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Gillette’s Total Quality Management System Case Study


Introduction

Gillette began its global operations in 1905 when it opened a manufacturing plant in Germany. This global strategy and success saw the firm extending its operation to Latin America. Argentina was a potential market after tariffs and business policies were revised. Having operated under unfavorable regime, the firm perceived future competition and decided to create competitive advantages.

Key figures in the firm such as Carlos Rotundo and Jorge Micozzi suggested better quality as the solution to the market issues. The management had to change the organizational culture which was not strategic for the future market circumstances. Rotundo had already began creating a new organizational culture when Micozzin came up with the idea of total quality management (TQM) that made Gillette Argentina the most successful affiliate in Latin America.

Due to the great success of Gillette’s TQM system, this research was commenced to do a case study on “quality at Gillette Argentina”. The paper begins by evaluating the ways in which the firm got its employees to take on the new TQM system. It proceeds to discuss the importance of getting the teams involved in TQM process as well as identifying the ways in which the teams improved the process.

The paper also explains the meaning of the phrase “Beyond the hanging fruits, the most important outcome of this effort was a different way of working with sales” and highlights how Gillette changed the way it looks at its customers. Finally, there is a description of the working culture before and after the implementation of TQM as well as the economic benefits of the system.

Gillette gets employees to take on the new system

In a firm where decision making is solely the responsibility of leaders such that the employees have to act as the subjects to them, it is likely that the employees would not readily accept the adoption of total quality management (TQM). This is because TQM requires them to take elevated roles, become self-dependent and consider themselves as the owners of the firm.

It is apparent that Gillette had earlier managed its activities in a manner that left the managerial roles such as decision making and steering initiatives exclusively to the leaders. Therefore, the effort to adopt TQM compelled leaders to take measures that would prepare the employees better for the change. These measures involved several initiatives especially triggered by several key figures in the firm.

The very first initiative Gillette took was to hire the Organizational Dynamics Inc (ODI) as a consulting and training firm. The firm became the key source of information and motivation for the Gillette Latin America management. It can be argued that the source of a successful organizational change begins with leaders who in turn transfer it to employees.

This means that the employees would rarely have accepted an initiative that their leaders did not support appropriately. The consulting firm played a central role in preaching the benefits of TQM to the leaders. Indeed, the firm reinforced the idea Rotundo had already started to instill in Argentina. Organizational Dynamics Inc. developed the quality initiative and recommended the creation of a quality structure.

Secondly, Gillette offered training to the employees as a way of preparing them for TQM system. One of the landmark training was FADE that prepared employees for quality action teams. The specialized training involved four phases of problem solving: focus, analyze, develop and execute.

The focus phase was concerned with the development of a problem statement; the analyze phase dealt with the use of data to understand the magnitude of the problem; the develop phase involved the determination of a solution and implementation plan; and the execute phase was about implementing the plan and measuring its impact. In addition to FADE training, the employees received training in seven basic quality tools as well as brainstorming, force field analysis and cost benefit analysis.

Furthermore, training was extended to management and leadership levels. The Argentine directors, managers and other officials were trained by ODI as trainers of the rest of the organization. The teams were allocated facilitators who received training on leadership development.

Team leaders were trained in areas relating to group dynamics, effective meetings, leadership skills and group conflicts (Donnellon & Engelkemeyer, 1999). As a matter of fact, training was the backbone of the TQM process. Most of the members who got training became experts in their respective areas and eventually steered the process towards success.

Another way that Gillette used to prepared employees for the TQM process was through workshops. Through the leadership of Walker, workshops were conducted with all employees to inform them about the changes that would take place. The staff got information about the new working style and culture to be attained through TQM.

Team sponsors were identified and their roles explained to the staff. They were to support the teams in any way needed including helping them to attain their objectives with recognition of their empowerment. Other workshops that Walker would offer involved problem-solving and statistical analysis, and at the same time inspiring everyone.

