CHAPTER 2
Continual Improvement and Competitive Edge
To keep doing the same thing and expect different results is ‘Professional Insanity’
– Stephen R. Covey
SYNOPSIS
Today, quality is not just an activity related to products and services offered by an institution/organisation. It has relevance to the very survival, growth, and prosperity of the institution/organisation. Hence, a clear and deeper understanding of quality in the context of the society as well as business environment has to be considered. In addition to this, one has to understand the meaning of competitive edge and the role of quality as a strategy to avoid certain types of crisis faced today even by well-managed institutions/organisations. These are dealt within this chapter along with their linkage to continual improvement.
Context of quality
Over the years, expectations and demands of an ordinary man have risen. Various institutions/ organisations of the society, no matter where they operate, have to fashion their vision, strategy, action plan and activities to meet the needs of the society. This is referred to as the context of quality in the society. Every institution/organisation has to operate in accordance with this context in order to be relevant to the society. The term context here refers to the expectations of the society. This context has to be understood and responded by every institution/organisation to survive, grow and prosper in the days to come.
Expectations of the society
Expectations of the society have grown in multi-dimensions. These expectations have to be met quickly and simultaneously. They can be described as achieving total freedom through
- Economic freedom to assure food, shelter, clothing, health and education to live with dignity, both physically and emotionally.
- Protection freedom to live safely even in the event of natural disasters such as drought, famine, flood, earthquake, tsunami and outbreak of diseases.
- Transparent freedom to achieve transparent, speedy, fair and responsive administrative machinery.
- Enabling freedom to take part in nation-building activities.
These are meant to improve the ‘quality of life’ of the ‘have-nots’. The logic is that once the position of people improves, the whole societal set-up changes for the better; otherwise the society continues its dichotomy of haves and have-nots, an undesirable co-existence of prosperity and penury.
Competitive edge
An institution/organisation that is perceived by the society as a change-agent would possess competence, capability and capacity to handle
- Consumer-triggered crisis wherein customers desert the institution/organisation and shift to other institutions/organisations.
- Crisis of cost escalation wherein an institution/organisation cannot match with the price reduction offered by its competitors.
- Crisis of competition wherein different features like superior technology, better services/facilities to customer and new ways of handling business rock the market.
- Crisis of consumerism wherein groups and opinion makers pick up quality-related issues, unfair trade practices causing expensive embarrassments. Unexpected is the word that characterises the manifestation of this threat. It may be in unexpected forms, ways, time, place and people leading.
- Society-induced crisis wherein new laws, rules, regulations and mandatory requirements are enacted. These can also throw enterprises out of business.
An institution/organisation which can survive these crises is said to be competitive.
Constituents of competitive edge
Competitive edge constitutes a number of elements. For example, for a manufacturing organisation, the various points listed in Table 2.1 constitute the competitive edge.
All the points listed in Table 2.1 may not be important at any given point of time. Hence, it is only necessary to find the ones appropriate at a time and act upon them. However, there are certain core things that help to be competitive always. They include
- Least cost
- Least price
- Zero defect
- Zero inventory
- Least batch size
- Zero set-up time
- Zero down time
Competitive edge—differentiations and distinctiveness
Achieving competitive edge is the result of a number of micro-features each impacting their own unique differentiations and distinctiveness. This thought is expressed in the words of Tom Peters—‘Excellent firms do not believe in excellence—only in constant improvement and constant change’. Few illustrations as under explain the point.
TABLE 2.1 Constituents of Competitive Edge: Manufacturing Institution/Organisation
(Illustrative and not Exhaustive)
| No. | Promoters of competitive edge |
|---|---|
| 1 | Understanding completely, clearly and unambiguously the requirements of the customer |
| 2 | Ever eager to know the emerging needs/requirements of the customer—mandatory and statutory—and be in a state of readiness to meet them |
| 3 | Eager to fix a problem of the customer that the company can handle |
| 4 | Error-rate nil or close to it in all the dealings with the customer. Delay is also treated as an error |
| 5 | On-time delivery is 100%. This also implies committed quantity |
| 6 | Attending to service calls or complaints within hours |
| 7 | Resolving the issues within the time mutually agreed to or stipulated by the customer |
| 8 | Fast handling of irritated customers in two steps: by apologising for the irritation and providing immediate relief to the irritation |
| 9 | Keen to sponsor or participate in joint exercises of problem solving, product development, etc. |
| 10 | Ever alert to note and watch the perception the customer has on the company |
| 11 | Technology upgrading or replacement, both in time |
| 12 | Consistency as far as business ethics is concerned; on the other issues, flexibility in approach to get the customer |
| 13 | Focus on retention of customers |
| 14 |
Internal thrust to
|
| 15 | Be ready to face the price war |
| 16 | Field returns are either nil or can be captured only as ppm |
| 17 | Freight cost incidence of expensive route should be far and few |
| 18 | Packing cost—optimum to ensure integrity and safety of the product till destination |
| 19 | Response time to enquiry/quotation/clarification/sample should be within hours |
| 20 | Disputes arising out of orders executed should be nil or ppm |
| 21 | Getting customers’ support/help in solving problems should be an easy matter |
| 22 | New customers from the referrals of existing customers should be plenty |
| 23 | Volume of business with a customer should be on the increasing path |
| 24 | Leveraging superior process capability to develop business |
| 25 | Meeting customers often, seek how to be of use to customers |
| 26 | Be available to the customer, when he needs, always |
| 27 | Fixing problems, resolving complaints (100%) within the time frame specified |
| 28 | Solution to specific problems—100% within the time frame |
| 29 | No billing errors and shipment errors |
| 30 | Ability to modify/change at short notice, most of the time |
| 31 | Readiness to meet special needs, most of the time |
| 32 | Response timeliness—quick and prompt always |
| 33 | Returning calls—quick and prompt always |
Over the years, hundreds of literary persons have re-written the stories of Ramayana and Mahabaratha. But only the versions of Late Shri. C. Rajagopalachari have witnessed several editions. The reasons are many, but each contributing to the ‘UDD’, i.e., uniqueness, differentiation and distinctiveness which ensure that the work of C. Rajagopalachari stands apart from the rest. Differentiation and distinctiveness are differences which are not notional but can be seen, felt, enjoyed and experienced by customers.
