Project Management Institute

TQM and partnering

an assessment of two major change strategies

Concerns of Project Managers

ISSUE FOCUS: Partnering

Donald C. Mosley and Carl C. Moore, University of South Alabama, Mobile, Alabama

In the past five years, American firms have had a major comeback with respect to gaining recognition for improving productivity and quality, and lowering costs. The most widely discussed strategies of change that have gained this worldwide recognition have been Total Quality Management (TQM), partnering, and reengineering. Despite a number of articles that question whether these strategies are fads and worth the time and expense, their use in organizations is increasing. An assessment of two of these strategies of change is relevant and timely.

We focus our analysis on TQM and partnering because of our experience with these strategies in the management of large construction projects. TQM and partnering are complementary processes and both require an organizational environment of trust, open communication and employee involvement. The partnering process is designed to create an effective project management process between two or more organizations, while the focus of TQM is continuous internal improvement to meet customer needs. According to Paul Tucker, chief of construction of the largest U.S. Army Corps of Engineers district, partnering has more clearly defined boundaries than TQM. Tucker, who is a strong proponent of both TQM and partnering, goes on to say, “when you enter into a partnership, you know what you are getting into and you can get your hands around it.”l

THE FOCUS OF TQM

Most experts consider W. Edwards Deming and J.M. Juran the pioneers in Total Quality Management. It is well known that these Americans first received their major recognition and successes in Japan. In fact, the most coveted award for outstanding quality in Japan is the “Deming Prize.” The Malcolm Baldrige awards were patterned after the Deming Prize. One essential feature of Juran's approach “is his insistence that quality apply to the efforts of everyone in an organization and to all aspects of operations from resource acquisition through reduction to finished goods and services.”2

In essence, the basic message of both Deming and Juran for TQM is:

  • Commit to quality improvement throughout your organization.
  • Attack processes, not employees.
  • Strip down the process to find and eliminate problems that diminish quality.
  • Identify your customers and satisfy their requirements.
  • Instill teamwork and create an atmosphere for innovation and permanent quality improvement.3

In regard to the last point of instilling teamwork, Pauline Brody of Xerox has noted that TQM has two aspects—a hard analytical side and a softer behavioral side involving teamwork. She indicates that it is the latter which is the more critical and the more difficult to achieve. We shall come back to this key point again and again.

In what some consider the best book published on TQM, Saskin and Kiser state that “TQM means that the organization's culture is defined by and supports the constant attainment of customer satisfaction through an integrated system of tools, techniques, and training. This approach involves the continuous improvement of organization processes resulting in high-quality products and services.”4 Saskin and Kiser emphasize a cultural change usually involving more teamwork.

Track Record—Success Stories

The literature is replete with TQM success stories: Ford, Chrysler, and GM (with Saturn and Cadillac) successes are well-documented. Large organizations in-eluding Xerox, Federal Express, U.S. Navy,
WalMart, U.S. Army Corps of Engineers and Motorola have all documented quality success stones along with smaller firms such as L.L. Bean, Steelcase and Preston Trucking. TQM leader, Motorola, prides itself on making almost perfect products and L.L. Bean shipped a half million packages without making a mistake.5

The culture in these organizations was changed from a top-down approach to a team approach. Employees were trained both in group dynamics and statistical process control. Goals and rewards were modified to reflect the changed culture. Above all, the customer ruled supreme.

Cianbro Corporation, a contractor headquartered in Pittsfield, Maine, has been very successful in implementing TQM. Cianbrois a construction firm that has been in business for 40 years and whose following mission statement is succinct, visionary, idealistic and powerful.

The Constructors-Building a Better Future

A team dedicated to safety, dignity and respect for all; the betterment of its environment and community-serving clients with quality, innovation and efficiency.

Track Record—Failures and Causes

Unfortunately, a number of studies pinpoint that many U.S. companies are stumbling in their implementation of quality improvement efforts. Based on the Electric Power Research Institute's survey of more than 300 large companies in 1991, satisfaction with quality improvement efforts ranged from 35 percent to 60 percent among executives who implemented the TQM programs.6 A study of 30 quality programs by McKinsey Consulting noted that “two-thirds had stalled or fallen short of yielding real improvements.

MANAGEMENT APPLICATION AND PRACTICE I

Highlights of the Cianbro Approach

Cianbro stands out as one of the peak performers from the standpoint of “walking their talk.” More so than most organizations, Cianbro has an unusual ability to learn, grow and develop from experience. By realizing that we live in a changing world, and through problem solving and innovation, they have continually added to their strengths.

