, the responsibility and duty to implement
QM principles and tools in everyday business lied squarely on their
shoulders. Quality experts acted as advisors and facilitators. They
were responsible for the sound and appropriate principles and methodology
for quality integration.
Corporate-wide infrastructure for continual
development of the QM
In
order to realize QM objectives in all parts of the company and at
all levels of business and business management, an organization-wide
management structure, a leadership infrastructure framework was
defined and developed. The framework model (see figure 3) was created
at Sonera in early 1990s. This model covered company's all business
functions in a natural and flexible manner. Over the years, the
model also abled to accommodate efficiently to various organizational
changes as well as various new emphases in the business and in quality
thinking. This made it possible to develop QM in a more sustained
manner than being based on the formal organizational structure and
continually depending on numerous and frequent organizational changes.
This framework model utilized the most exemplary international ideas
and was based on what had been learnt over decades particularly
with business partners and by global benchmarking. This model was
also the foundation for applying the ISO 9000 standards and performance
excellence models.
Figure 3: Sonera's QM realization model and management framework
consisting of four levels of QM learning and competence within the
corporation
There was no distinct
quality systems or QM systems in use at Sonera, and nor should there
had been anything of the sort, as the aim was that QM was an integrated
part of business. Indeed, quality management system is also in the
ISO 9000 standards understood as a concept for systematic approach
or mental system but not as a distinct, physical system. At the
corporate level the quality management system was understood as
Sonera's QM realization model (figure 3). In the different strategic
business units and supporting units and at the operational level,
the quality management system was realized through the system of
interlinked business processes.
Preformance excellence tools
Clear guiding
ideas and principles concerning quality and QM as well as a comprehensive,
company-wide realization model for organizing the "ideas"
were not enough for getting quality happen. Practical means, tools,
methods, etc., especially relevant to multifaceted management methodology,
were available to get the approach concrete in practice. For this
purpose, a collection of management tools was created at Sonera
during the years. Only partly these tools were created and maintained
by quality experts. In addition to direct quality-minded tools,
Sonera's "Business Excellence Tool Kit" included also
tools for financial, human resource, and risk management, as well
as technology management, acquisitions and marketing. There was
a systematic procedure for the maintenance and development of the
tools (including tool hierarchy, tool descriptions, tool owners,
and tool-management process). The most essential quality-originated
tools of Sonera were:
- Process management model
- Project management model
- Malcolm Baldrige self-assessment procedure
- Process auditing (assessment procedure of process performance)
- Benchmarking procedure
- Sonera Smart Scorecard procedure
- Problem solving and improvement procedures
The overall intention was
to seek actively original sources of information for quality management
methodology (see figure 1) in order to be able to avoid too extensive
use of services of external consultants. For example, the ISO 9000
standards were utilized through participating right from the start
in their drafting as Finland's national representative and expert
in the international standardization committee ISO TC 176 for quality
management and quality assurance.
QM and QA consistency through business
processes
Because QM
implied effective and efficient realization of business management
and leadership in a systematic way and QA constituted a part of
QM, there was at Sonera no intention to do anything "extra"
in order to implement QM or QA e.g. according to the ISO 9000 standards.
According to figure 4 QM and QA:
- Were based on the continually improved business processes and
activities that support company's strategic direction
- Strived towards customer-focused solutions to provide added value
to customers
- Utilized principles and practices that were internationally regarded
as superior
Figure 4: Consistency
of Sonera's integrated QM and QA approach
Business
process management had a central place in the implementation of
Sonera's QM. Indeed, process improvement measures constituted the
most important area for realizing quality integration. There was
a particular process management model at Sonera. This model had
been developed vigorously during more than ten years on the basis
of practical experiences and numerous international examples. Sonera's
benchmarking procedure was also primarily aimed to improve process
performance. In benchmarking, the organization learnt from best
practices already used in other organizations, especially in other
fields of business.
