Business excellence in the United Arab Emirates through soft TQM

1 Introduction

Corporate enterprises worldwide are under tremendous pressure to improve their performance due to modern globalised economies and increasing competition [1]. These challenges encourage business organizations to develop new ways of managing performance in order to survive [2].

Performance traditionally defined in terms of financial results has been critiqued in the literature. Over the last several years there has been a shift in the paradigm from narrow financial performance measures to broader strategic performance measures [2]. Organizational performance is now driven by measures like customer satisfaction and employee morale emphasising increased focus on customers and employees. The customer focus and people focus are two core principles of the total quality management (TQM) Philosophy. Organizations around the globe use various TQM based frameworks such as national quality awards or business excellence frameworks to improve organizational performance [3].

The objective of this article is to highlight the practices of quality-award-champions based on soft factors of the TQM approach and to comprehend how those factors lead the organizations to peak performance. This article therefore seeks to address the following questions: 1) what are the soft factors of TQM that are visible in award leading organizations? 2) Is there evidence that these soft factors lead to higher organizational performance? 3) What are the different practices that managers seeking to embark on an excellence journey can adopt from these award-leading organizations?

This research consists of an in-depth case study of quality-award-champions in the United Arab Emirates. Case data and statistics were obtained from the Quality Award Office and examined to answer the stated research questions. The strategies and vital ideas related to the soft enablers of TQM obtained from the quality-award-champions are discussed and analysed. Practitioners in the relevant industry sectors will better comprehend the importance of soft TQM enablers and thus better identify opportunities for targeted improvement efforts. The results of this study would be useful for managers wanting to incorporate soft TQM enablers in their drive for organizational excellence.

2 Background

This section presents the background on high-performing organizations and their use of business excellence frameworks. The improvement of organizational performance is continuous journey. Traditionally, organizations performance measurement processes were consistent with a cost-accounting approach, which emphasized selective financial indicators such as profit and return on investment [4]. Today, organizational performance is measured in many ways. Some of these include financial results, employee moral end customer service/satisfaction.

Therefore, many components have been cited as contributing elements in high-performing organizations [1]. Pondering the concept of peak performance, management draws attention to notions such as motivation, collaboration, employee engagement, continuous process improvement, quality initiatives, and workforce harmony. Attaining the highest levels of performance is not an overnight effort [5]. Time is needed for whole-system transformation that includes changing culture, redesigning processes, and crafting solid information systems that support useful and robust measurement. Once this transformation is complete, appropriate measures of performance should consistently reflect improved outcomes.

High performing firms therefore have been associated with ‘quality’ mission statements defined by the choice of components [6]. Studies of high performing organizations also find that resources such as good infrastructure are crucial for sustained high performance [5]. Therefore peak performance requires managing many such organizational enablers.

Research of high-performing organizations identified six vital areas in which high-performers excel: people, processes, technology, metrics, communication, and culture [7]. Baldrige Award recipient companies for example have six identifiable differences including: need to drive continuous evolution, high focus on systems, low need for sole responsibility, high focus on learning from the past, high focus on information, and low tolerance for actions that are inconsistent with the values of the organization. Business excellence programs provide a useful approach to adopt many of the strategic elements necessary for the high performance that revolve around the total quality management (TQM) principles.

Leading organizations are characterized as having a good strategy, reviewing it periodically and having good learning within their organizations [8]. High-performing executives create an environment that helps people feel good about doing a good job. They help people follow what day-to-day activities are needed to get the job done; they provide frequent and honest feedback on how well the organization, team and individuals are doing; and they make sure people know they are appreciated [9]. These leaders exhibit captain-coach styles and are players on the field, showing captaincy skills and sharing the work [8]. They are available, egalitarian, supporting their people from close by, not setting difficult challenges from afar. The vast majority of these types of leaders come from within leading organizations and has been with the organization for nearly twice the industry average.

Learning indeed is the secret sauce for any high-performing organization. To create competitive advantages through people, an organization should focus on promoting the following aspects [10].