This is illustrated by a story related by the company's president, Peter Vigue. Ten years ago, a fatality occurred on a construction project where Cianbro was the prime contractor. For moral reasons, management decided to place safety as the number one priority goal for the company. This safety goal was communicated to all employees and with the intense involvement of employees, methods were designed to achieve a “safety first” environment. For example, physicians were hired to design and tailor an employee exercise program. Every morning all supervisors met with their employees and led them through a ten-minute exercise routine. Next followed a short meeting during which safety issues or any other issues were discussed and dealt with by the workteam. As a byproduct, the bottom line has improved; insurance and workmen's compensation costs are much lower.

Similarly, action plans, strategies, and policies have been developed for achieving quality, innovation, and efficiency goals. The customer/client is involved from the beginning in developing with Cianbro a project management plan oriented to providing the best planned and executed construction operation possible.

The company is a strong supporter of both TQM and partnering. Many of Cianbro projects incorporate a TQM approach in both the design and construction phases.

The company developed an employee stock ownership trust where the employees own a large percentage of the corporation. As owners sharing the risks and profits of each project, the employees are highly motivated and the spirit of cooperation and concern for the client/customer is permanent.

What causes some organizations to achieve dramatic improvements in performance and others to fail or give up because the results expected are not being achieved?

The number one reason for failure is lack of higher management philosophy that is compatible with the type of culture needed to make TQM work. Specifically, the culture change needed is more emphasis and focus on teamwork, joint problem solving, and the human factor. These are the elements that form the foundation of the partnering process. Less frequently, problems occur when higher management is supportive but there is not a comparable change in attitudes and behaviors at lower levels.

Other reasons cited in the literature are:

  • Downsizing occurring during the process (fear of loss of jobs creates resistance to participating in creative problem solving and solutions);
  • Involving only a small percentage of employees in the improvement process;
  • Using a piecemeal approach;
  • Isolation of quality programs from day-to-day operations;
  • Not seeking input from clients/customers;
  • Process is too general and tries to cover too much (lack of focus on a small number of changes or issues);
  • No relation between reward system and quality performance goals and measures;
  • Proliferation of consultants with varying degrees of competence and the improper use of these consultants by organizations.

THE FOCUS OF PARTNERING

TQM is basically a process internal to each organization. Partnering, as applied on large-scale construction projects, is designed to develop trust, communication, common goals, and a decision-making/problem-solving process among a number of different organizations. We have facilitated a number of projects that involved five or more organizations. These organizations represent the client, designer, contractor, regulator and community interest points of view.

One project included the Corps of Engineers, Environmental Protection Agency (EPA), the State Environmental Agency, the National Park Service, a major contractor and two subcontractors. Another project involved four major contractors, each constructing adjacent portions of a larger facility, where there was no contractual relationship between them; however, the project required a high degree of coordination and planning among these companies to meet an extremely short schedule. Partnering provided the structure for these companies to work together as one team.

Partnering provides an informal management structure for the organizations to implement the elements of the TQM process as if all parties were working in one organization. Typically, the key people do not even know one another at the beginning of a construction project. An initial partnering workshop is used to develop trust, communication, and establish processes which will use a team approach for decision making. The required processes include developing a common set of goals that all support a conflict resolution model, methods to empower those on the site with the maximum decision making authority, and a method to track the effectiveness of the partnering process.

If partnering creates a well-organized team with effective processes, then the elements of the TQM process can be brought into play to manage the project.

Track Record—Success

The State of Arizona, under the supportive leadership of the director of transportation, has had a most successful partnering program for a number of years.

Carl Henson, chief of construction of the Corps of Engineers for the Los Angeles District, has stated that out of 22 projects that used partnering, only two have not met or exceeded expectations. Recently, the Arizona Department of Transportation reduced the claims department from four people to one, having had no claims in over two years.

Experience on over 100 projects has resulted in a success rate of meeting or exceeding goals and expectations on over 90 percent of the projects. Below is an example of the evaluation of the success of the Bonneville Lock project on the Columbia River in Oregon.8

Track Record—Failure and Dangers

Partnering failures can occur and have occurred due to both external and internal factors. External factors include significant structural changes in the scope of work or errors in bidding. In a major four-year project, all goals were achieved with the exception that the contractor lost a significant amount of money due to an unrealistically low bid. Another project encountered significant environmental changes, which made it difficult to define the scope of work for the contractor, thus placing great stress on the partnering process.