Concerning
quality assurance QA, it was understood at Sonera that this, too,
was to be utilized innovatively. QA could not be based solely on
customer's stated requirements. Quality assurance provided information
of process effectiveness and efficiency tailored to the needs of
the individual customers or customer segments. In general assurance
was achieved through customers':
- Confidence to delivering: Products were delivered timely
- Confidence to performing: Products function the way it was supposed
to
- Confidence to cooperation: Product that had been delivered to
customer was looked after. Information security was treated appropriately
- Confidence to future competence: Technology and trends were actively
followed up and taken innovatively into account in products development
In a modern
way, quality assurance was understood as a service that provided
added value to customers. In a competitive situation, the aim here,
too, was to create superior solutions. A general point of departure
for quality assurance was provided by the clauses of the ISO 9001
standard but the standard does not set any restrictions for innovative
solutions (see figures 2 and 5).
Figure 5.
Quality assurance is quality related communication between supplier
and customer. It may be realized in an innovative way e.g. utilizing
new communication means. e-Certificate implies QA solutions using
e-business technology, especially Internet.
The emphasis
at Sonera was on bilateral quality assurance plans and agreements
between the customer and the company instead of third party certifications.
Another reason for this emphasis was that there was no genuine formal
obligations pertaining to certification or registration and thus
neither there was any real need for general certifications. Major
stakeholders had the following priorities in their interests:
- Consumers: They expected a good product performance and low price.
No formal quality assurance was needed.
- Business-to-business customers: They expected confidence relating
to company-dedicated advanced and tailored solutions. General type
of standards or certificates based quality assurance was not adequate.
- National authorities: They were responsible about the minimum
national performance level (or grade) of basic services. Appropriate
performance reports from the service providers were necessary and
enough for quality assurance. However, the service provider could
not be competitive by only fulfilling these minimum requirements.
Comprehensive QM development through
organizational learning
Successful achievements of operational business performance results
through the quality management approach were based on the following
three corner-stones of the "Domain of action" (see figure
6):
- Understanding the issue, i.e. the ideas and principles directing
business activities excellently
- Innovativeness of the corporate-wide leadership system
- Effectiveness and efficiency of management tools
Quality was enhanced via two intentions. Reactive development was
achieved reactively through problem solving based on facts. However
more was achieved when opportunities, challenges and innovations
were the basis of performance development and taking proactively
into account the existing strengths, competitive advantages, and
opportunities ("Domain of change" in figure 6). The reactive
method in its backward-looking nature is never as effective as the
future-orientation. The improvement was done through utilizing well
established methods including e.g. performance evaluation, analyses,
and benchmarking (see figure 7).
Figure 7. A comprehensive quality management approach for establishing
foundations of operational business activities and their continual
improving
The regular evaluations of the existing business performance and
strategic decisions on goals and actions were important measures
in continually improving company's business performance. Implementing
measures took primarily place through increasing effectiveness and
efficiency of business processes. All this belonged to the operational
side of QM, i.e. the domain of action (figure 6).
Assessing
process performance constituted a central element of operational
QM. The assessment procedure was developed on the basis of ISO 9000
auditing principles as described in the standard ISO 19011 and by
combining ideas from business requirements and performance excellence
models. In assessing process performance, the focus was on the critical
evaluation of procedures applied in the processes and process results
achieved through their implementation. Based on assessment results,
Sonera had a corporate-wide process performance reporting practice,
with which one tracked how the performance of all business processes
had been developed as entirety (process framework) and per single
business processes in the corporation.
In order to assess comprehensively the overall development of a
whole business and its organizational learning, the performance
excellence (quality award) model approach was applied. These assessments
were applied at Sonera as internal self-assessments by boards of
directors in different business units since 1992. The assessments
were based on the American Malcolm Baldrige criteria, which had
been used as basis in developing Sonera's own approaches and assessment
tools. The American model was more clear, effective and efficient
that the European one (EFQM, European Foundation for Quality Management).
By utilizing general performance excellence criteria, a business
unit was able to be placed on a "global map" of overall
business performance. One determined the level at which
- the business itself was
- the partners and competitors were
- the best Finnish, European, and international companies were
Sonera's business units applied
during the 1990's three times the Finnish National Quality Award
in order to "calibrate" its internal self-assessments
with a more general assessment scale. Thus, even participation in
the quality award competition was understood as a part of self-assessment
to improve business performance.
