For Florida Power and Light Afterthe Deming Prize: The "Music"Builds ... And Builds ... AndBuildsFlorida Power & Light pursued the Deming Prize primarily because it wanted toaccelerate the quality improvement process, wanted to emphasize even more toits employees the importance of customer satisfaction, and wanted to involveeven more employees in the quality improvement process.

AI Henderson and Target Staff

T his past November, FloridaPower & Light Company (FPL)became the first company outsideJa~an to win the coveted DemingPrize, which recognizes outstand-ing achievement for quality-controlmanagement.

The Deming Prize was createdin 1951 to honor American qualitypioneer W. Edwards Deming andthe businesses that exercise hismanagement concepts. The prizewas opened to overseas compa-nies in 1985. However, no foreigncompany challenged the Japanesedomination of the award until Flori-da Power & Light, one of the larg-est and the fastest-growing utility inthe United States, applied in 1989.

In challenging for the Deming,Florida Power & Light faced a stag-gering array of criteria to be met.The company's application covered1000 pages of documentation inten bound booklets. When theDeming examiners flew in from Ja-pan in the summer of 1989, theywere free to question any worker.Employees had to be able to sup-ply the data to support their an-swers - preferably within a fewminutes.

Despite a dedication to qualityimprovement throughout the 1980s,FPL found that it had to concen-trate on overcoming weaknessesthat it perceived it had in compari-son with the standards of DemingPrize examinations. Those gUidingFPL into the examination process

10

worked long hours for months. Fig.1 illustrates the intensity of prepa-ration for the exam.

FPL's quest for quality bears astriking resemblance to MauriceRavel's "Bolero." First performedin Paris in 1928, this hauntingly fa-miliar musical piece consists of onetheme, in C major, almost through-out, in an unvarying rhythm andwith a gradual crescendo.

FPL's theme is written in TotalQuality Control, or QIP (Quality Im-provement Process) with an un-varying rhythm: customer satisfac-tion. Unlike Bolero, however, thecrescendo is a continuing processwithout end.

The process through whichMaurice Ravel created Bolero andFPL's quality improvement processare strikingly similar. Ravel is quot-ed to have said:

"In my own composition Ijudge a long period of gesta-tion necessary. During this in-terval I come progressively,and with a growing precision,to see the form of evolutionthat the final work will take inits totality. Thus I can be occu-pied for several years withoutwriting a single note of work.after which the compositiongoes relatively quickly. Butone must spend time in elimi-nating all that could be regard-ed as superfluous in order torealize as completely as possi-ble the definitive clarity somuch desired.'

FPL went through a similargestation in which they progres-sively, and with growing precision,created their QIP. Even after win-ning the Deming Prize, the processcontinues to evolve. Much of FPL'seffort now centers on streamliningtheir quality process.

Why was a utility the firstAmerican company to apply? Morespecifically, why Florida Power &Light? And what lessons, if any,are there to be learned from thisone company's pioneering experi-ences? To answer these questions,we need to first examine the socialand economic climate of the 70s.

The late 1970s produced fed-eral legislation to encourage com-petition in the electric power indus-try. At the same time, customerswere becoming much more dis-cerning. The climate produced co-generators, independent powerproducers, numerous small powerproducers, and others with the ca-pacity to sell to utility customers. Inthe wake of the Three Mile Islandnuclear plant disaster in 1979, utili-ties around the country foundthemselves battered by long con-struction and licensing delays. Utili·ties were faced with a whole newball game.

FPL has a unique challenge asa utility, but it long since stoppedusing its situation as an excuse forpoor performance. Florida hasmore lightning strikes than any oth-er state. FPL has the highest per-

Target

Florida Power & Light's Preparaton Was ThoroughExamination Milestones

Open practice time

July

AwardAward ceremony

notification

ExaminationWeek 1 Week27/24·28 1l/14-HI

June

Open practice time

6/10/89Chiefexamrnermeeting

Open practice time

DQIP'saccepted

4/22/89Examinerorientation

April

J. J. Hudibergannounceschallenge

DQIP's sub-mitted 1/20/89

Applicationsubmitted12/20/88

Preparation ScheduleMarch

O"going Level II and III management reviews

Schedule A

Schedule B

Rehear;;(11 14/ 1 1-14

5/5-8 Rehearsal 2Hehearsal 3 Rehearsal 45/11-17 6/13-15 6/70-24

•Measurlng up to the Deming Prize required determination and persistence at FPL The primarychallenge was to enhance quality practices wherever it was seen that they fell short of thestandards that it was believed the Deming Prize demanded. There was no hope of covering poorpractice with excellent presentation, and besides, the whole purpose of the experience was tobring FPL's actual performance to a higher level.

Readiness to answer questions with data during a tightly packed site examination schedule re-quired extensive preparation and rehearsal. FPL executives acted in examiner roles during rehears-als to try to uncover oversites either in substantive performance, or in ability to explain performance.(Excerpted from "The Deming Prize Examination Process," FlOrida Power and Light internal document, 1989.)

Fig. 1.

Florida Power & Light's Quality Improvement Process (QIP)

Policy Deployment (Introduced in 1985)The cornerstone of FPL's management system, Policy Deployment is a process to translatethe corporate vision into specific, coordinated action plans in every part of the company. Bythis system. top management "tosses objectives out," and operating personnel "toss im-provement plans back," finally arriving each year at an overall improvement process that:

• Concentrates on achieving customer satisfaction• Develops consistent policies, targets, and plans• Strengthens the review of implementation actions.