Many eminent actors and actresses who once held the centre stage and were the cynosure of the society are now forgotten, as their UDD features have faded away. But Amitabh Bachchan still rules because the UDD of his roles are still relevant to the varying needs and moods of the society. Similar is the phenomenon governing the sports personalities—reigning and adding new micro-features to their stamina, style, technique, method and tactics.
In Bangalore, there are innumerable hotels that serve ravaidli, a South Indian delicacy. But people make a beeline to a small restaurant located in close proximity to the famous garden Lal Bagh. The reason is the same UDD mantra. The very look, structure, shape, aroma, way of presentation and serving all contribute to the UDD.
Many institutions/organisations of diverse types—social, economical, educational and industrial—which were once neighbour’s envy now stand as museum pieces reflecting the lost glorious days. It is due to their inability to renew, reinforce and create new UDD to stay fit in society serving the onslaught of competition.
The UDD phenomenon is another name for competitive edge. Therefore, continual improvement is the means through which an institution/organisation keeps its competitive edge ever relevant and sharp to survive, grow and prosper. It is for this reason that continual improvement has been recognised as a foundation principle of total quality management and a key-result area of every institution/organisation.
Subsequent chapters deal with the issues related to continual improvement:
- delight customers with speed and quality,
- improve process,
- work together for maximum gain,
- base decisions on data and facts.
Continual improvement—a larger perspective
An institution/organisation is a community by itself. Therefore, an institution/organisation for its own good has to create opportunities for its employees to empower themselves to acquire leadership qualities—initiative, drive, commitment, looking beyond the tip of one’s nose, empathy, sharing, caring, teamwork, ready to learn always, etc.
Continual improvement when practiced by an institution/organisation on regular basis in every functional area provides hands-on opportunities for its employees to become team-oriented and acquire leadership qualities. This in turn enhances the worth and value of the entire institution/organisation. Continual improvement gets transformed from the ‘control’ mode to the ‘empowerment’ mode as depicted in Table 2.2. This empowerment mode attained by an institution/organisation is of much wider and greater significance to the society.
Thus, it can be seen that continual inprovement process in its empowerment mode transforms itself as an enabling force for people to be resilient and flexible to welcome change, adopt to change, seek change and cause change; in short become agents of change. This is how an organisation/institution for its survival, growth and prosperity has to operate in the present as well as the future environment, where change is the only constant and change like tsunami can also turn out to be a veritable force of havoc and mutation beyond recognition when an institution/organisation is not adapted to handling change.
TABLE 2.2 Control Mode and Empowerment Mode
Transformation |
||
|---|---|---|
| Issue | Control mode | Empowerment mode |
| Management | Control things and people | Control things and liberate people |
| Structure | Hierarchical Bureaucratic Top–down |
Flat Boundary less Flexible |
| Motivation | No inspiration Carrot and stick |
Inspirational Total person |
| Appraisal | Secretive Dictatorial |
Open Participative Self-appraisal Peer appraisal |
| Communication | One-sided (downward) |
Open (up-down–side) |
| Training and development | Not important, if given a choice | Committed |
| Outlook | People are an expense | People are an asset |
Conclusion
Continual improvement is an activity practiced in every functional area. It has an external focus—customer, competitive edge, sensitiveness to product/service differentiations and distinctiveness. It should also be meaningful to individual employees as a means of changing their sense of self-worth, self-esteem and sense of pride in what they do. Continual improvement process is the means to keep an institution/organisation fit to ably handle change.