Self-assessment and quality awards: a formula for making quality strategic?

Alan BrownAssociate Professor in Management, Edith CowanUniversity, Perth, Western Australia

Ton Van der WieleDirector of the Strategic Quality ManagementInstitute, Erasmus University, Rotterdam,The Netherlands

Robert MillenProfessor of Operations Management, College ofBusiness Administration, NortheasternUniversity, Boston, USA

Self-assessmentand qualityawards: a formulafor making qualitystrategic?1

. Self-assessment can assist integrationof quality principles and corporatestrategy

. Many organisations use qualityaward guidelines for strategic andoperational planning purposes

. Bene®ts gained include: employeecommitment, uni®ed direction andenhanced communication of plans

. Research evidence from Australia,Europe and the USA shows bene®tscan be obtained from self-assessmentCopyright #1999 John Wiley & Sons,Ltd.

Introduction

It is frequently argued that quality is a key togaining competitive advantage. Thus, qualitymust be viewed as a strategic variable, some-thing which permeates all business processes,activities and functions, yet the experience inmany organizations is that quality is often seenas an add-on; something which is promoted asbeing a driving force, yet, in reality is seen asmarginal. The challenge therefore, is how toincorporate quality management principles

into the strategic planning process andensure that all organizational functions areinvolved. This paper examines how self-assessment and quality award guidelines canbe integrated with organizational planning.

Quality and strategy

The view adopted in this paper is that forquality to be a strategic variable it must be builtinto all organizational activities and functions,and that performance goals and targets are setin terms of quality variables. The example of an

Quality is a key to gainingcompetitive advantage

1This paper is based on a keynote presentation at the 3rdICIT in Hong Kong in 1998. All three authors have beenengaged in collaborative research on self-assessment andISO 9000 over the past few years.

Copyright # 1999 John Wiley & Sons, Ltd. Strategic Change, March±April 1999

Strategic ChangeStrat. Change, 8, 87±93 (1999)

Australian Quality Award winning companywhich changed its strategic planning processto incorporate the quality philosophy high-lights this.2 A new approach was developedwhich focused on four key areas (or Impera-tives): customer satisfaction, working together,improving productivity and sales and helpingsuppliers and dealers. All areas of the organiza-tion could then relate to these to guide thedevelopment of action plans. They also pro-vided indicators which could be benchmarked.The top level plan was reformulated on two A4pages.

Another dif®culty with conventionalstrategic planning is that each organizationaldivision often develops its own plan withoutany unifying focus or link to other parts of theorganization. As Raynor (1992) suggests,marketing advocates emphasize marketingstrategies, human resource managementemphasize HRM strategies, manufacturingspecialists emphasize technology and so on.Quality, on the other hand, transcends and isintegral to all organizational functions, forexample, customer satisfaction becomes afocal direction for all of these functions in aquality oriented strategy.

The various quality awards such as theBaldrige, the European and the Australian, allrequire applicants to demonstrate how qualityis integrated into their strategy. Othercategories such as people also implicitlyrequire an organization to incorporate qualityinto their human resource strategy. They alsoaddress the planning process and how theorganization sets its goals, performanceindicators, and uses data such as customerrequirements and benchmarks.

Juran (1995) refers to strategic qualityplanning (`jishu kanri' is the Japanese term)as the way to make managing for quality a partof managing the business. He makes a com-parison with managing for ®nance, andindicates the following steps to make qualitystrategic:

Ðenlarging the business plan to include goalsfor quality;

Ðdeploying these goals to lower levels(including determination of resourcesneeded, agreement on the actions to betaken, and ®xing responsibilities for theseactions);

Ðdeveloping measures for evaluation of pro-gress against these goals;

Ðreviewing progress by management on aregular basis;

Ðrevising the reward system to support thesegoals.

Dean and Bowen (1994) cite Schonberger(1992, p. 81) who claims that total quality `caneffectively govern much of what convention-ally required executive level strategic plan-ning'. They suggest (1994, p. 403) that `if anorganization is continually improving quality,other strategic considerations are of secondaryinterest' since `improving quality drivesimprovements on other sources of competitiveadvantage, particularly cost'.

Self-assessment and quality awards

The notion of self-assessment refers to a regularand systematic process of evaluating an organ-ization against a set of criteria such as a qualityaward. Research in Australia and Europe(Brown and Van der Wiele, 1996a, 1996b; Vander Wiele and Brown, 1995, 1996; Van derWiele, 1995) indicates a strong interest in usingquality award guidelines for self-assessmentpurposes. Several ways of using award modelsfor self-assessment are possible:

. Taking the award guidelines and followingthese for internal use in the same way asdescribed for award applicants.