Principles of QIP FPL Management System:

1. Customer satisfaction 1. Focus on customer needs

2. Management by fact ~ 2. Management reviews ofDeploy- improvement activities3. Plan-Do-Check-Act ment(Deming Wheel)

J~~D~3. Cross-functional

4. Respect for peoplemanagement

4. Integration of policy develop-

,¥ "'-ment and budget

Quality Improvement Quality in Daily WorkTeamS(1981) (Began in 1986)

• Consists of functional teams, task • Focuses on supervisors' and manag-(mUlti-functional) teams, and lead ers' key accountabilitiesteams of managers • Focuses on customers' needs

• Supervisors support the teams • Develops control systems for top• Computer registration and monitoring priority jobs

of team activity • Provides the means to standardize,• Use a common 01 story format to solve replicate, and improve daily

problems operations

• Use project planning worksheets for • Identifies areas for developingplanning and scheduling projects computer systems to relieve line

• Have a strong program to recognize employees of many repetitive tasks-team activities and accomplishments. and improve service to customers

Fig. 2.

Summer 1990 11

Brief Overview of the Evolution of Florida Power & Light'sQuality Improvement Process

198~ 1986 1987 "" 1989YEAR PREPARATION INTRODUCTION DEVELOPMENT INTEGRATION INTENSIRCATION-INTRODUCE -IDENllFY MAJOR -EMPHASIZE NPRQVEMENT -INTEGRATECQMPANY • FURTHER IMPLEMENT

AND PROMOTE alP PROOlEMS ACTlVlTlESON M4JOA FUNCTIONS THE O..tl SYSTEM

• CONSERVE CAPITAL _DEVelOP ANPROBLEMS -QUANITFY "BEST • IMPROVE COST AND

AND REDUCE THE INTEGRATED SUPP!.Y · IMPROVE REUABIUTY MANAGED" VISION SAFETY MAN4GEMENTINCREASE IN MANAGEMENT Of' ELECTIlIC SERVICE s,"",,"OBJECT1VESOPERATING STRATEGY - IMPROVE NUCLEAR

• REDUCE NUMBER Of

EXPENDITURE PLANT AVAt.ABIUTY CUSTOMER COMPlAINTS • IN'mOOUCE CORPORATE-REDUCE NRC • IMPROVE FOSSIL RESPON$IBlUTYSYSTEM

VIOLATIONS PLANT FORCEDOUTAGe RATE

• IMPftOVE EMPLOYEESAFETY

• DEVELOPED VISION • ESTABUSHED POLlCIES AND TARGETS TO ACHIEVE • FC!RAAUZED CROSS- • INTl'IOOUCED CORPORATECUSTOMER SATISFACTION "",nONAl. RESPCWSI8IUTY SYSTEM

POLICY MANAGEMENTDEPLOYMENT • eSTABUSHED POUCY _INITIATED PRESlOENTlAL .ESTAElUSl-EO CORPORATE -5ffiENGlHENEO REVIEWS OF IMPLEMENTATION

DEPLOYMENT .",ews SYSTEM OF NDlCAT0F8 ACTIVITIESCOMMITTEE.. QUALITY IN'" - PROMOTED OIOW _DEVeLOPED co.ITROL _DEPLOYED EXTERNAl. _ ACCELERATeD CONTROl.0 DAILY! ACTIVITIES SYSTEMS FOR MANAGERS' CUSTOMER NEEOS ACTIVITIESlil REPETITIVE WORK TOP PRlORnY JOBS USING OOAl..ITY SYSTEM!;; "'TA~

(JQUALITY - INITIATED TEAM - ReQUIRED use OF 01 -EMPHASIZED SUPERVISOR - EMPHASIZED VOlUNTARV - seNT TEAMS TO OUTSIDE.. ACTIVITIES STORY AS FACILITATOR PARTICIPATION CONFERENCES.. IMPROVEMENT

UlTEAMS DEVELOPED SUPl'ORT

_N1'lATED NEW EMPLOYEE SUGGESTION PfIOGRAM

ill ROLES Of SUPERVISOR ,!:: EDUCATION _ DEVELOPED BASIC OIP _ MOMOTED USE OF _DEVELOPED APPLICATION _IMPLEMENTED SPECIFIC sac COURSE FORZ AND COURSES SEV£N BASIC TOOl.8 EXPERT COURSE hlANAGERS AND SUPE,RS0!;i TRAININGI-

ili QUALITY! _INITIATED CUSTOMER _ REVISED PROCEDURES _INI1lAT£O CUSTOMER -IMPLEMENTED SALES PROGRAMS AIMED AT

" DEUVERYNEEOS SURVEY FDA EMERGENCV SATISFACTION SURVEY CUST~ER NEEDS

W RESTORATION OF ,~ SYSTEM SERVICE _IMPftOVED INSULATION STANDARDS FOR TRANSMISSION0-il! UNES

I'" _IMPROVED SURGE PROTECTION0~.. COST _ DEVELOPED STRATEGV _ ESTABUSHED AND IMPLEMENTED RAMP PROGRAM _CONSOlIDATED D!STRlCT OFFICE OPERATIONS FOR" MANAGEMENT FOR REDUCING RESERVE FOR FOSSIL POWER PlANTS MORE EFFECTIVE UTILIZATION OF RESOURCESMARGIN

