News Digest

Baldrige Award Recognizes
Education and Health Care

Fifty-two applications have been submitted and are currently under review for the 1999 Malcolm Bal- drige National Quality Award. For the first time, 16 health care and nine education organizations join large manufacturers, service companies and small businesses as applicants for the award.

 "This is a congressionally authorized program," says Dr. Louise Liang, president of Group Health Permanente and a judging member of the Baldrige Award Board of Overseers. "So it took congressional action to add categories for not-for-profit education and health care organizations."

 Although those organizations have never been formally recognized by Bal-drige, the award is not completely foreign to them. "Since 1995, there has been a demonstration category for these two sectors," Liang explains.

 Although no awards were available for these trial runs, the process helped train judges and refine the application process and criteria. In the past four years, Baldrige administrators have been working to get the legislative approval and budgetary support to expand.

 One of the most prestigious quality awards in the world, the Baldrige is administered by the National Institute of Standards and Technology. Although Baldrige Awards have never before been presented for the two new categories, numerous state awards are based on the prominent Baldrige criteria. "Those criteria are widely used and essentially constitute a performance management system," says George Ben-son, Baldrige judge and dean of the business college at the University of Georgia.

 Aside from minor language modifications, the criteria for health care and educational organizations are nearly identical to that for applicants from other industries. "The wording changes reflect the belief that students are the customers of education, as patients are the customers of health care," Liang explains.

 "The power of the Baldrige approach is that the criteria are so similar," says judge David Quattrone. "They require organizations to have explicit processes and systems in place for designing programs, evaluating and improving them, and ensuring good communication throughout."

 "The Baldrige focuses on those key elements we feel are necessary to produce the best result," adds Liang. "Other awards focus only on outcomes, while the Baldrige balances the question of 'how did you accomplish the result?' with the result itself."

 Since its 1988 inception, the Baldrige Award has been bestowed upon 35 of the 736 companies that applied. However, the application process can be its own reward. "Applying for the Baldrige Award is a great way for an organization to assess its performance system and marshal improvements guided by feedback from a top-notch set of outside experts," says Kathleen Herald-Marlowe, chair of the Baldrige panel of judges and a qual- ity manager at Exxon Research and Engineering Co.

 The path to a Baldrige Award only begins with the 50-page application. "It's a long process," says Quattrone. "You can't hear about it today, apply tomorrow and win next year. An organization must build itself over time to a point at which it deserves recognition."

 The Baldrige represents the pinnacle of recognition in both health care and education. "Winning this prestigious award is a great honor and confirms that an organization is doing a lot of the right things," says Commerce Secretary William Daley.


Quality Circle Takes a New High-Tech Form

The first Internet-based student quality circle met July 11. Donald L. Dewar, president of QCI International (publisher of Quality Digest), presided over the Web circle named after him. NETsqcc "Don Dewar" links many around the world who are interested in quality.

 The meeting joined students from Mauritius and India, student advisors, NETsqcc "Don Dewar" coordinators and Dewar. Using ICQ software, the meeting afforded the students an opportunity to question Dewar.

 "They began by asking me questions about my quality philosophy and the influence quality has on productivity," says Dewar. Other issues addressed included effective time management, quality and global citizenry, and the need for quality in the ever-changing global scenario.

 P.C. Bihari, the mentor of this unique Internet circle, attended the meeting. Some of the meeting's other participants included the circle leader Manu Anantpadam, Professor Pankaj Asthana, coordinator Dipak Srivastava, Amit Luchem Prasad, Vipin Naugah, V. Lochun, Anuj Agarwal, Abhisek Srivastava, Ashish, Himanshu Sharma, Gyan Prakash, Jaswinder Singh, Shishir Shobhan, Archana Bihari and Sumita Bhadoria.


United States Votes Down ISO 9000:2000 Draft

The U.S. Technical Advisory Group (TAG) responsible for responding to the second committee drafts (CD 2) of ISO 9000:2000 have voted against the section of the standard that contains fundamentals and vocabulary.

 All International Organization for Standardization (ISO) member bodies had until August 1 to accumulate comments, evaluate them and cast a vote according to a schedule established by Technical Committee (TC) 176, the ISO group responsible for ISO 9000 standards.

 "The U.S. position on ISO 9000:2000 is to disapprove the CD 2 document," says Jack West, chairman of the U.S. TAG to TC 176. "Four critical issues were identified. And for each of these issues, a remedy is offered which would allow the United States to change its vote from 'Disapprove' to 'Approve' if the remedy, or something deemed equivalent, was adopted."

 The U.S. TAG recommended that the structure of the document be reshaped to include a more easily accessible alphabetical listing of the definitions of terms contained. Another issue addressed was the complicated nature of Figure 1 in Clause 3.3. The U.S. response conveyed its position that the two definitions of "quality" in the standard are confusing and inconsistent. Finally, the group disapproved of the word "object" within the definitions and suggested it be substituted with "product or process."