A belief in individual responsibility and autonomy and a strong sense of team collaboration;

High-performing companies recognize the importance of training and skill development [11] and their workforces are encouraged to develop their skills and trained to be resilient and flexible [12]. Leading organizations hire people who believe in their cause-those values and attitudes fit. People who do not fit are actively managed out of the organization quickly by a measurement system that balances performance with adherence to values [8]. Performance management therefore can deliver impressive results for return on equity, revenue growth, profitability and employee turnover [13]. More importantly, engaged employees equal high-performing organizations. Providing ongoing feedback and recognition of achievements to employees is also crucial for a healthy and satisfied workforce [14].

Business excellence, in its simplest sense, means doing things better and constantly improving staff, systems, processes, and organizations in a competitive environment. Business excellence frameworks have an important role in promoting and rewarding organizational excellence [15]. The first quality award introduced to reward organizations was the Deming Prize in Japan in 1951. Following this, the USA established the Malcolm Baldrige National Quality Award in 1987. The European Foundation for Quality Management (EFQM) was the next in line by establishing the European Quality Award (EQA) in 1991 which is now called the EFQM Excellence Model [16].

The Dubai Quality Award is based on the EFQM Excellence Model and it. It has been applied in both private and public sector organizations since 1992. The EFQM model comprises five enabler criteria: leadership; policy and strategy; people; management, resources and partnerships; and processes. It also comprises four results criteria: customer satisfaction, people satisfaction, impact on society and critical performance results.

Leadership concerns management’s behavior in driving the organizational towards excellence. Strategy and policy concerns how the organization formulates, commentates and deploys strategy and policy. Resource management concerns how the organization manages the critical resources such as information, technology and finance [16]. People management concerns management and deployment of people. Process concerns how the organization manages, evaluates and improves its critical processes to ensure quality output. Results concern the results achieved by the organization.

Leading companies have not just developed a distributed leadership capability [17]. They do more than just know their customers’ requirements. They drive to maximize customer value through their organizational activities. In order to do this effectively, they need to clearly understand why customers buy from them rather than from their competitors. They perceive that the vision, mission and values create a positive culture in the organization [18].

Effective leadership starts with the chief executive’s vision and develops into a strategy for deployment. It is further confirmed that top management should develop the following for effective leadership: clear beliefs and objectives in the form of a vision; clear and effective strategies and supporting plans; the critical success factors and core processes [19]. The appropriate management structure has certainly become a competitive advantage worldwide in recent decades [20]. The next section describes the methodology adopted in this study.

3 Methodology

The methodology comprises a study of winning-organization profiles presented to the Dubai Quality Award best practice sharing series. Firstly, data were gathered from the Department of Economic Development in Dubai. Secondly, data were registered in a MS Excel^® spreadsheet by categorizing them according to the description of organizational practice, company name, industrial sector, and DQA criteria. Thirdly, each enabler was analyzed with respect to its contents and noteworthiness. The following questions were developed to analyze the material:

What are the vital practices published by the Department of Economic Development?

4 Results

The twelve leading organizations studied were mostly representative of the finance, trade and retail sectors, while the education and free zone sectors were represented by one organization each. More than 80% of the organizations were also accredited in various quality improvement programs and had achieved other external recognition. The practices identified were mostly associated with customer focus, people management, process improvements and leadership as shown in Table 1.

Some of the identified organizational practices were categorized as exemplary as they served as prominent examples for other companies. These are summarized in Table 2.

Table 3 presents a summary of the unique organizational practices related to enablers. Each of the leading organizations exhibits a focus on number of quality principles which have been adopted into their organizations’ culture through various innovative strategies as shown in Table 1. All leading organizations achieved results in the most common areas that include profitability, revenues and increased sales or market share, customer satisfaction, employee satisfaction and employee engagement. The top 20 results that organizations achieved are tabulated in Table 3. All of the organizations achieved their financial results as well as benefits unique to their services or products (e.g. a free-zone organization).