SYSTEM

SAFETY _ EVALUATED EMPLOVEE _IMPROVeDTHE _IMPROVED NUCLEAR PLANT OPERATIONS TOMANAGEMENT SAFETY COMPARISON ACCURACV AND REDUCE AUTOMATIC TRlPSSTANDARDS PRECISION OFSYSTEM PEASCNolEL RADIATION _IMPLEMENTED 'STOP' PROGRAM IN THE DIVISIONS

EXPOSURE

_ BEGAN TO FOCUS _CLARIFIED _BEGAN TO SHOW _REDUCED CUSTOMER _ IMPROVED CUSTOMER

EFFECTS ON COMPANV PROBLEMS lIIlOEASTANOING OF_ON

COMPLAINTS SATISFACTIONMAJOR PAOBLEMS MAJOR PROBLEMS

REMAINING_ COMPANY PROBLEMS _MAJOR PAOBLEMS -CUSTOMER COMPlAINTS _NEED TO CONCENTRATE _ CONSOUDATlON OF

AND OBJECTIVES WERE DID NOT SHOW WERE HIGHER THAN ONCUSTOMEA GAINSPROBLEMS NQTClEAR IMPROVEMENT COMPARABLE COMPANIES SATISFACTION _ ClARlRCATION OF NEW

IMPROVEMENTOPPOATlNITIES

FIg. 3. From p. 26 of "Summary Description of FPL's Quality Improvement Program, "publication ofFlorida Power & Light Co., 1989.

centage of residential customers inthe United States. Over 53 percentof the heads of household areabove 55 years of age. FPL experi-ences the highest level of customerturnover of any utility in the coun-try. Sustained peak loads are in thesummer months, but FPL experi-ences sudden sharp spikes duringcold snaps in winter. Its customershave one of the largest per capitaconsumptions of electricity in thecountry. The circumstances pre-scribe that FPL must have an out-standing approach to customerservice.

12

To cope, FPL started QualityTeams in 1981, and from 1983 hassteadily added pieces to its mag-num opus, the Quality ImprovementProcess. (See Fig. 2.) By 1988 thecompany had gained a reputationas one of America'S best in quality,but CEO John Hudiberg and othersin top management knew that FPLhad to become still better. They fig-ured that applying for the DemingPrize would cure them of any mis-placed complacency.

Prior to challenging for theDeming Prize, FPL had a long peri-od of preparation for a quality cul-ture. Like most companies, until

about 1986, there was a basicmanagement process by whichbusiness was conducted, with aQuality Improvement Process onthe side. Then FPL began to be-come serious about changing itsentire corporate culture.

Through 1987, the quality im-provement road at Florida Powerand Light was bumpy. As can beseen in the bottom "RemainingProblems" row in Fig. 3 and in Fig.4, some of FPL's major difficultiesfailed to budge. The Deming PrizeProcess was a key factor in actual-ly deploying throughout FPL many

Target

quality practices that had beenbuilding for five years. The DemingPrize Process created an artificialcrisis that stimulated a corporatechange that has now become near-ly irreversible.

As FPL moved into the chal-lenge, peer pressure to excelspread through the company. Nodivision, no department wanted tobe the culprit which caused FPL asa whole to endure a continuance-and another year o,f the DemingPrize Process. (See box copy.) Thiscrisis stimulated the extra energynecessary to go through a painfUlmetamorphosis - from employingmany quality practices to the Quali-ty Improvement Process (QIP) be-ing the way the company functions.

It's the practice of QIP in everypart of a company that makes thedifference. Over the years, FPL hadformed an exchange relationshipwith Kansai Electric Power Compa-ny of Japan, which won the DemingPrize in 1984. From Kansai, FPLlearned how Kansai had imple-mented TQC (Total Quality Control)and of their experience with theDeming examination, but mostimportant, they learned they hadto transform themselves - tochange the way everyone at FPLreasoned and behaved every day.

FPL is aware that many oppor-tunities for improvement remain,but now most employees havemuch more confidence that FPLcan control its environment, ratherthan be controlled by it. Theylearned to focus on long-term solu-tions and concentrate only on ac-tivities that contribute to customersatisfaction.

Concentrating on PrioritiesEvery year as FPL goes

through its Policy Deployment, itspractice of quality improvement re-fines. When Policy Deployment be-gan in 1985, the company discov-ered a better way to follow up andassure that corporate (and custom-er satisfaction) objectives were be-ing pursued. However, the compa-ny "chased too many rabbits, andcould actually catch very few."

As QIP matured, FPL people atall levels learned to concentrate re-sources on the top Pareto items,

Summer 1990

and top Pareto items came frommeasuring phenomena that make adifference in customer satisfaction.In practice, not only do peopleneed to doggedly pursue the prob-lems that make a difference, theymust free their time from activitiesthat have an insignificant impact oncustomer satisfaction. FPL employ-ees had to learn, for instance, thatspending time working on a noisywater cooler might relieve an an-noyance, but time is better spentelsewhere because water coolernoise shows up nowhere in analy-ses of power outages or other mat-ters important to customer service.

At headquarters, FPL's execu-tive committee is guided by an an-nual customer survey. Priorities forattention also come from executivevisits to all operating units andfrom the annual problem identifica-tion process conducted by eachunit itself, all of which is done withantennae up for customers, internalas well as external.