 While the U.S. TAG voted to approve ISO 9001:2000 and 9004:2000, included with the vote were a number of criticisms and suggested changes. The 17th meeting of TC 176 will take place during the second and third weeks of September. The 10-day conference will be held in San Francisco and will address concerns made by all ISO member bodies.


NQI Partners with SGS

The National Quality Institute (NQI) announced on August 18 that it has signed a multi-year agreement with SGS International Certification Services Canada Inc., giving the registrar the right to market NQI training courses and assessment programs throughout Canada. NQI administers and grants the Canada Awards for Excellence and also runs Canada's National Quality Management System Auditor Certification Program. NQI and SGS ICS Canada will provide organization excellence training and assessment service to Canadian organizations using the long-established assessment process developed to adjudicate the Canada Awards for Excellence.

 SGS ICS Canada is the Canadian arm of SGS International Certification Services, one of the world's largest independent quality system registrars. It was recently included in Quality Digest's 1999 ISO 9000 Registrar Customer Satisfaction Survey. The results of that survey showed the combined results of SGS ICS Canada and SGS ICS United States.


FAA Seeks Control of Soaring Flight Delays

The airline industry has consistently performed below average in cus-tomer satisfaction surveys since the American Customer Service Index (ASCI) was created in 1994. The 1999 rating of 70.3 out of 100 for airlines was well below the score for virtually all other service industries, including hotels, hospitals, motion pictures, electric service, telephone service and postal service. However, it now seems air carriers will get a helping hand from a government agency in their battle to reduce the decline in customer satis-faction.

 The Federal Aviation Administration (FAA) has modified some of its procedures in response to complaints from airline officials about the increasing problem of flight delays. Delayed flights in 1999 have already outnumbered those from all of 1998.

 The bulk of the blame for delayed flights lies with the FAA and its antiquated air-traffic control system, claimed Donald Carty, president of American Airlines, in a recent speech to the National Press Club. The FAA has been quick to respond to the complaints. Jane Garvey, the FAA administrator, met with Carty and other airline executives on several occasions in early August. Garvey characterized the issue as "critical" in a letter to the airlines.

 The FAA's charge is two-fold. "Our responsibility is to run an air traffic service that is both safe and efficient," says Mitch Barker, an FAA public affairs specialist. "Those have always been our twin responsibilities."

 While safety is primary at the FAA, many industry insiders applaud the administration for its quick action. "Safety cannot, should not and will not be compromised, but there are things we can do to improve the system," Garvey wrote in her address to airline officials.

 The FAA defines a delayed flight as one that takes off more than 15 minutes after the pilot indicates to the air-traffic control tower that he or she is ready to do so. And though administration officials blame weather for as many as 75 percent of delayed flights, they have agreed to modify the way they address this and other factors.

 "After meeting with air carrier officials, we have put a few short-term measures in place to decrease delays," explains Barker. First, the FAA has centralized the process of making decisions such as how to reroute flights in cases of poor weather. Also, new equipment, which has been blamed for a portion of this year's delays, will now be implemented at nonpeak times.

 In addition to these process changes, the FAA has committed to reexamining a few of its policies. The use of ground stops, which can strand planes waiting for improved weather, will be reevaluated. Furthermore, some restrictions on the spacing between flights (called "miles in trail") will be limited. "We expect to see the results [of these changes] in a matter of a few weeks," Barker says.


Y2K Failures Make an Early Appearance

Fewer than half (48%) of America's largest companies expect all of their critical systems to be prepared for possible computer system mayhem January 1, 2000, according to a new survey.

 The survey, conducted by Cap Gemini America Inc., is one of the longest-running polls used to systematically monitor Year 2000 preparedness. Its findings were produced from responses by information technology directors and managers of 144 major U.S. corporations in all major industries and 17 government agencies.

 Nearly one in five companies (18%) expects that fewer than three quarters of their systems will be fully tested and compliant by that date. But the survey also found that 75 percent of respondents have already had a Year-2000-related failure. Of those failures, 92 percent involved "financial miscalculation or loss," followed by 84 percent involving "process disruptions," and 38 percent "logistics or supply chain problems." Virtually every respondent (99%) anticipates "an increase in systems failures into the remainder of 1999 and beyond."

 The Cap Gemini survey also revealed a shift in how companies view the Y2K issue. In the past months, even years in some cases, scores of companies have assembled crisis-management centers to help mitigate the effects, and decrease the number, of system failures. The number of top managers planning to take charge of those tools has risen from 62 percent in May to 84 percent as of this survey -- a clear indication that executives consider this issue more critical as the new year approaches.

 In addition to taking charge of crisis command posts, management is allowing the possibility of Year 2000 problems to influence business decisions. According to the survey, the number of major corpora-tions likely to sever their ties with non-Y2K-compliant companies rose from 87 percent to 92 percent in the last quarter.

