Customer focus in quality award models

The target for world class organizations is to satisfy customer expectations and needs by ensuring that business results and performance of the organization are best, better or at least as good as those of competitors. This can be done by ap-praising business results and their performance against the best of competition with benchmarking and using these results to improvements. (Prescott 1995:16) World class organizations are monitored by reference to measurable improve-ments in performances like productivity and customer satisfaction. Recognition for organizations applying successfully principles of Total Quality can be sought through quality awards like European Quality Award or Malcolm Baldridge Qual-ity Award. These qualQual-ity awards have transformed Total QualQual-ity from a nebulous set of various principles into a structured approach. (Prescott 1995: 20-21)

Self-assessment is a key element when using these quality awards as tools for quality improvements in the organization. Framework for self-assessment is an easy way to recognise strengths and improvement areas in the organization and based on this to improve the organization’s quality. (Laamanen 1995: 5)

Quality award models are based on the idea that for organization participating on competition, two assessments are to be done. Organization’s self-assessment is to be done on the application stage. In this stage organization is evaluating own per-formance according to criteria of the quality award model and then according to this evaluation and scoring final decision to go further in the process can be done.

European quality award criteria are usable for all businesses and can be used to improve performance. Focus in the award is to satisfy customer needs through continues improvements. (Prescott 1995: 172)

The most significant part of the criteria is customer results. Within this area it is estimated how information concerning customer is acquired. Also issues like how big the market share is and it is estimated how customer satisfaction and customer loyalty are developing. Furthermore, it is estimated how customer relations are maintained within organization and how all the factors mentioned above are de-veloped compared to competitors. (Suomen Laatuyhdistys 1995: 29)

Customer and market knowledge is estimated by information collected about how a company is evaluating present and future expectations of markets and custom-ers. At the same time, it is evaluated how a company will ensure that enough is done in strategic level development to find ways to explore customer needs.

(Suomen Laatuyhdistys 1995: 29)

Customer relationship management is focusing to evaluate how a company will manage customer contacts so efficiently that customer relations will improve and have more depth. At the same time it is also evaluated how information received in daily contacts would increase a company’s customer knowledge so much that the company could better identify future needs and expectations of its customers.

(Suomen Laatuyhdistys 1995: 30)

Definition of customer satisfaction is based on the evaluation of the level of cus-tomer satisfaction and loyalty compared to that of competitors. It is also evaluated how a company defines customer satisfaction and loyalty and how it is measured;

furthermore, improvement and evaluation of methods are also assessed. (Suomen Laatuyhdistys 1995: 31)

When customer satisfaction results are evaluated, information concerning dissat-isfaction is included. Estimation about the development of those results will be made. (Suomen Laatuyhdistys 1995: 32)

Customer satisfaction is measured against competitors, and how they have been developing together with market shares followed will be estimated. (Suomen Laatuyhdistys 1995: 32)

Customer satisfaction and its importance have increased over the years in quality awards, too. Customer satisfaction having become the most important criterion is due to the fact that almost all strategic decisions are based on customer knowl-edge and customer data. Identifying customers and their needs is an essential step in measuring customer satisfaction. To identify these needs, information should be gathered from the organization, processes as well as from the services and products. Quality awards focus on these aspects in their evaluations. (Lecklin 1997: 324)

Customer satisfaction is rarely the main goal of organizations. It is a question of how customer satisfaction is affecting the organization and often affects the achievement of an organisation’s financial goals. (Laamanen 1998: 54)

In the beginning, quality awards focused on product and product quality. As the quality definition has broadened, also quality awards and criteria have been

broadened to cover all areas of organization, and the importance of quality awards has been increasing. (Lecklin 1997: 325)

Quality awards can be considered as part of the philosophy of total quality man-agement where features of total quality manman-agement within organization are re-warded (Lumijärvi & Jylhäsaari 2000: 99).

According to the research done on the effectiveness of the quality award function, it has been indicated that quality award is an effective and systematic tool for quality improvement. Internal reasons within organization were considered a more important reason to start quality improvement actions than external reasons.

(Virtanen et al 2002: 89)

Still, when quality award criteria are in use, there may be a danger that they be-come useless in a way that every organization will take the criteria in use because

“every organization uses them”, and this way the criteria are not becoming part of the innovative development of the organization. The risk is that quality awards will become a tool for consultants and quality experts teaching directors and man-agers to pay attention to quality issues. Another issue is that organizations may quite easily start chasing points in order to get the quality award, not as a tool for developing organization with the use of the quality award perspective. (Silen 1998: 20-21)

In quality award models, customer orientation is divided into two main themes:

knowledge of markets and customers, managing customer relationships and tomer satisfaction. The target is to collect information from the markets and cus-tomers by using this information when planning products and services to fulfil customer needs. Quality awards are focusing on these factors in the areas pre-sented in Table 1. (Kontio 2000: 115)

In quality award criteria will be changes annually and for example in Finland, quality award criteria was changed to be based on European quality award crite-ria. This was done to increase internationally comparability of the assessments and create wider quality development in Europe. (Silvennoinen & Michelsen: 14-15)

Even the changes in criteria and development of the models are continuous the main themes related to customer and customer satisfaction are unchanged.

Table 1. Customer orientation in quality awards (Kontio 2000: 115).

MODEL CRITERIA

MB 3. Customer and market focus

SLP 3.Customer and market orientation

EFQM 5. Processes

*5e Customer relationships are managed and enhanced

*2a Policy and strategy are based on the present and future needs and expectations of stake-holders