After all the goal setting, whatdoes FPL concentrate on? Custom-er satisfaction as shown by com-plaints to the public service com-mission, a high rate of serviceavailability, and adequate capacityfor present and future needs. Highon-line capability of nuclear plantsis coupled with premier nuclearsafety. Another overall objective iskeeping cost increases below theConsumer Price Index. That can beachieved through excellent qualityperformance and safety for bothemployees and communities. Effortconcentrates on work that contrib-utes to these goals, and progressis traced by key indicators. Actionsthat improve the forced outage ofpower plants are very high in priori-ty, for example, because they con-tribute to several primary FPL ob-jectives at once.

Concentrating on prioritiesseems easier than it really is. Entermanagement by fact. Resist sec-ond-guessing the facts or ignoringthem. Inevitably someone will sug-gest that because grass alongpower lines is infrequently cut,transmission maintenance must begoing to pot. On the other hand, byremoving factors that once allowedlightning to be the number one

cause of transmission outage, FPLhas reduced lightning to the num-ber four cause of outages.

Likewise, if work concentratestoo long on one priority and is sosuccessful that improvements arewell beyond target, resources areagain not used wisely. Other con-cerns have moved up to the top ofthe Pareto chart, but it is temptingto keep working, for instance, onboiler feed pumps if one has al-ready had success there.

The Martin Plant: An Example ofFocusing on Priorities

The Martin Power Plant is oneof 11 fossil plants owned by FPL,which also owns and operates twonuclear plants, thus co-owning aplant with the Jacksonville ElectricAuthority. An example of decreas-ing the forced outage rate is theprocess at Martin Plant's Unit #1,the first of two 783 megawatt gene-rating units at the plant. Until 1986,Unit #1 had a poor history of out-ages although it was only fiveyears old. Improving reliability ofthis unit became a high priority,and it served as an example duringthe Deming site examination.

The first step was summarizingthe accepted causes of all the out-ages of Unit #1 from 1983 to 1986,during which time the outage ratezoomed from five percent to 66percent. Causes of failure wereseparated into recurring and first-time causes. A Pareto of the 1987failures showed that failure of a su-perheater end cap was by far thetop item.

Analysis of the end cap re-vealed that the root cause was anincorrect A.S.M.E. marking on theend cap. Countermeasures includ-ed not only replacement of the endcap, but testing of similar boilercomponents to be sure they weremade of the right material. Thisfinding from Unit #1 was communi-cated throughout FPL so that thesame fix could be applied to all oth-er equipment of the same type.

During 1988, the analysis of oth-er causes of outage continued, butthree enhancements to FPL's sys-tems added firepower to the hunt.First, FPL and industry data wereanalyzed to discover modes of fail-

~

13

Some of Florida Power & Light's Accomplishments

LOST-TIME INJURIES PER 100 EMPLOYEES

1.5,.-------T-A-R-:-G-ET-_"6-------,

o L..,-----r--,--~--,-----~-~-..J

NUMBER OF EMPLOYEE SUGGESTIONS SUBMITTED

86 87 86 89

~ 25.038

MQRETHANIN / / 12/89

THE PREVIOUS60 YEARS OFTHE PROGRAM

NEWSUGGESTION

PROGRAMSTARTED

(BRIGHT IDEAS)________-----J~

IGOOD DI

83 B4 85

25,000

20,000

IL rnOtj 15,000a: -w I-

10,000III rn::;;~::::> ClZ::::> 3000

rn2000

1000

laooD UI

,/'" 0.39

LOWEST IN n.tE 12/89HISTORY OF THE COMPANY

!IIWW

9Q, 1:IEw8iiiw~0.5:;'"..3!:

83 84 85 86 87 88 89 90 91 92

COMPLAINTS TO FPSC DISTRIBUTION SERVICE UNAVAILABILITY1

TARGET-/':, 80 TARGET - {\.0l/l

W \IGOOD li I > !GOOD UIa: ffi 70W:IE mm0 wmI- I-a:l/l :::lW 60:::l z:;:U -00 :;:1-0 a: m 500:!::.O.5 W:::l:;:Ul/l 00I- 47.2z lii ~ 40~ :::la.

12/89U:::l

Q, a::IE a: 300 " /':, WU 0.23 I-z

12/89 - 00 , 83 84 85 86 87 88 89 90 91 92

83 84 85 86 87 88 89 90 91 92

Fig. 4.

14 Target

.'~_7.39

12/89

PRICE OF ELECTRICITY

IGOOD DI

- CENTS/KWH83 PRICE INDEXEDBYCPI

83 84 85 86 87 88 89 90 91 92

9

6

10

Satisfied

t Satisfied

o

894TH. OUARTER

88

YEAR

67

RESIDENTIAL CUSTOMERS' OVERALLSATISFACTION WITH FPL

4TH QUARTER COMPARISONS1986 -1989

86

Extremely

rGo Satisfied

,e/ .,// "" E]Somewha• Not at all

Satisfied

l-I-- - -

. tL ~ I~ m

~40

~~30a:wa.

