of the Case Study 1 om» TQM in BT Retail a = Company background melon’ fteated in 1981 when the telecommunications arm of the British Post Office was Operate) gh & Separate entity in preparation for privatization in oot ince then BT has cperted ait one of the most open telecomunicntions marke ae the world. BT faces peteegtion Within the UK for local services from cable Ty companies, while other operntie, CPerators vie for its long haul national and internationea traffic, BIs day-to-day mca ’ns ate subject to regulation by OFTEL, a governement appointed regulatory body ithich has major impact on key aspects of BTs busiece tre example, in a number of key markets BT is required to keep price increases significantly below the level of retail price inilaton. BTs very survival has depended on succee Performance in this highly SKmpetitive yet tightly regulated environment, Following privatization BT faced thy paberative of transforming itself from bureaucratic monopoly to customer-centric service Frovider, while growing income, reducing costs andl minimizing loss of market share. {nereasing competition in its UK home ‘eaves encouraged BT to embark on a major quemational expansion program in the 1990s by developing a family of overseas joint Ventures and alliances. {n 2000 after a decade of international expansion, BT decided to refocus on the UK and Europe and carried out a major corporate Teorganization which resulted in the formation usin cTOUP and the demerger of mobile (MO2) med at directory publishing (Yell) businesses. The BT Group consists of BT Wholesale, responsible for BT's telecomunieations meutork, BT Retail, providing communica to 21 million UK Tanential and business customers, BT Ignite, delivering sophisticated IT solutions for large businesses across Europe, and BT Openworld, specializing in the internet mass marketLN LE WE 454 Total Quality Mana @ BT and quality - a brief history As BT emerged from the public sector it was realized that to be successful, a significant cultural change would have to be stimulated and managed within the organization. Accordingly in 1936 BT. embraced enthusiastically the philosophy of total quality management (TQM) to drive continuous improvement through a focus on customer requirements, team working and problem solving. Led personally by the chairman, TOM was implemented through a series of workshops involving all managers and thei At the same time BT launched the BT Values to define the desired culture of the organization, Despite many organizational changes the five BT Values remain unaltered and continue to guide behaviors within the company. The BT Values are We put our customers first We are professional We respect each ather We work as one team. We are committed to continuous improvement ement by objectives climate and this was refined in 1995 ard approach to translate BT’s strategy into with the adoption of a balanced corporate detion through a set of key objectives, measures and targets. Underpinning all of BT's | operations is BT's management system, First registered to ISO 9001 in 1994, this is one oF the jstrations in the world. The management system was later ount of environmental and people management standards largest single corporate-wide refined and improved to take and BT is also registered to ISO 14001 and accredited as an Investor in People (iP), Achievement of [SO 9001 registration was not seen as an end in itself and after consicl the Malcolm Baldrige National Quality Award framework, BT adopted the EFQM Business Excellence Model as a driver of organizational improvement. Since 1995 many BT business \e Business Excellence Model to identify strengths and areas for units have us improvement as input to their business planning process. The extensive use of sel: assessment against the Business Excellence Model has ensured that BT has a rigorous and stru approach to organizational improvement. That this approach was effective is demonst al and international quality awards in the late 1990s, BT's Yellow Pages, National Business Communications and Northern Ireland units all won the British Quality Award. BT Northern Ireland won European quality prizes in 1998 and 1999 with Yellow Pages winning the European Quality Award in 1999, Following Yellow Pages’ success BT ceased! entering external quality awards; however, business excellence principles remain in everyday use, particularly for the periodic nance known in BT as health checks. id by the success of BT business units in natio comprehensive reviews of business unit perio @ The relaunch of quality in BT Retail est unit in BT Group with almost 60000 the UK Formed in October 2000, BT Retail is the la employees. Its role is to provide communications solutions to 21 million customers in tcant tion, ality OM tion. re to 1995 into BT's oF the later jards s for sel 3and salty and sality vands; eregcgmstimers to the largest businesses and its vision Completely’. BT Retal’s frst CEO, Pierre Danon, poset {0 