Finally, Gillette endeavored to meet the challenges of quality that the employees faced. Initially, Rotundo responded quickly to the employee complaints about the contract approach by delegating responsibility to investigate them to Victor Walker. The newly hired quality manager emerged to be a successful preparer of the team members and organizer of TQM process.

Through his stewardship, teams were guided in their TQM process by sponsors and ODI methodology. In addition, a steering committee was formed in an effort to respond to quality challenges.

The council systematically supported the employees towards TQM process and formed the backbone in the creation of a new working culture. Through such support, the employees were assured of the leaders’ commitment to the process and ultimately embarked on the mission whole-heartedly.

Involving teams in the TQM process

Team involvement was paramount for the success of Gillette TQM process. The initiative was adopted by the firm in an effort to enhance overall performance and position better in the Argentine market. As Jorge Micozzi observed, the market was opening and thus the firm perceived the entry of new competitors from United States and Europe (Donnellon & Engelkemeyer, 1999).

In that respect, team involvement was important to create a competitive advantage. This would allow for creativity and emergence of new ideas as the team members presented diverse suggestions. There was need to improve decisions and processes ahead of competition trough team work. Therefore, the new competitive advantage was to assist Gillette to compete and keep their market share.

Team involvement was important in consolidating individual interests with the interest of the company as a whole. Before the implementation of TQM, the employees pursued their interests with no chance for a broader perspective on the organizational goals and objectives. This working culture was not particularly strategic for the creation of customer value through quality services. Therefore, team involvement was a way of changing this individualistic culture as well as the focus of the workforce towards goal attainment.

Organizational Dynamics Inc which was hired to develop the quality initiative recommended the creation of teams. With the success history of the firm in Mexico, it was very important for Gillette to abide with this recommendation.

Team involvement was the only way to achieve the quality structure suggested by ODI. In addition, the basis of TQM being total participation, customer focus, systematic support and continuous improvement relied completely on team involvement for success.

Team involvement was important in enriching business ideas within Gillette. It can be argued that when employees are offered the chance to contribute to decision-making process, more and better ideas are achieved. Indeed, individuals are challenged to bring new ideas and suggestions when they are members of a team.

The individualistic working culture which existed prior to implementation of TQM process was a huge obstacle to the generation of new ideas. Decisions were entirely made by the top leaders who had little knowledge about the challenges at the operation level. Therefore, team involvement as Walker observed was a way of creating a conduit through which ideas would flow up and down the hierarchical structure.

The other importance of involving teams was to eliminate departmental barriers that the previous system had created. As a manufacturing firm, Gillette had denied employees the necessary interaction between departments. Rarely could the design team interact with the production team or the assembly team which gave in to low quality products and wastage of materials.

As much as the implementation of TQM process was to succeeds, so was the effort to involve teams. This involvement of diverse teams gave the need to understand what other departments did and how they were related to each other. Therefore, for the success of the TQM processes, interaction and coordination among departments was very crucial.

Team involvement in the TQM process was also important in improving customer satisfaction. Although it was more relevant to the sales team, it permeated through all other teams. The sales team had the direct contact with the customer and when involved in the TQM process could offer the needed feedbacks to the rest.

The other teams chipped in when responding to these feedbacks especially those which related to product offered. The involvement of these teams enabled Gillette to meet customer expectations and ultimately increase their satisfaction. Moreover, the increased strength and commitment of the sales team made the customers to feel more satisfied when transacting with the team members.

The TQM process at Gillette was greatly improved by teamwork. It enabled the management to identify and meet challenges of quality. Team involvement increased employee participation in which they launched their complaints. For instance, the assignment of Victor Walker who emerged to be the cornerstone in the processes was triggered by complaints from the employees (Donnellon & Engelkemeyer, 1999). In addition, team involvement allowed the steering committee to turn to TQM problems that barred the success of such programs.