20

60

10

50

#- FOSSIL EQUIVALENT FORCED OUTAGE RATE PARTICIPATION ON QI TEAMS

~ 20100

TARGET- L 90 IGOOD DIe::(a: IGOOOU I Zw 2aoCl l-e::( 15- ~ 70I-:J (3 ~. 00.0 i=60 ~. 554C a:w 10 ~ 50 '"Ua: !Z 400LL W '"I- °30

L a:z 5 W 18.9W Q. 20...J

~ 3.62 10:J 12/89

" 0 0w 83 84 85 86 87 88 89 90 91 92 83 84 85 86 87 88 89

I>

Summer 1990 15

ure occurring elsewhere that hadnot yet been experienced with Unit# 1, so preventive measures orcountermeasures could forestallthose types of failures before theyhappened.

Second, "Condition Assess-ment" WllS started on Unit #1.Condition Assessment is systemat-ic physical inspection of the equip-ment to identify potential precur-sors to failure, much as aircraftmechanics inspect aircraft. (FPLfound and repaired piping cracksthat would have previously beenunreported, for instance.)

Finally, FPL started a Reliabili-ty Rate Profile on Unit #1. An ex-ample is shown in Fig. 5. The pro-file is a projection of Unit #1reliability problems by category in aformat that permits easy discussionof probable problems and counter-measures over a six-year horizon.Note at the bottom of the profile inFig. 5 that there is a row labeled"First Time Event Rate." Not onlyis FPL concentrating on the high

probability recurring failures, theyare trying to preclude many formsof non-experienced first-time fail-ures from ever appearing on thelist.

That's what it takes to converta sick unit into one with nearly thebest forced outage rate (1.22 per-cent) in the United States. It alsoimpresses Deming examiners.

Quality in Daily Work (QIDW)Great execution is the core of

FPL's improvements in actual prac-tice. OIDW is the expression usedto cover standardizing work rou-tines, removing waste from them,promoting the internal customerconcept, and enabling better prac-tice to be replicated from locationto location within the power com-pany, which covers a huge territo-ry.

Throughout the company onecan see OIDW control systems atwork. The systems consist of flowdiagrams, process and quality indi-cators, indicator charts, procedurestandards - and very often com-puter systems designed to over-

come problems in daily work. Byexamining and analyzing work overand over again, employees in everyarea contribute to simplifying theirwork and improving processes.They discover many opportunitiesfor computer systems to free lineemployees from repetitive tasks.

For example, in the case of theMartin Unit #1, a check routine atthe time of an outage reminds re-sponsible parties on the scene tocheck for precursor events andcapture the detail of the current sit-uation, rather than ignore such in-formation while restoring the unit topower. After the cause of failure isdetermined, another systematicroutine is devised to assure thatthe cause of the outage is perma-nently corrected. The logic is guid-ed by the Deming Circle, the laststep of which is action to preserveimprovements. It does no gOOd toknow, for example, that boilertubes will probably begin to crackafter three years' use unless cor-rective action is built into some·

EQUIVALENT FORCED OUTAGE RATETREND UNE & FORECAST

~ GOOD18.13 YEAR·ENDING: -e- ACTUAL

+..~. TARGeT PLANT· UNIT: PMR· #1

50 YEAR: 1990#"~

[/30 COUNTERMEASURE TYPE:W 1990 PROJECTED SERVICE

20 ,~ 1 • IMMEDIATE REMEDV

'0 HOURS =5151 2· PREVENTION OF RECURRENCE•• • -1Jt- ,. 3· PREVENTION THRU PREDICTION•• ,. -1.3'__':140 .. " " " .. 89 .. " " .. ~YEAR- 0U'I'N)1_1I'r(lMIi~ ~. COUNTUNu.auIll ~ - -..cmJ.~...N. _____• -- _. -,- ...... -w_ ,. ... ,- • ,.., GENERATOR FAlWRE , I1PYl02

one's work plan three years hence.

Computerizing Customer TroubleCalls

Deming examiners seemed im-pressed with FPL's use of comput-er systems to assist with dailywork and to develop improvements.Florida Power & Light computersystems are often recognized asthe leader among American powercompanies and are well ahead ofutility systems seen in Japan.

One of the major reasons FPLhas recently cut out-of-service timeis a system for processing custom-er trouble calls. The computer firstchecks whether the customer hasbeen disconnected for non-pay-ment, then begins to zero in on lo-cations and devices that may bemalfunctioning, and routes the callthrough a dispatcher to an appro-priate troubleshooter. A repairmanheading to a scene may have aprobable diagnosis before arrival.An after-action update stores thehistory of the event in the data-base, adding to the information re-trievable by another call- and formore routine improvement plan-ning. The system also collects dataon such things as transformer loca-tions that are frequent lightningsites (transformers can be moved).

The trouble call system is ahuge central system that began in1985 and has been enhancedsince. During the past two years,however, many of FPL's systemgains have come through 35 pro-grammers training the "user com-munity" to do their own program-ming. The training focuses on user-friendly fourth generation lan-guages. The number of desktopsystems contributing to Quality InDaily Work has burgeoned underthis approach.

Just as reduction of forcedoutages improves customer serv-ice, so does the quality of systemswork that interfaces with FPL'sthree million customer accounts.FPL applies its QI process to makeits billing processes, service calls,and customer data as error-freeand helpful as possible. FPL'soverall use of computer systemshas been a major factor pushingfavorable trends in their quality in-dicators.

Summer 1990

Bright IdeasThrough 1987, FPL continued

with a centralized suggestion sys-tem they had used for many years.Each year approximately 600 sug-gestions were submitted to thepersonnel department for evalua-tion. This process typically lastedsix months and fewer than half thesuggestions were implemented.