quality improvement that stemmed from his exp riences at a previous European Quality Award winner, Xerox Europe. Pierre and a nen leadership team were building a ‘new customer centric distribution business with a remit to ‘deli uuperb experience to a hug hecessity of taking a quality approach to Beals. It was also acknowledged that the changes that took place in 1999 and the early part of 2000 had inevitably meant that many people in BT R mitment emer base’. They recognized the benefits an uipport achievement oi f some very challenging major business and organizational tail had not been focusing on quality quite giao wan cats Within a few months of BT Retail's inception th Revitalizing vality program was launched to drive an unremitting focus os improvement, Th drive and commitment of the CEO and suceess of this quality program the leadership team has been pivotal in drivin, The approach to “Revitalizing Quality’ is based on seve Steps to ‘real’ quality put customers at the heart of what we d reduce the cost of failure; develop and deploy strategy. get the basics right - quality for everyone: quality approach to major change: get the workforce involved; ‘ brief summary of how each of these steps has been approached is described below Put customers at the heart of what we do_ All quality programs have to have, at thei ir center, a very clear focus on customers. Delivering customer satisfaction is the primary goal for BY R rently simple — listen to c hoes nethods for listening to their customers, rangin thousancls of customers detailed questions about hey Wit BT. From this data BT Retail has built quantitat Satisfaction (Figure C1.1) which enable ther with what customers really want tail and the approach is ustomers and respond to what they say. BT Retail has a wide g from market research to asking w they felt about a specific transaction five models of the drivers of customer m to ensure that in nal measures are aligned peas ajor shift in appronch macle early inthe life of BY Retail managers were targeted (and bonused ally customer satisfaction Fevenue bei wanagers. Now, everyone who deals with agers pats customer satisfaction target, normally Gath tho me importance as financial ‘argets. BT Retail also changed their primary customer satisfaction measure from ‘overall sats eitisfaction compared with competitors’ so that benchmarking ec ba ilt in to this key measure ‘ to change which senior st a customer satisfaction measure. Tradition- had been the responsit bility of the customer service manager with ing the responsibility of the channel Programs ye is fundamental shift in measurement methodol infroduced to enable process and system impr gy a numbe of strategie change ‘ovement. In addition there was-eors | ® complains, provision ‘INFORMATION * Bling satisiaction * Satisacton with payphones ' Satisfaction wih call tana Satisfaction with DO Products [i and service R COVERAGE 1D PROVEN RECALL IMAGE Tast Image! Rolible cervice reputation — Holp gat most out of comms | ~Gnee out customer need b ~Givan choice, company prefer to buy from = COSTIS HIGH Loca, long distanes, international = Rental charges 1 RESELLERS - awareness and use E | Faye C11 Teaver csome st ; ' : i i faction © increase in focus on the behavior: that support customers having a great experience with BT. BT Retail have introduced ‘10 Golden Rules for Customer Satisfaction and developed new approaches to recruiting, training everythin ind coachin ned and focused people to ensure that that delivers customer satisfaction is ali Reduce the cost of failure One of BT Retails strategic objectives has been to reduce the cost of failure in thei operations. This delivers three benefits, itis good for customers as they experience foea great sfaction ure that n their ihings going wrong, itis good for B People as they do not have to deal th the hassle of nd it saves BT money. in 2001/06 BT Retail saved SPESIC cost of failure reduction prog Fixing problem, mney om grate the Fedction of cost of failure is ba: on clear analysis of where BT "Ply Pre glts things wrong or fixing tf 8 that have gone wrong. Howerce this often RRR highlights those operations and processes that are. ma whe ging. failure © failure occurred, effort wae wont? Properly establishing the root Sause of the failure, For example, BT Finck sometimes find that they cane the right mets Premises to carry our meee this can Be caused by call cents he right details when taking the initial customer orien velop and deploy strategy Tug improvement is embecided in BT Retail’s strategy. BT Retail’ 5 ategic goals are to ene ar Customers, motivate our pony ws nctease shareholder value’ Thee: being achieved By Setting seven very cle® omni ac bRetives for: improving he customer ucving operational excellence sen ng Vs The ae eating new revenue sma Creating the The leadership team has placed considerable emphasic on ‘nd objectives to both employees anche’ ity: throne: optimizing transaction ex nomics; the cost