Abstract 002-0447

Introducing Total Quality Systems in Construction. A case study.

(Implantación de sistemas de calidad total en la construcción)

Second World Conference on POM and 15th Annual POM Conference, Cancun, Mexico,

April 30 - May 3, 2004.

Josep Capó, Guillermina Tormo, Ángel Ortiz

Dpto. de Organización de Empresas – Universidad Politécnica de Valencia

Plaza Ferrandiz y Carbonell; 03801 Alcoy (Alicante) Spain

Tel. + 34 96 652 84 66 / Fax: + 34 96 652 84 65

[pepcapo, gtormo, aortiz]@omp.upv.es

ABSTRACT

This paper presents a model developed by the Department of Business Organization at the

Universidad Politécnica de Valencia (UPV). It can be used to develop business models

following the self-assessment methodologies of the European Foundation Quality

Management, but it also introduces a new component; the creation of multi-departmental and

multi-hierarchical teams with complementary roles for carrying out the self-assessment. One

particular case is studied: that of a medium-sized business in the construction industry into

which this model has been introduced. An analysis is made of the stages followed to introduce

it, the difficulties that arose and the results obtained.

Keywords: business models, high performance teams, total quality, construction

1. Introduction

These are times of far-reaching technological and organizational changes, and many

companies are finding that they have to change their approaches so as to be able to face the

challenges presented by this new environment. In these situations, companies need to be very

clear about the business model they want to follow because, if they are not, they will quite

possibly lose their sense of direction and then it will be difficult for them to face their new

challenges with any degree of success guaranteed.

The incorporation of new technologies and organizational forms has come about gradually in

the construction sector, unlike in others where the changes have been truly revolutionary. The

biggest changes have been in technology and management, especially with the incorporation

of new materials such as prefabricated elements, the automation of on-site construction

processes, and the move from practically non-existent planning to planning for specific

projects.

The Department of Business Organization at the Universidad Politécnica de Valencia (Spain)

has developed a model for developing business models and has applied it to an up-and-

coming construction business undergoing a stage of growth and expansion.

The aim is to find a business model consistent with the initiatives of the company, in which

all the actions the company needs to carry out are structured in a coherent and integrated way,

allowing future actions also to be integrated into the system.

2. Historical data.

2.1 The construction sector in Spain.

The construction sector in Spain has a more accentuated cyclical profile than the economy as

a whole, basically as a result of its being strongly dependent on the economic cycle of

investment in infrastructures and building. The fact that the business goes in cycles means

that many companies, both large and small, experience great financial difficulties in times of

recession, and this is the main reason why they are following new strategies.

The trends observed in Spanish constructors are as follows:

Growing process of concentration

High level of technification and introduction of innovative management systems

Diversification into complementary business areas

Orientation towards comprehensive project management

Introduction of programs orientated towards the safety and training of all workers

whether staff or subcontractors

Growing orientation towards attracting people's savings through their presence on

the stock market

A trend is visible towards new forms of organization and relationships between companies,

suppliers and clients, which will enable them to face new challenges in the sector. This

basically comes down to two main strategic choices whereby constructors try to reach a

competitive size to enable them to guarantee the necessary technical and financial capacity to

undertake new projects;

Diversification

Strategic alliances

Concentrating on the diversification option, we find that companies are following one of

three main lines:

Strengthening classic diversification activities (vertical diversification)

Entering new businesses (horizontal diversification)

Increasing their activity abroad (internationalization)

The first of these is the most predominant in small and medium sized constructors, while the

other two are those most used by the big groups, which have the necessary human, technical

and financial means to break into other sectors and markets.

Entering the real estate promotion business tends to be the first step in the process of vertical

diversification for small and medium businesses (“natural development”) because of the high

margins and the closeness of the business to construction and building.

Other typical activities in vertical diversification are those that have a certain relationship or

similarity to the construction business itself and which can be fitted into its supply chain:

Urban planning

Installation and assembly

Drainage

Engineering

Conservation

Construction materials

2.2 The company.

The company that is the subject of this paper is family-run and was set up in the 1980s as a

company specializing in industrial construction. At present it is undergoing a stage of growth

and developing new lines of business - especially urban planning and real estate promotion -

within a process of vertical diversification.

The company has seen spectacular growth, especially over the last three years. Over this

period they have doubled their turnover every year compared to the year before. Such rapid

growth, however, has brought them a series of problems including:

Mixing the roles of supplier and customer on an internal level

Not taking into account that the businesses are very different from a technical and

professional point of view, and that each requires a different financial structure

No segregation or independence of the decisions made in each of the businesses

carried on

In addition, the business cycles in real estate promotion are almost identical to those

in construction, so in slow periods the effect is multiplied

In order to avoid these problems it has become necessary to introduce new management

models. These need to be structured by business area, decentralized in all operational aspects

but with shared service centres for corporate functions and support so as to take full

advantage of the functional synergies in these areas and reduce structural costs (Parada,

2002).

