Pat Townsend & Joan Gebhardt

Checking Back In With the CQP Process

As regular readers of this column know, one of the authors (Pat) is currently the director of a quality process at a mid-sized (850 employees and growing) insurance company, and every several months, this column chronicles the progress of that process. Admittedly, this is done in part to strengthen the credibility of the other monthly columns--to emphasize that what is written and recommended isn't being e-mailed from some ivory tower or from the latest stop on the speakers' circuit, nor are they based on untried ideas that "sound good" or "make sense" or on third-hand accounts of others' efforts. Primarily, these "how are they doing" columns are written for the lessons they offer on their own.

 This column will first list some specific accomplishments and then detail the surrounding environment established by the leadership of the organization, which made those accomplishments possible.

 As a reminder, the decision was made on March 28, 2000 to define and implement a complete quality process at the Insurance Center. On Sept. 14, 2000, the quality team element of the process was formally launched, completing the initial CQP implementation--a key element of which is 100-percent employee involvement. Between March and September, while business was beginning to increase significantly, a lot took place:

* A series of strategic planning workshops were conducted with the senior executives. These resulted in clear statements of the organization's mission and vision as well as spelling out a six-part strategic plan (now expanded to seven parts).

* A series of process analysis workshops took place to help the operational departments assess and re-shape their processes.

* All employees above the supervisor level went through an intensive three-day leadership training course (in groups of 20).

* The quality team procedures were developed, team leaders were trained, methods for saying thank you were agreed upon, a Quality Idea Tracking Program was designed and built, etc.


As of Sept. 14, 2001, the following results were tallied:

* 81 quality teams (every person on the payroll on at least one team)

* 1,455 quality ideas logged onto the Quality Idea Tracking Program

* 555 quality ideas implemented and certified

* $2 million in annualized "hard" dollar savings

* $3.3 million in annualized "soft" dollar savings. (At $15 per hour, that represents 220,000 hours of capacity for work that were available to do needed work.)

* $13.4 million in annualized impact from the results of the process analysis workshops.


 What was the impact on the bottom line? Comparing the business results for 1999 and 2001, the company's income rose 107 percent while its payroll costs increased by only 24 percent and its use of paper declined. Of course, not all of the increase can be attributed directly to the CQP process. But, along with improvements in technology and the impact of better leadership and teamwork throughout the organization, quality has, without a doubt, been a major factor.

 What is a CQP? There are seven components of a complete quality process; next month's column will revisit these components, using examples from the past year to illustrate their implementation. A complete quality process consists of:

* Top management commitment

* Leadership

* 100-percent employee involvement--with a structure

* Communications

* Training

* Measurement

* Recognition, gratitude and celebration


 But what about the environment makes all this possible? The president of the Insurance Center sums it up by saying, "Mission. Quality. Culture. That's what we're all about. Mission is what we do; quality is how we do it; and culture is how we communicate with each other in order to get it done. These three things are co-equals. If we don't pay attention to one of them, the other two will fall short."

 He backs this statement--variations of which he repeats with some frequency--with action. An actuary by training, he knows the technical aspects of what the company does far better than the majority of top insurance executives worldwide. Without micro-managing, he knows the business, he can read all reports (on the lines and between the lines), and he knows what questions to ask.

 Although new to the idea of a formalized quality process, he immediately embraced the bedrock principles of a CQP process–that the company has hired adults and should treat them as such, and expecting everyone to take part in the continual improvement of the organization only makes good business sense. After all, how can you exclude an adult from having the opportunity to contribute?

 The culture? Suffice it to say that on March 1 of this year, the annual all-employee meeting to present and explain the strategic plan took the form of a musical production with one specially composed song per strategy and a final number called the "Culture Song" ending with all employees on their feet, joyfully taking part. The president of the company was on the stage with the cast, helping to lead the singing. The following week, the company had its biggest week ever--and handled the business in record time. "Mission. Quality. Culture." This is perhaps the best shorthand yet articulated for how business gets done.


About the authors

 Pat Townsend and Joan Gebhardt have written more than 200 articles and six books, including Commit to Quality (John Wiley & Sons, 1986); Quality in Action: 93 Lessons in Leadership, Participation, and Measurement (John Wiley & Sons, 1992); Five-Star Leadership: The Art and Strategy of Creating Leaders at Every Level (John Wiley & Sons, 1997); Recognition, Gratitude & Celebration (Crisp Publications, 1997); How Organizations Learn: Investigate, Identify, Institutionalize (Crisp Publications, 1999); and Quality Is Everybody's Business (CRC Press, 1999). Pat Townsend has recently re-entered the corporate world and is now dealing with "leadership.com" issues as a practitioner as well as an observer, writer and speaker. He is now chief quality officer for UICI, a diverse financial services corporation headquartered in the Dallas area. E-mail the authors at ptownsend@qualitydigest.com .

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