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Analog Devices: 1986-1991

The First Balanced Scorecard

by

Arthur M. Schneiderman

Setting the Context:

What is QIP?

Before describing the Quality Improvement Process or QIP portion of the strategic plan, let me try to define what QIP was.  You might think that that is an easy task, but as you'll see, it isn't at all.  To me, QIP had been Analog's name for the Total Quality Management of its day.  The name was adopted by Ray Stata after he attended Phil Crosby's Quality College in Florida.  I failed to realize at the time that Crosby's version of TQM (or TQC/CWQC as it was then called in Japan) was much more limited in scope.  This eventually led to much hidden confusion within Analog, which only came to the surface when we participated in the creation in 1989 of the Center for Quality Management, a Boston-based consortium of companies and universities pursuing the implementation of Japanese style TQM in our respective organizations.

I was convinced that Analog, like most other Western companies, would reject a full dose of Japanese TQM given all at once.  Consequently, my strategy for QIP implementation was based on the approach taken at that time by one of my teachers, Joe Juran.  Start TQM by focusing on problem solving teams and gradually unroll a broader umbrella as organizational acceptance increased.  As Joe put it, this would help overcome the organizational "immune system's" rejection of change.  The relevance of this is that the QIP plan had a very strong cross-functional problem solving team focus.  In this way, I hoped that all employees would learn the three basics of TQM: customer (or more broadly stakeholder) focus, involvement of all employees and, and a commitment to continual improvement of all processes.

So let me try to define where I was coming from and what the rest of the organization thought.  I refer you to one of my articles, Are There limits to TQM, for a more complete discussion of this subject.  TQM (much like the balanced scorecard itself) had relatively modest origins: the 1950's Quality Circle movement in Japan.  Over time, however, its reach spread, partly as a result of its success and partly from the complexity introduced as the nature of the problems changed from single-function, to cross-functional (e.g. manufacturing and design) and eventually to cross-organizational (including external customers and suppliers) in nature.  

As the nature of the problems changed, so also did the tool set used by the teams addressing them: the well known 7-QC tools and the lesser known 7-Management and Planning tools.  This evolving nature of TQM continues today as its envelope of critical processes in need of improvement broadens.  Note that a similar evolution has occurred in the definition of quality itself (see The Fifth Fitness).  In fact today, with its application to all business processes, including the strategic planning process, the resource allocation process, the training process, the hiring process, etc., it is difficult to identify any management responsibilities that fall outside of TQM's ever-expanding umbrella.  That's why I ended my Limits article with a variant of the equation:

Quality Improvement=QC=QA=QC Circles=CWQC=TQC=TQM=M

In other words, what started as a very specific improvement activity evolved over time from quality control to quality assurance to QC circles to company-wide quality control to total quality control to total quality management and is now, in many ways, indistinguishable from management itself.  This dynamic is well evidenced by the name and focus change of a number of organizations with roots in quality improvement: the American Society of Quality Control is now the American Society for Quality; the Center for Quality Management, the Center for Quality of Management, and several years ago, the Malcolm Baldrige National Quality Award all but purged its criteria of the word "quality" and refocused its thrust on competitiveness.

I was much influenced in my approach by a Japanese saying: "When the student is ready, the teacher will appear."  It reminded me of similar quote attributed to an anonymous Iowa farmer: "Don't burden me with more ideas about how to farm better, I'm not farming as well as I know how now."  So I made the conscious decision to start with problems and processes that could be addressed by middle management.  I did this because I was convinced from previous experience and the little that I had initially learned about Analog that they would likely be the focal point for organizational resistance and the protectors of Analog's immune system.  My strategy was to build a series of significant success stories,  develop a cadre of middle management champions and use them to eventually drive TQM buy-in both up and down the organization.  I did not see the need for sharing this strategy broadly within the organization.

I attempted to graphically capture my model for the QIP by creating a logo or symbol.  Today, we would call it the QIP icon.  You can tour the 1990 version of this QIP Logo and read a current explanation of each element by clicking on it.

The unraveling of my personal strategy started in 1990, with Analog's involvement in the CQM.  Senior managers were exposed to a broader view of TQM than I had shared with them.  They were quickly led to the conclusion that QIP was a limited and obsolete approach to process management.  This contributed in part to a rapid collapse of QIP team activity starting in 1990.  Several of the other contributing factors are described in Sterman, Repenning and Kofman's study of ADI's TQM implementation.

For these and other reasons, I will limit my discussion here to the period from 1986 to 1990.  This also represents the period prior to Kaplan and Norton's introduction to Analog's balanced scorecard.  But keep in mind that it represented a narrow view of TQM, a view that I felt was essential as Analog took its first fledgling steps in redefining itself.

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1999-2006, Arthur M. Schneiderman  All Rights Reserved

Last modified: August 13, 2006