Other notable results included the areas of customer satisfaction index and turnaround time, achieving 100% implementation of projects and waste reduction (in a supermarket firm). Leadership commitment was crucial in order to get the benefits of participating in the quality award process. Organizations have initiated regular employee surveys, leader development programs, and more systematic strategic and business planning. Leaders in the organizations were systematic in defining and following up goals both for individuals and for the whole organization. They have strong public responsibility and also have strong links with society.

Interestingly an organization has articulated the term CRM (Customer Relationship Management) as ‘Customer Really Matters’. Comprehending the customer requirements and monitoring the customer satisfaction is carried out by all organizations. Organizations follow in the steps of Deming and Juran to monitor and capture the customer requirements. There has been a great deal of technology investment to capture the customer requirements and analyze them appropriately. An organization from the hospitality sector for example, states that the more freedom that it gives to its employees to resolve guest issues on their own, the more they take personal ownership. To achieve such a mindset in an organization requires a shift in leadership style, a set of empowerment guidelines, and consistent communication/support.

Business excellence frameworks require the contribution of employees toward the achievement of the overall organizational success. There are employee recognition programs such as the CEO Excellence Award, Employee of the Year, etc., noted in these organizations. A finance sector organization believes that highly engaged employees create better business outputs, more loyal customers and better finical performance. It implemented a program called RACE (Reflex Amplify for Continuous Engagement) to engage and boost the morale of employees. This has resulted in employee motivation to improve individual performance and career progression.

Results are achieved in various ways. Initiatives like teamwork and cultural building in a bank helped in enhancing the business performance and staff productivity in a better manner. Their customer satisfaction scores improved from 95.5 to 98% in the year 2012. Employee satisfaction level rose consistently over 4 years to about 88% followed by career development of 24 employees over 4 years. By promoting a team culture, finance sector organizations put together a team that worked towards the award and received recognition without any external help. Their best practice is leadership style and cross-functional team.

A finance sector organization implemented an integrated management system to drive business excellence. Organizations have initiated centres or cells-like total quality and business excellence department or strategy management office giving importance to their quality drive. Leadership trait and leadership support has been explained as driving force behind the success of the organization. Leading organizations laud the support of top management for their success. Organizations agree that it is crucial to gain top management support when implementing a quality framework. Besides rolling out strategic plans and aligning the unit’s goals and objectives, these leaders are seen as supporting the initiative at multiple levels. It is agreed that safety, environment and community are contributing factors to business excellence.

5 Discussion

The leading organizations exhibit great emphasis on vision, mission, and core values. These organizations recognize the importance of communicating the company’s purpose and goals to its employees. Improved computer technology is used to serve the customers. Organizations have demonstrated innovative ways for customer care. Employees are regarded as making a vital difference when they are empowered, encouraged and authorized to make decisions for their result areas. For example, a finance sector organization states that it gained the excellence award due to the support and teamwork exhibited by its people.

The leading organizations were fairly representative of the trading, finance and retail sectors. Given the nature of these sectors, customer focus has remained at the forefront of improvement efforts. Leading organizations displayed customer focus outcomes such customer satisfaction, customer engagement and customer appreciation. Aspects such as customer relationship management and loyalty are visible. Organizations achieving high scores in award assessments are companies with the highest performance across a wide range of indicators, including financial results and productivity [18].

The findings published in the USA indicated significantly better financial performance of award-champions in comparison with other companies in the research [21]. The majority of the frameworks have emphasized customer focus. These frameworks have reported results in customer engagement, customer loyalty and customer satisfaction.

In addition to focusing on customers, award-champions focused on their workforce/employees. Innovative programs such as employee volunteer programs and engagement have created win-win situations linking customer satisfaction, workforce development and organizational growth. Another outstanding focus area has been leadership. It is strongly believed that top management support and leadership play a critical role in an excellence journey. Strategy, vision and planning are seen as of prime importance. Leadership development has been a focus in leading organizations.