In common with other types of change efforts, internal problems occur because of either a lack of support of top management or a Theory X philosophy in managing on the part of key leaders. A Theory X philosophy encompasses a belief that since most people will try to get away with as much as they can, they must be constantly supervised. Edgar Schein, an international expert on organization culture and process consultation, has stated “you show me an organization that has a key leader with Theory X assumptions about people and I predict they will eventually screw things up.”9 In a major complex project involving three government agencies and three private construction firms, an on-site survey revealed that two of the government agencies had high offsite Theory X managers who were causing excessive and unnecessary difficulties in getting the project completed. Some of the consequences were high turnover and excessive stress on site, cost overruns, and the unnecessary firing of a major subcontractor.

A related danger, although not as serious, is the lack of ability of a few key on-site people to change attitudes and behaviors that are consistent with partnering. By key people we are referring to inspectors, foremen, and on-site engineers and managers.

Other dangers include changes in key personnel at the site level without orienting them to a partnering approach; major unanticipated site conditions not considered in the original bid; inexperienced or incompetent facilitators. In one case an inexperienced facilitator encouraged partnering organizations to bring their respective lawyers to the initial partnering workshop. In this instance a partnering agreement was never signed and the project has been involved in litigation.

PARTNERING: THE KEY FOR LONG-TERM TQM

Despite the difficulties, more and more firms are utilizing internal partnering as a result of experiences with external partnering. Their logic is that since partnering works so well on a project basis, it should work equally well to build management teams within the organizations. They are finding that internal partnering is not only complementary but improves their TQM effectiveness.

The track record of partnering in meeting or exceeding expectations is considerably higher than the TQM record. The theoretical reason for this is basic—partnering directly confronts, in a two- or three-day workshop, the more difficult behavioral side involving teamwork and joint problem solving. It does this by accelerating the successful passage through the stages of group development—forming, storming, norming, and performing. It also does this by modifying attitudes and behavior so that key participants can function creatively in what the late Rensis Likert identified as “System 4's way of operating.”

Long before the Japanese success with participative team work, Likert and his team of researchers at the University of Michigan documented that successful shifts from management Systems 1 and 2 to Systems 3 and 4 led to significant improvements in performance and satis-faction.13 Following is a brief description of these four leadership styles.

MANAGEMENT APPLICATION AND PRACTICE II

Mission Statement of the Bonneville Navigation Lock

We, the partners involved in construction of the Bonneville Navigation Lock walls, adopt as our joint mission the following:

  • To construct a high-quality product, safely, in optimal time so that all stakeholders are proud to have contributed.
  • To develop a mutual trusting and cooperative relationship and execute the contract in such a manner that, upon substantial completion, the project is administratively as well as physically complete and precludes the need for litigation.
  • To minimize impact on visitor access and operation and maintenance of the Bonneville Powerhouse and recreational facilities.

How Well Goals Were Met
(1 = Ineffective, 5= Effective)

  1. We have constructed a quality project, on time, and under budget.
    Mean Score 4.5
  2. We provided a safe work environment. Mean Score 4.65
  3. We succeeded in developing a mutual, trusting, and cooperative relationship during the project. Mean Score 4.85
  4. We were successful in minimizing the impact of visitors to Bonneville recreational areas. Mean Score 4.65
  5. We succeeded in the contractor and subcontractors receiving fair and reasonable profits. Mean Score 4.75

System I (Exploitative-Authoritative). Top management primarily uses an autocratic style, makes all the decisions, and relies on coercion as the primary motivating force.

System 2 (Benevolent-Authoritative). Higher management makes most of the decisions, although some minor implementing decisions may be made at lower levels. A condescending attitude is usually displayed in communicating with subordinates, which results in a subservient attitude towards superiors.

System 3 (Consultative). Although higher management still reserves the tasks of direction and control, ideas are at least solicited from lower levels. As a result, up-and-down communications are superior to those in Systems 1 and 2. Although there is very little cooperative teamwork, some specific operating decisions are made at lower levels.

System 4 (Participative Groups). Under System 4, higher management views its role as that of making sure the best decisions are made through a decentralized participative-group structure. These groups overlap and are coordinated by multiple memberships. There is a high degree of trust, which allows both superiors and subordinates to exercise greater control over the work situation.

CONCLUSION

Partnering and TQM are not in opposition; they are complimentary and reinforce one another. The success of external and internal partnering in developing teamwork makes this process the ideal vehicle for long-term and continuous TQM improvements. The significant variable in this process is leadership. Richard Lester, an expert on leadership, noted “what has recently been observed in quality-oriented organizations is that creative leadership emphasizing conceptual problem-solving and team-building foster cross-functionalism and guard against stovepipe activities.”14

NOTES

1. Interview with Paul Tucker, chief of construction of the Mobile District, Corps of Engineers, September 14,993.

2. Schermerhorn, Jr., John R. 1993. Management for Productivity, p. 483. New York: John Wiley and Sons.

3. Mondy, R. Wayne and Shane R. Premeaux. 1993. Management Concepts, Practices and Skills, 6th ed, p. 525. Boston: Allyn & Bacon.