A task team formed to improvethe suggestion program. The teamproposed to decentralize the sug-gestion system. Simplifying thesuggestion procedures would de-crease the response time. To themaximum extent possible, employ-ee participation in the implementa-tion of their own suggestions wouldimprove morale. And if the primaryfocal point were the supervisor, theadded communication about qualityand productivity at the grass rootslevel would surely be a benefit.

They tried a four-month pilot. Itwas so successful that in March1988, FPL cut the whole companyover to this new suggestion sys-tem, which they labeled the "BrightIdeas" program. In 1988 there were9000 suggestions. In 1989 thiszoomed to 25,000 suggestions,with 55 percent of them implement-ed, many of them immediately.That's an average of almost twosuggestions per employee peryear.

QI TeamsTeams began at Florida Power

and Light in 1981 and their influ-ence has been growing ever since.Functional unit "working teams" re-ceive guidance from lead teams ofmanagers who approve and coordi-nate study themes - and occasion-ally remove barriers to achieve-ment. Special cross-functional taskteams tackle special projects. Allfunctional unit teams are voluntary.Almost half the bargaining unit em-ployees and about two-thirds of allother employees participate.

All the teams use FPL's QI sto-ry format as the logical frameworkfor identifying and solving prob-lems. The QI story format is a sev-en-stage process embodying thescientific method and is similar tothe storyboard processes taught bymany other companies.

Results from 01 teams contin-

ue to increase, and every year FPLincreases the support for them. In1987 FPL introduced a team proj-ect planning worksheet that struc-tures the improvement activities ofteams in much the same way thatany other project at FPL would beorganized and managed. In 1988FPL introduced the Quality Man-agement Information System. Eachteam registers its projects andplans in this computer system, andfrom the system each team can re-trieve project ideas and plans frommany other teams throughout thecompany. The system has been astrong influence to standardize so-lutions without teams "reinventingthe wheel." A summary of the Qlteam support system is Fig. 6.

One of the best features of theQl teams now is the role of super-visors. Supervisors are the directsupport for the QI team in theirarea. Facilitators provide indirectsupport - systems work, trainingmaterials, recognition planning, andideas - the kind of backgroundwork a busy supervisor has littletime to pursue.

Developing PeopleFPL executives think that the

potential of Ql teams and BrightIdeas suggestions remains great.The benefits of empowering em-ployees are just now beginning tobe felt. Like most of us, FPL had tolearn how to unlock this potentialthe hard way-trial with much er-ror.

When FPL began Ql teams, fa-cilitators promoted the teams. Su-pervisory participation was volun-tary. That was a mistake. The samemistake had been made years earli-er with the old suggestion plan-bypassing the person locally re-sponsible for group performance.Supervisors felt improvement wasoutside their responsibility. Themistake now has been rectified. Su-pervisors are in the middle of QIteams and their QI stories, andthey are key players in the newsuggestion system, too.

The changes were nudgedalong by a very heavy trainingschedule. People change takestime and patience. They may quick-ly see the light, but it takes time tounlearn old habits, and time to

I>

17

}

Team Process Support System01 TEAM PROJECT SUPPORT

( 01 TE ....M ) ( SUPERVISOR ) ( FACILITATOR ) ( LEAD TEAM )

01 TEAMS WORK TOGETHER SUPERVISORS PROVIDE RESOUACES FACILITATORS SUPPORT LEAD LEAD TEAMS PROVIDE GUIDANCE,

TO SOLVE PROBLEMS THEY AND TRAINING, ENCOURAGE INVOlVE- TEAM PROMOTION AND PROMOTE ACTIVITIES, MONITOR

ENCOUNTER IN THE WORK- MENT, ADVise ON PAOJECTS AND RECOGNITION AND AID DEPARTMENT PROGRESS AND

PLACE RECOGNIZE ACHIEVEMENTS SUPERVISORS IN TRAINING RECOGNize EFFORTS

(A) AND ADVISINGL.q'STEA 01 TEAM 61 ADVISE ON I REVIEWS ANDREGISTER THEME THEME APPROVESPROJECT PlANNING WORKSHEET 1 (B)

AND PLAN THEMES(D) MONITOA AND PLANS

""" I I"/;, PARTICIPATION REMove BAARIERSltfTOAV11

ADViSE

IMEETING FREOUENCY

UPDATE PROJECT PLAN AND ATTENDANCEMEETING MINUTES

REMOVE PROJECT PlNlBARRIERS

~L \~'-

REVIEW . RESULTS 1< (C)·01 STQAY i I REVIEW AND FEEDBACK ON 0 STORY 1. TEAMWORKI RECOGNIZE TEAMS AND STANDARDIZE ICOUNTERMEASURES

DETERMINE NEXTPROJECT AND < II PROVIDE FURTHER TRAINING ISE T TEAMWORKIMPROVEMENT OBJECTIVE

Evolution (see above)A. The supervisor's supporting role was established in 1986. Additional training was provided in 1988.

B. The team project planning worksheet was developed in 1987 to aid teams in completing projects on schedule.

C. A structured review and feedback mechanism was developed in 1987 to aid supervisors in their advising roles.

D. The Quality Management Information System (QMIS) was developed in 1988 as an online system that managersuse to plan and review team activities.

Fig. 6. From p. 21 of "Summary Description of FPL's Quality Improvement Program," publication of Florida Power & Ught Co., 19a9.