 A growing proportion of corporate America views Year 2000 readiness as a competitive advantage. The percentage of firms likely to incorporate Y2K-compliance into their marketing messages has increased from 65 percent to 89 percent since December 1998.


Customer Satisfaction Rating Slumps

Although the nightly news tells us that the economy is strong and that Americans are buying cars, electronics and various commodities at record levels, other evidence suggests that consumers are less satisfied with those goods than they once were.

 The American Customer Satisfaction Index (ACSI) has fallen this quarter from 72.6 (of a possible 100) to 72. The ACSI is the product of an annual survey of 175 companies and govern- mental agencies. The index is updated quarterly when se-lected industry ratings are updated. This quarter's review of customer satisfaction with durable goods manufacturers saw a slight increase (+1.4%) in the "Personal Computers" category, but a drop in both "Household Appliances" (-1.2%) and "Automobiles" (-1.3%).

 The release of the new ACSI may also lend evidence of the link between customer satisfaction and the bottom line. Computer manufacturer Dell, for example, saw its ACSI rating increase 2.7 percent in the past year, while its stock nearly doubled in value during the same period. Conversely, Compaq Computer Corp., whose ACSI score has fallen 1.4 percent since 1998, also saw a decrease in its stock value.

 Some analysts blame the ACSI skid on America's cost-cutting drive. Although this strategy brings boosted earnings for many companies, it may ultimately undermine profits by sacrificing customer relation- ships, says Claes Fornell, director of the National Quality Research Center (NQRC) at the University of Michigan. ACSI, the country's only uniform cross-industry indicator of satisfaction, is produced through a partnership of the NQRC, the American Society for Quality and Arthur Anderson consultants.

 "If you cut too much on the cost side, customer satisfaction goes down," says Fornell. This could mean trouble for the economy as a whole in years to come, he contends.


Company Loyalty: Rest In Peace

Company loyalty is indeed dead. However, downsizings and layoffs aren't the fall guys, according to Across the Board, the Conference Board magazine.

 "The predisposition to loyalty has vanished from the American workforce as a result of a sweeping change in American social character," claims author John Clancy, professor and assistant director of American Culture Studies at Washington University in St. Louis.

 "It is commonly supposed that loyalty disappeared when companies began downsizing -- breaking some social contract -- but this assumption is wrong," adds Clancy. "Any reading of public opinion polls and other research of the last thirty-odd years clearly demonstrates that American social character has shifted dramatically. From a society that had great confidence in its institutional leadership, that had a high degree of mutual trust and a sense of social solidarity, that found company loyalty as natural as rainfall -- from that we have become a nearly atomistic nation, wary of all our institutions… and content for the most part to retreat into private life."

 More disheartening still is Clancy's assertion that attempts to rediscover company loyalty are probably futile -- The predisposition no longer exists. Moreover, its loss will be costly for American businesses. "Loyalty is a powerful simplifier," he says. "In making decisions, loyal employees need not consult the entire range of human values; they just do what is right for the company." Loyal managers who have earned the company's trust are far more likely to take risks than those who are only passing through. If managers who are secure see potential for company gains, they will risk time and resources. In contrast, managers who think only of their careers -- most likely outside their current employers -- are highly unlikely to take such risks. Nonloyal employees are only interested in enhancing their resumes.

 Despite loyalty's benefits, most corporations are sending a clear, if tacit, signal that investments in loyalty are no longer warranted. More and more, companies seek only an instrumental relationship with their employees and shy away from creating long-lasting bonds. "We see this in the virtual disappearance of the informal employment contract that promised lifetime employment for good service," notes Clancy. "We see it in the increased use of outsourcing, often a cost-effective move but hardly designed to build loyalty and trust among employees."



Internet Recruitment

In an effort to use the convenience of the Internet for the recruitment business, American Recruitment Companies has launched a new Internet network named It offers 25 occupation-specific Web sites with a proprietary profile matching system that allows candidates to locate job listings they best fit.


Fischer Technology

The newly designed Fischer Web site is set up for easy navigation. It contains information about the company and its broad range of coating thickness measurement and materials testing instruments. The site's content is grouped into categories including products, services, company news, technical articles, applications and contact information.


Web's Best Health Information

Mayo Clinic HealthQuest Online has received recognition just three months after its birth. The Health Information Research Center awarded HealthQuest Online a Gold Award for excellence. The site offers a unique service to businesses and member organizations to help their employee wellness programs succeed. HealthQuest Online helps viewers take a proactive approach toward their health through behavioral change, health-risk assessment and healthy lifestyle planning.


Millennium Readiness

Talent Alliance has added a new industry-specific section to its site, which includes a series of articles exploring industries that are best positioned for the new millennium. Other posted articles explore recent workplace statistics on hot job fields including financial services, electronics, industrial equipment, management consulting and computer technology.

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