An internal guarantee is a commitment by one part of an organization to another to deliver its product or service to the complete satisfaction of the internal customer. If it fails to do so, it will incur a meaningful penalty, monetary or otherwise. Moreover, it is the employees involved--not management--who devise the commitment. The result? A spirit of partnership develops between different parts of the organization, and an environment of blameless error takes hold in which employees are rewarded, not punished, for identifying problems instead of sweeping them under the rug. In developing a guarantee, a department must first identify its mission in the organization. This leads to the second step: the ability to state exactly who its internal customers are. Third, the department should identify what its internal customers need. Fourth, drawing on their input, the department should design a guarantee that reflects those needs. Finally, those involved must decide on a penalty that is meaningful to the internal customer as well as to the supplier.
Service companies often cannot prevent mistakes, but they can learn to recover from them and thereby retain an unhappy customer. Recovery begins by identifying the problem, then acting quickly to correct it. Most important, service companies should give front-line employees the authority and responsibility to do what is necessary to correct a service mistake, even if it means deviating from the rules.
The Malcolm Baldrige National Quality Award requires firms to submit applications that conform to a rigorous quality-assessment system. This case consists of several parts of a service company's 1988 Baldrige application together with material from the Malcolm Baldrige National Quality Award Examiner Application Scorebook. Students learn how the Baldrige Quality Assessment System is designed and how to score an actual application, yielding insights about how to organize and manage a company's quality-improvement efforts.
Discusses a large overnight express company, which guarantees its service, and which has created a major headache for one of its customers. The problem exposes deficiencies in its service and in the guarantee it has advertised heavily. A formal complaint is made to the CEO. From the CEO's perspective, students must confront a variety of issues related to the problem.
Florida Power and Light (FPL) has developed a widely acclaimed quality improvement program (QIP). This exercise leads the students through the process that a division of FPL utilized in an attempt to "improve service." Specifically, the process requires students to define "better service" in terms applicable to the utility company, determine the causes of less than perfect service, choose what causes to attack, generate a list of potential solutions, and determine a plan of action. Students employ a variety of frameworks and statistical tools to complete each step of the process. Provides a good understanding of the QIP that is attributed with taking this utility company from a state of near-crises to a highly respected operation, and that has served as a model for many other successful domestic QIP's. Designed to introduce students to the process and prepare them for class. A rewritten version of an earlier case by the same authors.
Designed to be used as an in-class handout after Florida Power Light Quality Improvement (QI) Story Exercise (A). A rewritten version of an earlier case by the same authors.
Explores the issue of measuring and improving service quality and productivity by examining the radically different approaches of Northern Telecom and United Parcel Service.
Most fears about guaranteeing service are groundless. But offering a weak guarantee won't lead to success. The best guarantee is unconditional, meaningful, and easy to understand, invoke, and collect. Properly implemented, a strong guarantee boosts performance; sets clear-cut, customer-defined goals; creates a customer-oriented work force; and generates error data needed for improvement. A strong service guarantee can also boost marketing. It leads to more satisfied customers who generate higher sales and profits. McKinsey Award Winner.
Describes a major electric utility's highly successful effort to institute a comprehensive quality improvement program throughout the organization. Designed to be used in a comparative analysis of the quality improvement effort described in Paul Revere Insurance Co. (A). Students learn that there is no one "right way" to build the concept of defect-prevention into an organization (as espoused by such quality experts as Deming, Juran, and Crosby). Rather, the design and implementation of a quality improvement strategy need to be tailored to such variables as the nature of demand for an organization's service, its service-delivery process, corporate culture, organizational climate, financial performance, industry structure and trends, and competing demands for organizational attention. Important topics dealt with are program implementation, problem-solving methodology/philosophical roots, rewards and recognition, measuring results, maintaining momentum, and limitations/problems.
Caruso's Pizza is a small, entrepreneurial restaurant chain. The case considers expansion of an experimental pizza delivery system ("express delivery") that involves a major process innovation--producing pizzas to inventory rather than to order. The system promises faster delivery of higher quality pizza, but as yet is an unproven technology. By the end of the case, students will realize that delivery-only units and high order volume are required to make express delivery viable. One way of achieving this high order volume may be a one-phone-number system--a new computerized technology.
Describes a program of value-analysis workshops undertaken by this company as part of its massive effort to regain the number one position in its industry. The value-analysis workshops are the second half of the company's two-part Quality Has Value process. The focus is on: 1) the general question of how to apply value analysis, an industrial-engineering based tool, to white-collar work, and 2) how to handle some very sensitive issues that came out of the value-analysis workshop for a particular department.
Highlights the issue of high employee turnover in a multi-site, international subsidiary of a large resort company. Also described are service-quality problems the company has because the amount of value added through employee interaction with customers is high. Analysis of recruiting and hiring as a process flow is required to analyze the situation. There is also a cross-cultural issue due to a structural imbalance in the ratio of non-American (primarily French) managers to American managers.
The rapidly growing American subsidiary of an international resort company seeks to identify the factors underlying its success. The case describes the forces that shape the industry's structure, raising the issue of where it is possible for Club Med to establish a sustainable competitive advantage. Classic sources of competitive advantage are dealt with, leading to the role of corporate culture in creating a sustainable competitive advantage. The case also focuses on service quality from the standpoint of customer dissatisfaction and its associated costs.
The Paul Revere Insurance Co. lost its number one position in disability insurance, its main product, and formulated a strategy to regain the lead through a comprehensive quality improvement effort. The case describes the forces influencing the strategic direction of this effort, its structure, and its process over a two-and-a-half-year period. Many issues are raised regarding the design of quality improvement efforts, their implementation, and the continual efforts that must be devoted to them if they are to be an ongoing process. Situation-specific factors relating to this case are explored to determine to what extent this company's method can be duplicated by other service firms. May be used in a comparative analysis of the quality improvement analysis described in Florida Power & Light's Quality Improvement Program.
New competition has led to doubts about Singapore Airlines' excellent reputation for in-flight services. The key to maintaining or improving service is the attitude and proficiency of the cabin crews. The company now discovers that there may be problems in this group. This is a rewritten version of earlier cases by D.D. Wyckoff.