Team involvement also allowed for the creation of the necessary working culture. As the team members increased their participation, new ideas emerged and departmental coordination became a reality. The roles of team leaders and members were defined and the members focused more on the organizational goals and objectives. Autonomy and efficiency increased such that each employee became a significant contributor to the success of the process.

Team involvement in the TQM actually speeded up the implementation. The firm was able to make quick, but effective decisions on how to go about implementing the components of the process. The process that had earlier faced challenges picked up as the teams increased their participation. Micozzi offers the success example of the administrative building (Donnellon & Engelkemeyer, 1999).

The building was designed and built in ten months by nine teams. Therefore, it can be argued that team involvement was the key factor that contributed to the success of TQM process within such a short time.

“Beyond the hanging fruits, the most important outcome of this effort was a different way of working with sales”

This statement was coined by Rotundo when he moved to interface sales with cross-functional teams after succeeding in managing inventories. According to him, customer focus was more important than anything in Gillette. After all, the manufacturing operations undertaken by the firm were determined by its capacity to make sustainable sales.

He likened other achievements of the effort to hanging fruits pointing sales focus as the most important attainment. The sales focus Rotundo had in mind was that of changing the way Gillette looked at its customers. This change was that which responded to the needs of the customers despite their nature or demands. It was a change that the firm could make while looking at things from the perspective of a customer and responding to customer demands without question.

Actually, the quality effort had to be focused on the enhancement of customer satisfaction. According to Daft, Murphy and Willmott (2010), customer is the most crucial stakeholder of an organization as he defines the reason for its existence and eventual success. Other achievements could be important, but lie far below the capacity to drive sales (hanging fruits).

As Rotundo highlights, this driving force could only be achieved by changing the way the firm worked with sales. The fact that customer needs could be clearly understood, the quality management program necessary would automatically be defined. The changed perspective about the customer would actually allow the customer needs to act as the roadmap towards continuous improvement of the quality management practices. Therefore, in spite of the achievement made by quality effort, the influence it could have on sales was paramount.

In response to the call made by Rotundo, Gillette completely changed the way it looked at its customers. First, customer satisfaction became the main purpose of TQM process as Micozzi noted (Donnellon & Engelkemeyer, 1999).

The teams were encouraged to align their goals with the corporate goals in order to drive sales. Starting from the design department to production department to sales department, all teams were involved in TQM process with a focus on their contribution towards customer satisfaction. In fact, the continuous improvement component of the TQM process involved responses to the changing needs of the customers. This is confirmed in the various team projects undertaken in the implementation of the process.

Gillette Argentina also changed the way it looked at the customers by having a special focus on the sales department. The sales teams were encouraged to be more proficient in working together and increase their efficiency to make customers more satisfied. The emphasis on customer needs was real and made the sales team more compelling.

As the local sales manager observed, the emphasis on sales department made people to like working with the team as they learned about the entire firm, gaining a global perspective (Donnellon & Engelkemeyer, 1999). Nonetheless, Gillette conducted continuous survey on customer satisfaction to ensure that the teams were delivering the expected results.

Immediately the teams were formed, the firm conducted customer surveys and customer critiques were assigned to each group. The success was clear-cut in these surveys suggesting the complete change of the firm’s way of looking at the customer.

The working culture

Initially, Gillette’s organizational culture was characterized by individualism in which there were leaders and subjects to lead. Apparently, the employees got orders from above and had to act upon them without question. Decisions were solely made by the management without any input from the lower ranks.

Each department was assigned to specifically defined roles that were only approved by the management. There were few linkages to other departments with no interaction between departmental employees. Coordination between the departments was the role of managers whereby they advised rather than discussing on the work-related issues.

The employees focused on completing tasks rather than meeting goals and objectives. It can be argued that customer focus was not a crucial factor when working in the company. Workers pursued their interest and the interest of the company had little relevance when performing the assigned tasks.

Even before the implementation of TQM process, Carlos Rotundo had attempted to change the existing working culture. He introduced a quality-focused culture that supported team work with special emphasis on sales. The culture assigned many of the responsibilities to team leaders, but did not give individual employees much autonomy. Clearly, leaders made many of the decisions without any contribution coming from team members.