Unique solutions for the future
General conclusions
and lessons learnt can be drawn from Sonera's experiences of company-dedicated
QM implementation. When implementing QM, clearly recognized QM principles
and effective professional methodology are useful to be employed
in a natural and innovative manner integrated with company-specific
business emphases and management infrastructure. General ISO 9000
Quality Management Principles and Core Values and Concepts of the
quality award models were useful when creating bases for the company-dedicated
approach. When striving for competitiveness practical experiences
underscore:
- Recognizing business performance excellence instead of a narrow
quality thinking
- Striving for flexible realization of quality of management and
leadership instead of distinct and vague quality management (i.e.
management of quality)
- Adopting organizational learning instead of problem solving and
continual improvement
- Applying the "systematicity" (systematic approach) of
the quality of leadership instead of formal and distinct quality
systems
- Using business-related principles and actions of the quality of
leadership instead of formal and general quality assurance requirements
only
- Setting stretched business objectives instead of minimum standard
requirements
- Aiming at innovative and unique solutions instead of stereotyped
systems
- Relying on internal business performance self-assessments instead
of third party audits and certifications of "artificial"
quality systems
- Getting advantage of tacit knowledge instead of only records of
explicit data and information
- Having genuine impacts on the company's quality approach and success
by the behaviour of the top management.
- Using company's own internal expertise and effective cooperation
with world-wide quality experts' network instead of external
consultants
Basically, effective implementing company-dedicated business integrated
QM did not call for any extra measures or investments. General information
sources especially ISO 9000 standards and performance excellence
models were utilized as reference materials for appropriate measures.
Experiences proved that it is always worthwhile to improve the existing
quality management "systematicity" of the company based
on a systematic methodology. For QM the company must be always ready
but never finished.
Managing for sustainable business success through quality is only
possible if the responsible top management is aware and actively
and practically committed in his / her own role to get quality happen
in the whole company. Additionally, it is needed a productive cooperation
between business leaders and quality experts.
Epilog
Through
the 1990's the CEO of Sonera was genuinely interested in developing
quality management in the corporation in a professional way. He
retired by the end of year 2000. After that the company got a completely
different kind of CEO and President. His emphasis was on bold investments
into the international markets of the next generation of mobile
telecom technology and the real expertise (including quality related
methodology) was no more appreciated. In this business direction
the company lost a huge amount of money and also its credibility
in a very short period of time. As a consequence the company was
merged into the Swedish Telia Corporation, and Sonera continued
its activities as an operational country unit in Stockholm, Sweden
based TeliaSonera Corporation. Major part of the quality related
development results and investments of the 1990's were also lost.
Now after a few years' depression and disorder, TeliaSonera Finland
Ltd. is aiming again start from the existing reality its new quality
management journey but it is not seen any strong commitment from
the top management or innovative approach. E.g. the company has
strived for a formal ISO 9001 certification by quality experts and
the third party.
References
1. Anttila, J. (1998). "Creating a corporate culture that
embraces performance measurement - A case study from Sonera Corporation,
Finland." Focus on Change Management, issue 46, July/August
2. Anttila, J. (1998). "What TQM is and what should it be?"
The Best on Quality, vol. 9, Milwaukee: ASQ Quality Press
3. Anttila, J and Vakkuri J. (2000). Good Better Best. Helsinki:
Sonera Corporation.
4. Anttila J and Vakkuri J: (2001). ISO 9000 for the creative leader.
Helsinki: Sonera Corporation
5. ISO (2008): ISO 9000 standards family. ISO TC/176/SC2 Home Page
6. National Institute for Standards and Technology (2008): Malcolm
Baldrige National Quality Award, Award Criteria. Washington: National
Institute for Standards and Technology
7. Senge P., Roberts C., Ross B., and Kleiner A. (1995): The Fifth
Discipline Fieldbook. London: Nicholas Brealey Publishing Limited
8. Kaplan, R. and Norton, D. (1996). The Balanced Scorecard. Harvard
Business School Press
Reference links
From the following links you may find more information on the topics
considered in the main part of the text.
[This material
has been presented in different forms in differerent international
seminars or conferences, e.g. in London, UK 1998, Mumbai, India
1999, Moscow, Russia 1999, Lahore, Pakistan 2000, New Delhi, India
2001, and in Fribourg, Switzerland 2004, 2005, 2007 and 2008]