. Adjusting the criteria and/or the scoringto suit the speci®c situation and goals ofthe organization.

. Specifying the path from the presentsituation to the end goal of being a worldclass enterprise, to identify the stepsrequired over a longer period of time.

Organizations adopting the third optionoften utilize a self-assessment matrix. The

2Australian Quality Awards Foundation. Ford MotorCompany of Australia Limited: A Case Study.


88 Alan Brown et al.

origin of the matrix can be traced back toCrosby's quality maturity grid in which qualitymaturity levels are de®ned with regard tospeci®c criteria (Crosby, 1979). The qualitycriteria are usually based on quality awardswith modi®cations related to each organiza-tion. It is a very visible means of showingwhere an organization is and where it needs tohead and facilitates communication and de®ni-tion of quality within organizations. In generalthe quality self-assessment process demandsconsiderable time and attention, and there-fore the whole process has to be linked andintegrated with the existing planning andreview process to ensure that the qualitycriteria serve as a guide for the entireorganization.

The authors have been involved in aninternational collaborative research project onself-assessment. Initial research on self-assess-ment practices in six European countriesreported by Van der Wiele and Brown (1995)was replicated in Australia (Brown and Van derWiele, 1996a, 1996b) and more recently in theUSA (Brown et al., 1998). The samples used inthe research studies have included members ofthe European Foundation for Quality Manage-ment (EFQMÐsix countries), the AustralianQuality Council (AQCÐall of Australia) and theAmerican Society for Quality Control (ASQCÐBoston region). Some of the Australian ®ndingsare presented here.

Self-assessment practice

Motivation for using self-assessment? Reasonswhy the organizations decided to carry outself-assessment are shown in Table 1. For eachpossible reason respondents could answer ona ®ve point scale from 1 (not important) to 5(very important).

The strongest reason for self-assessment is asan issue for management and business im-provement. This supports the idea that self-assessment is a very useful tool for manage-ment to make quality more concrete andto create a link with the normal businessactivities.

Factor analysis on the responses gave threefactors, namely:

ÐFactor 1: Internal reasons to manage thebusiness

ÐFactor 2: Internal reasons to provide motiv-ation to start or restart quality improvementactivities

ÐFactor 3: External reasons

There are some differences between organ-izations starting self-assessment focusing onone of the three reasons. Organizations drivenby internal reasons are more mature regardingTQM activities and are also signi®cantly morefocused on using the criteria of the AustralianQuality Award (AQA). Organizations startingfor internal motivational reasons differ in a waythat they use a quality maturity matrix signi®-cantly more often. Organizations starting dueto external reasons seem to be focusedsigni®cantly more on using checklists or thecriteria and norms of the ISO-9000 qualitysystem certi®cation series. This last group oforganizations may not be aware of the differ-ence between ISO audits and quality manage-ment self-assessment.

Whilst full comparative analysis betweenEurope, Australia and the USA is not possiblehere, there is, however, almost universalagreement that self-assessment is a means oforganizational improvement, motivation and

Table 1. Reasons for using self-assessment

Reason Mean Std dev.

To ®nd opportunities forimprovement

4.42 0.88

To direct the improvement process 4.25 0.85To link quality management with

strategic planning4.18 0.87

To create focus on the TQM modelof management

4.13 0.97

To manage the business 4.06 0.94To provide new motivation for the

quality improvement process3.85 1.19

To go for a quality award 2.48 1.44

Self-assessment is a means oforganizational improvement


Self-assessment and quality awards 89

focus for the quality drive, and a means oflinking quality with strategic planning, ratherthan a process aimed at getting a quality award.

How do companies use self-assessment? Theself-assessment process typically consists ofseveral steps, e.g. training, data gathering,writing the self-assessment report, assessingthe report by assessors, presenting the resultsto the management of the unit assessed,de®ning improvement goals and activities andlinking these to the business planning.Research ®ndings are shown in Table 2.

Factor analysis gives a four factor solution:

ÐFactor 1 (Assessor driven self-assessmentapproach): Items related to the role ofassessors contribute to this factor.

ÐFactor 2 (Management driven approach): Allitems related to the role of the managementof the business unit contribute to thisfactor. Also two items re¯ecting the com-munication to employees contribute to thisfactor.