FPL's Internally Taught Courses Directly Related to the Quality Improvement Process

EUGIBLE COURSE TITLE COURSEPARTICIPANTS TRAINED

THROUGHPOPULATION (YEAR DEVELOPED) LENGTH CONTENT THROUGH DEC. 1989 %0 OF

• Extemallv develol"'ll'lrl (DAYS)DEC. 19B8 (Projected) TARGET

EXECUTIVES STATISTICAL CONCEPTS FOR 2' sac AND RELIABILITY TOOLS 18 ,. lDOEXECUTIVI:S 1ClIllll·

ORIENTATION FOR MANAGERS (1983) 1 INTRODUCTION TO alP 168 168 31LEADERSHIP FOR MANAGERS I (1984) 3 MANAGING ai TEAMS 582 582 108

MANAGERS AND LEADERSHIP FOR MANAGERS 111"

851

3 POLICY DEPLOYMENT 605 605 110

ABOVE LEADERSHIP FOR MANAGERS III 1966 3 aUALITY IN DAILY WORK 567 587 107~),~"28]~~L CONCEPTS FOR 5 sac AND RelIABILITY TOOLS 303 426

n

MANAGERS,SUPERVISORS, APPLICATION EXPERT (1987) 15 STATISTICAL APPLICATION 230 230 '00

SELECTED STAFFSUPERVISOR/FOREMAN AWARENESS , INTRODUCTION TO QIP 1021 1021 55

SUPERVISORS(1983)SUPERVISING FOR QUALITY (1986) 5 8~~[3~~~~¥ I~~b~lICY 2470 2470 133

SUPERVISING TEAMS (1988) 2 SUPERVISORY FACILITATION OF 914 ,.... 80TEAMS

2 CIDW FOR NEW SUPERVISORS NA 408 '00

FACILITATORS, TECHNIQUES 1(1985) 3 SELECTED sac TOOLS 224224 NA

TEAM LEADERS TECHNIQUES I (1986) 5 SCAnER DIAGRAMS 724 1658 '18AND CONTROL CHARTS

FACiLITATORS FACILITATOR TRAINING (1983) 5 alP ADMINISTRATION 970 970 '00AND FAC,IUTATINGSKILLS

TEAM LEADER S TEAM LEADER TRAINING (1962) 5 OC TOOLS, GROUP DYNAMICS 6200 6980 '00

TOTALS 13 COURSES DEVELOPED BY FPL 56 OIP 15017 17830 NA

Fig. 7. From p. 21 of "Summary Description of FPL's Quality Improvement Program," publication of Florida Power & Light Co., 19a9.

18 Target

Fig. 8. Adapted from p. 14-15 of "Summary Description of FPL's Quality ImprovementProgram," publication of Florida Power & Light Co., 1989.

1988

• Executives unable to effectively address ----+ @ Formalized cross-functionalproblems which crossed departmental lines management

• Corporate and departmental ----+ ® Introduced Quality/Delivery and CostQuality/Delivery activities did not link Management Systems

• Management unable to confirm that de- ----+ ® Initiated Levell, II and III Managementparlment functions aligned with company Reviewsobjectives

1989

rl989 FPl Management System (Summary),

~ I ANALYZE ENVIRONMENT I EXECUTIVE COMMITTEE IIDENTIFY 18 ESTABLISHCUSTOMER NEEDS LONG·TERM PLANS

" .-~0 CONFIRM VISION

~

~ POLICY DEPLOYMENT• CROSS·FUNCTIONAL 4j COMMInEE0 COMMITTEES• CDc • ESTABLISH MIDTERMz ANALYZE CORPORATE CD AND SHORT-TERM PLANS

The Deming Prize Process

Deming Prizes are awarded in three categories:

1. Individual prizes2. Application prizes given to companies and other operating organiza-

tions3. Awards (not called prizes) given to factories.Formally, the number of prizes given annually is not limited, but practicallya limit is set by the intensity of the examination process and by the timeof examiners and advisors necessary to conduct it. One hundred thirtycompanies have won an Application Prize since the Deming Prize began in1951.

The Union of Japanese Scientists and Engineers (JUSE) appoints thechairman of the Deming Prize Committee. In turn, the chairman appointsthe committee and sub-committees. Company applications are examinedby the Applications Prize Sub-committee, which can have no membersfrom companies.

The examiners are recognized experts. Many are professors who haveserved the Deming Prize Process for many years and have essentiallymade a career of strengthening quality in various kinds of organizations.

After each company's initial application is accepted as eligible for theprocess, they submit a description of their quality practice which is thickand detailed. Assembling this corporate description is an extraordinaryself-examination in itself. Examiners review these and become very familiarwith the company. Sometimes the examiners even restate the DemingPrize checklist in applicant companies' internal terminology.

Based on review of the written descriptions, only companies believedto be successful in Company Wide Quality Control are selected for a sitevisit. Each site visit consists of three parts:

Schedule A:Company presentation to further acquaint examiners with the companyand highlight practices the company wishes to bring to the examiners'attention.

Schedule B:After a brief overview by the head of each organizational unit examined,the examiners ask questions - often in depth. At the conclusion of eachsub-unit examination, there is a wrap-up session during which the com-pany can follow up on unanswered questions or correct misunderstand-ings.

cept that line employees are oftenyour customers, which is why themiddle management courses wereentitled "leadership."