The Dubai Quality Award (DQA) model was perceived by all organizations as a useful approach to quality improvement. So, the national quality awards play an important role in promoting and rewarding quality and business excellence [22]. Adopting the best practices of business excellence improves a nation’s competitiveness which leads to a global sustainable success [17]. By comparing itself to the benchmarks, a company can thus identify its weak points, priorities objectives of improvement, and then carry out analyses to determine the methods best suited for this improvement [23].

Benchmarking is part of total quality process and is a productivity improvement tool that has received considerable attention among companies. It helps organizations to achieve and maintain competitive advantages by striving for world-class performance [24]. Benchmarking presents an opportunity to optimize processes for maximizing the output value while minimizing the resources used [24]. Benchmarking these leading organizations thus provide insight into the various techniques that make them successful. So, a suitably adopted and/or adapted, the best identified practices can indeed generate for the company considerable profits of performance within a very short time [25].

The future TQM will also find more importance in how to align company-wide activities with customer focus [26]. QFD is a visual connective process that helps teams focus on the needs of the customers throughout the total development cycle [27]. In fact the popular filed of QFD’s applications is quality management that is an important part of the QFD process and essential for successful product development [28]. It provides the means for translating customer needs into appropriate technical requirements for each stage of a product/process development life-cycle. Moving forward marriage of two tools - QFD and benchmarking is synergistic in its import and vital to a company’s strategic and financial superiority. It would be interesting to study various for example benchmarking QFD applications or benchmarking process improvements [29] in UAE context as well.

The core values of customer orientation, committed leadership, and participation by all stakeholders, process orientation and continuous improvement were considered to be most strengthened due to the activities performed at the organizations. The organizations have developed different methodologies and tools in order to strengthen these five core values. This is in accordance with the findings of others who also found that the five previously mentioned core values had been mostly improved due to organizations having participated in quality award processes [30]. They regard self-assessment as vital for gap analysis and regard the assessment report as a valuable assessment to continuously improve their processes. The application of performance excellence frameworks assists organizations in maintaining their competitive advantage and long-term profitability [31].

Investing in excellence as a core of business strategy contributes to strong business performance [32] and guides the business strategy and continuous improvement in organizations [33]. In summary, it can be illustrated that TQM based quality awards and enablers play a role in peak performance as illustrated in the peak performance prism shown in Fig. 1.

6 Conclusion

The objective of this article is to identify the soft enablers of TQM that lead to peak performance in UAE organizations. This study has revealed that peak performance can be achieved through the implementation of business excellence frameworks which are fundamentally based on TQM principles. The study reports that leaders of organizations must show strong, long-term commitment to customer orientation, process orientation and continuous improvement.

There are a number of vital practices that organizations must foster for driving positive results. Such practices identified in this study include a focus on processes, involvement/empowerment of employees toward process improvement, and increased emphasis on customer desires and needs. While these findings are similar to other global studies of award-champions, this study has revealed that such practices are also relevant in the context of UAE organizations. This study also highlights how employee empowerment strategies are implemented in the UAE context sheds light on the soft factors that enable peak results for UAE organizations through its people.

Organizations are equipped to improve its performances through the business excellence models and people related factors such as communication, training and development, participation, empowerments must be enhanced. Organizations should aim at developing a human resources management strategy particularly building suitable motivation mechanism, facilitating employee learning in action, transforming their mind-sets, and enhancing quality culture that support the implementation of business excellence fundamentals. The study also indicated that trust and management support are significant factors that influence positive excellence culture among employees. Leadership has a responsibility to devise and direct the human resources related policies that will yield results in the direction of organizational excellence.

This study has taken into account only award champions. This research can be further enhanced by also including those UAE organizations that have implemented other types of business excellence models Broadening the research in this way would allow a more comprehensive comparison of various practices. This in turn would provide a stronger basis for developing the best framework for guiding the adaption of TQM’s soft factors in UAE organizations.