ÐFactor 3 (tools and techniques drivenapproach): This factor combines a mix ofinstruments which may be used in the self-assessment process.

ÐFactor 4 (Top management drivenapproach): Items which re¯ect the role oftop management in the organization con-tribute to this factor.

These ®ndings suggest that self-assessment isseen as an issue for management and a methodfor driving continuous improvement activitiesin a planned way by giving meaning to qualityand providing a framework for directingthe quality activities. Again, there is reasonable

agreement on the top ranking items andimportance scores between Australia, Europeand the USA. All see a strong link between self-assessment and business planning.

What are the results of self-assessmentactivities? Respondents were asked to whatextent improvements have been realized for aprescribed list of issues since the implementa-tion of self-assessment. Some related to thespeci®c AQA criteria. The mean scores (on ascale from 1 � no improvements realized, to5 � considerable improvements realized) aresummarized in Table 3.

One interesting ®nding in relation to the bestway of implementing self-assessment was thatcompanies who were using a quality maturitymatrix have higher scores on nearly allimprovement issues. The table indicates thatquality award criteria are the highest rankingitems for organizational improvements

Table 2. Steps in the self-assessment process

Step Mean Std dev.

Business unit develops an improvement plan 4.07 1.08Management team of business unit reach consensus on strengths and areas for improvement 4.06 0.96Business unit employees receive training 4.03 1.10Scoring as well as strengths and areas for improvement are communicated to employees

of business unit3.89 1.12

Management team of business unit discuss data gathered on all criteria 3.83 1.10Top management level monitors improvement targets 3.79 1.18Outcomes of the self-assessment process are linked to the business planning process 3.74 1.13Management team of business unit receive training 3.72 1.20Business unit employees gather data on all criteria 3.72 1.08

Table 3. Improvements realized since the implementa-tion of self-assessment

Criteria category Mean Std dev.

Customer focus (category AQA) 3.95 1.01Organizational performance

(category AQA)3.53 0.96

Quality of process, product andservice (category AQA)

3.52 0.97

People (category AQA) 3.48 1.05Line management understand better

what TQM is3.47 1.15

Policy and planning (category AQA) 3.40 0.97Line management understand better

how important TQM is3.40 1.06

Customer complaints 3.40 1.07Leadership (category AQA) 3.34 1.08Customer retention 3.32 1.21Errors or defects 3.28 1.10



probably re¯ecting the integration of these inthe self-assessment process.

The most recent US survey enabled acomparison between respondents using andnot using self-assessment (Brown et al., 1998).Although no signi®cant differences were foundin the response for annual sales turnover ormarket share, more self-assessment usersindicated a positive trend in pro®ts for theprevious three years (difference signi®cantp5 0.05). Whilst the direction of causation isnot certain, based on the self-reporting ofrespondents, this gives some indication thatself-assessment may be a process which canpositively impact on performance.

The contributing factors to such improve-ment vary, although for companies experien-cing positive trends in pro®ts they suggestedpolicy and planning, quality of product,process and service, reliability of operations,employee suggestions, better understanding ofTQM by line managers, cost savings, andcustomer retention amongst others. Many ofthese improvements have also been realized bycompanies with positive trends in marketshare.

Self-assessment and business planning

As part of the research project, case analysis ofself-assessment in a number of large Australianorganizations was made. They comprised largepublic and private sector organizations with

several having won AQA and they areconsidered representative of a broader rangeof Australian enterprises who practise self-assessment.

Most had commenced quality activities inthe early 1990s but had generally found thatsuccess was limited to parts of the organizationand often for only short periods of time.Furthermore, the focus was often on establish-ing improvement teams rather than adopting astrategic approach which would permeate allactivities and processes. In order to revive andor sustain their quality efforts, all had soughtways of integrating quality throughout theorganization, so either the AQA guidelines orothers served as the starting point. However, tomake these meaningful and operational, self-assessment systems were developed.

A feature of these organizations was theintegration of quality and the business plan-ning process. Practices adopted by theseorganizations included:

. mission statements, visions and valueswhich re¯ect quality principles.

. all functional areas use quality principlesas a focus for their operational planningrather than being the exclusive provinceof manufacturing areas.

. strategies are driven by quality basedperformance measures such as customerand employee satisfaction as well as®nancial measures.

. benchmarking is frequently used.

. employee satisfaction surveys are alsoused as a measure of internal customersatisfaction.