The FPL Management SystemThere are four key characteris-

tics of the FPL management sys-tem as it has evolved over severalpolicy deployment cycles:1. Customer satisfaction became

the focus of management atten-tion rather than cost control.While a major signal comes fromformal surveys of the custom-ers, learning of customer needsand preferences has become ev-erybody's business, and FPL isattempting to discern thoseneeds five, ten, and 20 yearsout; as well as today. Of course,other kinds of customers arerepresented by the regulatoryagencies.

2. M!lnagement reviews, cascadingthrough all three managementlevels, check on improvementprogress monthly. There is astrong emphasis on follow-up,asking repeatedly whether FPLis making progress on its toppriority goals. Goals are long-term; checking progress is fre-quent. Managers now reviewprogress in the light of muchbetter statistical insight thanpreviously. They expect to seesome random sWings in resultsof performance, but to give con-stant attention to betterment ofperformance.

As a result of the DemingPrize Process, the term "align-ment" entered FPL's corporatelanguage. Suppose an examinerwanted to field check any of themeasurements in FPL's massivewritten description. Glaring dis-crepancies would surely bringon a continuance, so managersvisited work locations andbrought people in from the field

20

to assure "alignment" - verifythat data reported could be sup-ported by evidence at thescenes of action.

"Alignment" forced confron-tation with reality in practice. Nomore fuzziness in reporting, andchecking evidence stimulates apenchant for action in anyone

previously gliding along on meretalk. "Alignment" was so benefi-cial that it continues in the man-agement reporting systems atLevels I, II, and III. Typical ques-tions: Are policies understood?Are we working on priority prob-lems? Is corrective action QIDW

Target

t

Executive Session:The examiners as a group interview the top management to confirmtheir commitment to the company's quality processes and validatefindings from examination of sub-units. The Deming Prize Process con-ducts the interview with top executives last, after working from detailedevidence to conclude the company's actual overall strategic direction.(Westerners usually start with top executives' strategic direction, thenaudit the details to verify that the direction is being carried out.)

The objective of the Deming Prize examination is not to declare thatone or more companies are somehow "best," although publicity surround-ing the award ceremony may sometimes imply that. The objectives are toestablish that a company has so thoroughly deployed a quality processthat it will continue to improve long after the prize is awarded, and that insome phase of its development the company has a practice worthy ofsharing with other top-quality companies. Winning the Deming Prize is asmuch recognition of an organization's capability as of its prior accomplish-ments.

The examiners use a scoring system on a scale from 1-100, but thescores are never disclosed. Each examiner must score every sub-unit theyexamine during a site visit. To "pass," the top executives must receive ascore of at least 70 and an average of all the sub-unit scores of thecompany must average 70. No sub-unit score can be below 50.

• There are no "losers." If a company fails to pass any phase of itsexamination, the examination process is continued into another year, andthe prize is said to be "pending." The company's name is not publiclydisclosed. Strengthening each company itself is the heart of the totalDeming Prize Process. A "pending" company continues to process until itpasses - or until it withdraws itself. The process is intense enough thatapplicants cringe at the thought of a continuation.

The examination process is very demanding of the examiners too. Thesite visits are as broad and deep as the written descriptions of quality. Forexample, an eight-man visitation team covered FPL in two one·week ses-sions which began three weeks apart. (There were four examiners for thefirst session; six for the second.) In addition to top executives and thegeneral offices, examiner teams covered three of five divisional offices andfour of 13 generating plants. Each day of review was tightly scheduled.

After the examination, the CEO of every company receives a detailedwritten feedback report about a month later. Perhaps the best result of theprocess is learning what to do to become better and being stimulated todo it.

in place and working?3. Cross-functional management

permeates the quality improve-ment process, starting withcross-functional committeeswho participate in the policy de-ployment process. Improvementobjectives may be assigned to

Summer 1990

any individual executive fromany functional position, authoriz-ing leadership of a broad projectcrossing functional lines. Large-scale improvement processestypically are carried out bycross-functional teams.

4. Integration of the budget withquality improvement is accom-

plished through "catch ball"consensus and prioritization.Both are embedded in policy de-ployment. Quality has a big pay-back, but improvement policiesmust be deliberately planned.

Fig. 8 presents another view of theFPL management system.

Capturing the EssenceAlthough in a large company

few activities are as simple as one,two, three, FPL discovered thatsorting through the high Pareto,high-priority problems is an exer-cise in simplifying. At the end ofthe Deming site visit, after havinganswered all the picky, detailedquestions, one of the examinersasked what key points FPL wouldmake to other organizations aspir-ing to quality performance. FPL'sanswer boiled down to three simplepoints:1. Top management must be totally

committed - so absolutely con-vinced that they will commit theirpersonal time and their reputa-tion to leading the effort.

2. The company must support edu-cation and training on a verylarge scale for a very long peri·od of time. Learning to make itall seem simple and naturalcomes after long periods duringwhich it seems that very littlegood may ever result.

3. To gain the full benefit, qualityimprovement processes must becompany-wide, transforming ev-ery aspect of the business.

At Florida Power and Light, themusic is still bUilding toward a fullcrescendo.

1The New Grove Dictionary of Music and Mu-sicians; ad. Stanley Sadie. McMillian Pub-lishers Ltd., London, 1980.

Author:AI Henderson is a Hinsdale, IL-basedwriter.

21