of failure; defend Place to work for our employ communication of the strate is deployed heir 0 key mechanisms. All senior managers have a balanced these ceethich reflects their key objeyieee and all man, these scorecards, BT Retail saclished a clear sot of key chang’ Programs whi frives the major change required to deliver BT's longer-term strat, ic objectives. Delivery key pr or Scorecards and the benefits fae Programs form an integral part of the budget process, Bets have objectives aligned to Te Toney 80 included in senior man Get the basics right — quality for everyone Ze emphasis on quality i now on how BT Retail comp megble are encouraged to parts the Revitalizing Quality wegen 24 there is no company as nee? dip’ taining, Quality sinter h other stabi ror ant &8: key strategic propraine Sanition, management training wee veg ateY not seen aa schon SE cranes ageMENt by fact isin ewe at all \scsions are based on the releren i.e rather than on instinct or ‘gue ook woble Work, not on unthinking ail Quality Charter, exPiaining key aspects of quality has b issued to the entire ong HE and supported be sme pS COmMUNIcatiON. The basic ‘ality improvement tools ranihy BT since the original TON} ace Paign launch have been reviewed ‘ated to provide an increased process root Cause analysis, Computer, based training ® Pasic tools plus statistics! Process control and an advan, all employees via BT's intranes "d quality tool set are i iding ited commitment to TOM, the Br Retail leadership team has SOURSSinEPnnaplestopnce he Br ls eal ‘ailemployeesW358. Total Ovaiity Management Known as the ‘BT Retail Way’ these six simple principles are intended to capture the spirit of BT Retail and help guide the company in the twenty-tirst century. The BT Retail Way Customers are at our heart ~ we must listen to the customer We aim high - we want to be the best, not simply ‘good enough Our goals ate clear ~ based on facts not anecdote We deliver - accountability not excuses. We are one team - engage not tell We tackle issues ~ honestly but sensitively | | Quality approach to major change eee = A highlight of am in BT Retail has been the development of the Performance Accelerator’ ‘a clear systematic ten step framework for complex change management (Figure C1.2). Developed specifically for BT R 1g on BT's supports this by integrating elements of other proven effective change methodologies such as six sigma. A suite of quality tools underpins each of the ten steps ail, Performance Accel ep understanding of business excellence and 1 unique methodology drawit Figure 1.2rit oF of the change The ten steps requirea high degree igor with a clear, fact-bas takes account of customer, business and benchmarks) in defining its goals. A comp The approach is us proach that ensts employ ws (together with required Involving the workforce \t local operational level er day-to-day probl the business, to can work comes ployees are encouraged to be innovati and put forward reasoned id nprove elements of BT Retail in their approach to s based on their own insight o S operations. One simple example o from the conferencing team in BT Retail. A oro che issues that are stimulat in a forum called the ‘customer listenin I by day-to-day contact with customers a reed. In the last year, this team initiated post’, Ideas and discussed and then anging from product 72 improvements ts to training in recently launched products, mber of approaches have been in re fully Hee and development of major change. For example, a program whith 2 transforming call-center operations successfully in roduced to ensure that emplo: volved about 1500 people in the des roneares ay abut was combined with data from customers and itera! net mance measures to produce a design that reflected the vie WS of all key stakeholde BT Retail places a high value on involvement and experience aggests that it has to be pene at in a Way that meets local requirements. An organization af 34 000 people can benefit vely from involvement of its people, but that amb, of people also represen ama 'ge in continually maintaining Innovation BT Retail places a high v business regarded b Nn product and process ‘aditional and conservative, r ation. To support this, in a was developed in 2001. At a strat been introduced to focus on del setailed innovation. strat approach include am Specifically focused with the sen stimulus, level a number of vering an innovative strategy, These broader involvement of people in workshops Proposals together developm: coming up with innovative business and proces ment team investing more time A Corporate V "apidly develo dificule unit has also been formed to generate, select hroughout BT Retail. The Venturing unit oping innovations that provide new revenue oy and divert id exploit radtic delivers significant value by }pportunities but which would be Je eaaitream units to evolve, Init ist yea the venturing approach remnatsdover si new businesses each of which hac ee to generate significant