. both the employee and customer satisfac-tion surveys provide feedback which isused to determine strategic direction inthe next planning period. Other inputsinto the planning process include bench-marking data.

. planning is devolved throughout theorganization with people being involvedin planning for their respective depart-ments and divisions.

. plans are monitored and evaluated on aregular basis. Feedback from customers

Table 4. Self-assessment and business performance(trends for past three yearsÐUS survey data)

Percent of®rms utilizingself-assessment

Percent of®rms not

utilizing self-assessment

Annual sales turnoverPositive trend 72 69Remained constant 24 19Negative trend 4 12

Market sharePositive trend 60 54Remained constant 34 38Negative trend 6 8

Pro®ts/Return on salesPositive trend 72 52Remained constant 19 22Negative trend 9 26



and employees in particular are an import-ant part of this review.

. senior corporate managers are involved inreview of quality as it becomes a measureof overall organizational performance.

. quality is an essential part of all reviewprocesses. Quality is integrated in indi-vidual review systems, for example relatedto promotion and bonuses. Also qualitymust be part of the regular business unitreview.

. considerable effort is given to commun-icating the quality principles and assistingall parts of the organization to integratethese into their planning processes. Thismay involve internal consultants or men-tors or be part of the manager's role. Thismay be facilitated by having briefstrategies such as a one page documentwhich can be displayed throughout theworkplace, making it visible to all.Furthermore, it serves as a working planwhich all sections of the organization canuse to develop their own strategies.

All of these help reinforce the signi®cance ofquality and enable all employees and managersto integrate quality principles into everydayactivities. Obviously, considerable resourcesneed to be devoted to this to initially set it upand ensure that there is ongoing commitment.

Self-assessment matrices

In a recent Australian survey (Van der Wieleand Brown, 1995) 27% of respondents indi-cated that a quality matrix was used in theirorganization, while a more recent US surveyfound 31% of the sample using a matrix(Brown et al., 1998). The matrix provides astrategic focus by linking the vision to actionstrategies based on quality. All sections of theorganization can use these to identify wherethey are and where they need to be. They areable to identify speci®c actions/measures ofquality within each cell of the matrix to givemeaning to quality progress. The respons-ibility for quality management is then placedthroughout the organization from seniorexecutive level to `front-line' operational

levels. Most often the criteria of the AQAmodel or a slightly modi®ed version of thecriteria de®ned were used. The maturity levelsin the matrix varied between 5 and 10. Thecriteria have been speci®ed on each level insuch a way that managers can more easilyidentify what needs to be in place and whathas to be done to grow to the next level ofmaturity.

Results from the Australian survey on qualitymanagement self-assessment indicate that com-panies using a quality matrix in their self-assessment approach have a higher degree ofinvolvement of management in the self-assessment process which might indicate thatthe quality improvement activities are increas-ingly being seen as related to the strategicissues of the organization.

The claimed bene®ts of such guidelines are:

. they provide strategic direction on thedimensions of quality.

. they align quality processes and activitiesthroughout an organization by de®ningquality in terms of principles which allowindividual operating units of large organ-izations to interpret the meaning in theirown terms.

. they can be used to develop short tomedium term targets for the organizationand various units.

. they serve to focus attention on themeans to achieving better organizationalperformance rather than only on theoutcomes expected.

. they focus on measurement such ascustomer satisfaction or employee satisfac-tion to use as indicators on the matrix.

The quality matrix provides a workingdocument used by all sections of the organiza-tion and represents a change in focus comingfrom more traditional approaches to strategywhere the plan itself was often more importantthan its implementation. How many grandplans developed in large planning divisions orby external consultants were successfullyimplemented?

However, the use of a matrix does requireconsiderable resources to develop it and



relevant guidelines and assist organizationalunits to use the matrix for quality. Trainingmentors may be one way of dealing with thisproblem. So far its use has been primarilycon®ned to large organizations who have theresources to develop these plans.

The organizations featured in this paper areattempting to integrate quality principlesthroughout the organization by establishingguidelines for all functional areas and all levelsto adopt. The in¯uence of quality awardguidelines plays an important role in thisprocess, especially as they have been incorp-orated into the quality matrices which all use. Itensures that everyone in the organizationdevelops a strategic focus on quality.

Overall, the research which we have under-taken so far suggests that organizations arelinking quality with strategic managementprocesses by adopting self-assessment whichincorporates quality award criteria. This servesas a central driver for organizational improve-ment at both strategic and operational levels.

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Self-assessment and quality awards: a formula for making quality strategic?