Each team pursued a specific task that was defined by the customer’s critique identified in the customer survey. Also, the management was responsible for most of the decisions that were beyond teams’ jurisdiction. Departmental interaction was not supported by this culture which ended prematurely after the introduction of TQM process.

The working culture that emerged from the adoption of TQM process was characterized by team work. Each activity that was accomplished in the firm including product design, development, production and offering was the cumulative efforts of individual teams. The team formation involved both the employees and the management. As a result, decision-making at department level as well as corporate level involved all team members.

The culture allowed each employee to contribute to any undertaking of the firm regardless of the source department. The ultimate goal in the new culture was customer satisfaction and all teams endeavored to achieve this goal.

Therefore, working to achieve this goal was the “sign post” of teams’ activities and leaders were not there to give orders but to discuss issues with members. In fact, Rotundo acknowledged that the new culture did not allow for orders, but consensus whereby the management listened to others’ problems and worked jointly to solve them.

The new culture was a supportive culture where tasks were shared among teams as well as team members. Individual employees became more responsible and industrious as they perceived assistance from other members. There was new confidence in their decisions and satisfaction in the tasks completed, especially when they were acknowledged with gifts.

The support formed a platform for knowledge creation and acquisition by the employees due to the focus on identifying problems and solving them. The cooperative working culture gave way to efficiency in the services offered to customers. Employees were willing more than ever to launch their complaints which allowed the managing team to act upon them on time. Thus, the working culture gave room for continuous improvement of the TQM process and eventually improvement on services offered to customers.

The TQM process implemented by Gillette had great tangible and intangible benefits. Perhaps, the economic benefits that came about due to improved performance and wastage elimination are most important. The high performance resulted from increased customer satisfaction which by 1994, the firm topped the list with 8 on a ten-point scale.

The higher economic performance could also have stemmed from the creativity and innovativeness of the firm as the team members acquired new knowledge and ideas. It can be argued that the larger part of the firm’s performance revolved around the capacity to bring new products to the market. The creative culture established by TQM process was clearly described in the rapid growth of financial determinants.

Some of the economic benefits include growth in sales, higher profits, POE decrease, inventory turns increase, and ROA increase. Between 1993 and 1998, sales grew by 19 percent while average profits increased by 22 percent. Period operating expense (POE) decreased by 40 percent while inventory turns increased from 4.8 to 8.7 in that period.

Return on assets (ROA) rose by 60 percent between the years. Profitability attributed to TQM was forecasted at $17.8 million by the turn of the millennium. Another economic benefit directly related to TQM was the expansion of the firm’s facilities. Clearly, the development of the new professional and administrative building was an outcome of the TQM process. The firm was also able to decrease material wastage and increase employee output per unit cost of the labor input.

Conclusion

As competition threat continued to intensify in the Argentine market, Gillette embarked on a TQM system to counter the competition. The challenge the firm faced of getting the employees to take on the system was solved by extensive training, workshops, consultation and proper response to the quality challenges perceived.

Teams were formed and involved in the process for various significances including: to create competitive advantage, to consolidate individual interests with the interest of the company, to act on the recommendations made by ODI, to enrich business ideas within firm, to eliminate departmental barriers, and to improve customer satisfaction.

This involvement allowed for the creation of the necessary working culture and speeded up the implementation of TQM. A different way of working sales that Rotundo had suggested led to the firm changing the way it looked at its customer by having a special focus on the sales, making customer satisfaction the main purpose of TQM process and conducting continuous survey on customer satisfaction. The working culture which changed from individualistic culture to team-working culture benefited the firm economically.

References

Daft, R., Murphy, J. & Willmott, H. (2010). Organization Theory and Design. Florence, KY: Cengage Learning EMEA.

Donnellon, A. & Engelkemeyer, S. (1999). Quality at Gillette Argentina. Web.

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