4. Sashkin, Marshall and Kenneth J. Kiser. 1993. Total Quality Management to Work, p. 39. San Francisco: Bennet-Koehler Publishers.

5. Hillkirk, John. 1993. On Management. USA Today (October 25), p. 2B.

6. Bleakley, Fred R. 1993. Many Companies Try Management Fads, Only to See Them Flop. The Wall Street Journal (Tuesday, July 6).

7. Fuchsberg, Gilbert. 1993. Quality Programs Show Shoddy Results. The Wall Street Journal (Thursday, May 14).

8. Mosley, D. C., Jeanne Maes, Michelle Slagle, and Carl Moore. 1993. An Analysis and Evaluation of a Successful Partnering Project: The Bonneville Navigation Lock. Organization Development Journal (Spring), p. 65.

9. Notes from Workshop on Process Consultation conducted by Edgar Schein, Albert Einstein Institute, Cape Cod, August, 1991.

10. Partnering the Central Artery/Tunnel Manual. November 1993. Massachusetts Highway Department (Boston), p. 2.

11. Page, Steve. Partnering on the Central Artery/Tunnel Project: Changing the Way We Do Business. Accepted for publication by Design/Construction Quality Institute Forum.

12. Daniels, Roger. 1993. WINS and Partnering Working Together to Improve the Way We Do Business on the CA/T Unpublished paper.

13. Likert, Rensis. 1967. The Human Organization. New York: McGraw-Hill.

14. Lester, Richard. 1993. Creative Leadership for Total Quality. The Journal of Leadership Studies, vol. 1, no. 1 (Nov.), p. 144. ❑

MANAGEMENT APPLICATION AND PRACTICE III

The Central Artery/Tunnel Project

The above conclusion is being tested by the management, coordination and direction of the Central Artery/Tunnel Project in Boston. “It is the largest construction project of its kind in America today. The project features units of cut-and-cover tunnels, immersed tube tunnels, highway viaducts, long-span bridges, and dozens of ancillary structures such as vent buildings (each a multimillion-dollar job by itself). It has some of the most complex urban utility rearrangement and construction staging challenges ever dealt with on a highway job. There has never been anything like it, and there may never be again.”10

The management team of the Massachusetts Highway Department (MHD), the Federal Highway Administration (FHWA) and a joint venture of Bechtel/Parsons/Brinckerhoff are committed to utilizing both partnering and TQM. Internal partnering champions and facilitators are working with external facilitators, and the results are promising.

Partnering was initiated on the CA/Tin 1992. In over 17 months the number of partnerships have grown from two to eleven and in 1994 will reach over 20. Although it is too early to reach definitive conclusions, general trends indicate:

  • No litigation pending.
  • Resolved 70 percent of our contractors' proposals.
  • Reduced “posturing.”
  • Realized value engineering savings of $658,000, with $l.7 million pending.
  • From a safety standpoint, average workdays lost on contracts using partnering is half the industry average.

Most importantly, partnering has created well-organized teams with effective processes that allow TQM to be brought into play both internally and throughout CA/T The TQM initiative stimulated by successful partnering is called “Work Improvement Never Stops” (WINS). Roger Daniels, partnering champion for Bechtel/Parsons/Brinckerhoff, cites an example where an issue identified and resolved in a specific partnering workshop was the catalyst for a “WINS” effort for project-wide process improvement.12

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Carl C. Moore is professor of management and dean of the College of Business and Management Studies at the University of South Alabama. He received his undergraduate and Ph.D. degrees from the University of Alabama. Since 1975, he has conducted over 100 workshops for firms in the wood products and paper industries, and others.

Along with Dr. Mosley, he conducted the first “partnering” project for a large-scale government construction project. He has since been involved with partnering projects with the U.S. Corps of Engineers, U.S. Air Force, U.S. Navy and NASA. These projects represent over 1.5 billion in new construction.

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Donald C. Mosley is professor of management at the University of South Alabama and president of the Synergistic Consulting Group in Mobile. He is a graduate of Mississippi State University and has a master's degree from the University of Tennessee and a doctorate from the University of Alabama. Dr. Mosley is co-author of three management books, one of which has been adopted by over 200 colleges and universities and has co-authored articles on partnering in Organization Development Journal, National Productivity Review, Project Management Journal, and Organization Development Journal.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PMNETwork • September 1994

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