The aim is to develop a business model within this new dynamic, consistent with the new

reality, through a series of actions enabling the company to undergo competitive growth that

will be sustainable over time, acting in every area of the company (staff, strategies, processes

and technology).

3. The model's objectives.

The proposal to work together has a single objective: to develop the company business model.

This objective seeks to generate a business model consistent with the initiatives of the

company, in which all the actions the company needs to carry out are structured in a coherent

and integrated way, allowing future actions also to be integrated into the system.

The main objective is accompanied by a series of complementary objectives that are

considered necessary if the hoped-for results are to be obtained. Specifically, these are:

to achieve suitable management of the change in order to obtain full integration

between the company staff and the new model developed

to obtain a suitable transfer of knowledge towards company staff to facilitate their

autonomy and independence in the maintenance and evolution of future projects

4. The model's development.

The EFQM Excellence Model was chosen as a benchmark to enable a preliminary diagnosis

of the company to be carried out in a structured way. Specifically, self-assessment of the

company was undertaken following the model's criteria, and thus were obtained the strengths

and weaknesses which will serve to establish the company model sought.

This model defines new criteria (Figure 1) for assessing the company's progress towards

excellence. These criteria are used especially to locate the company's most serious

weaknesses and consolidate its strengths, thereby enabling it to improve its results.

Figure 1: Criteria of the EFQM model

What usually happens in companies that introduce the EFQM model is that self-assessment is

carried out by one of the following methods:

Pretending they are competing for the award

Self-assessment forms

Self-assessment through an improvement matrix

Self-assessment questionnaires

Self-assessment through work meetings

However, these methods obtain biased results because they do not involve all the staff, only

management.

An alternative method for carrying out the self-assessment was proposed. It would be carried

out by creating two high performance teams made up of staff from every department in the

company and from all levels of the hierarchy. The process is as follows (Figure 2):

Figure 2: Process to be followed for self-assessment

The main stages are explained in more detail below.

4.1 Creation of work teams.

4.1.1 General information.

The meaning of the word team originates from games. Each player in a team has a position

and a specific responsibility and, although the skills of each player are important, the strength

of the team depends especially on how they combine together. In a high performance team

each player knows when and how he has to participate, and knowing how to do so at the right

time is fundamental. In such circumstances it is essential that the players know each other.

Creation of work teams

Definition of objectives

Training in Total Quality

Analysis of each of the criteria

Presentation of strengths and weaknesses

Group scoring

Consensus meeting

Definition of action plans

A team is made up of a small number of people with complementary abilities who have a

common purpose and shared objectives for which they are mutually responsible. Teams are

not large groups; their size tends to vary between 2 and 25 people, although the most

advisable size is around 5-7 people. Teams that are too small may lack certain abilities or

complementary points of view, while large teams find it more difficult to interact and work

together as a team.

A team requires a product of working together and all its members are responsible for seeing

it is carried out. This group product is the result of uniting the contributions of all the team

members, who work together to reach an objective.

In the process of creating a team, the selection of its members becomes a factor which, even

if undefined, is essential. Therefore the first thing the team leader has to concern himself with

is finding people with the right blend of technical capacity, decision-making ability and

people skills in order to bring about the mission's successful completion. Some researchers

claim that a diversity of cultures, functions and personalities makes a greater amount and

variety of training and points of view available to the team in such a way that its overall

potential increases. Others, however, say that a team's performance depends on its common

framework and shared objectives. Diversity produces divergent interpretations and unshared

interests in such a way that conflicts become more probable and political behaviors develop.

These problems may make the decision-making process deficient.

Individuals contribute to work teams in different ways. Experimental studies carried out by

Belbin (1993) show that a team's success depends to a great extent on a balanced

heterogeneity of contributions within it (always in accordance with a particular objective).

Composition then is transcendental and the selection of team members must focus not on the

search for very powerful individuals but on individuals that complement each other. Thus

people's weaknesses can be overcome while their strengths remain fully available.

In this sense it should be pointed out that, while heterogeneity in the behavior of individuals

is almost infinite, the variety of behaviors that bring value to tasks is much more limited.

Hence these useful behaviors can be organized according to a series of related groups called

team roles. Therefore we can say that a team role is a tendency to behave, contribute and

interrelate with others in a particular way. There are nine team roles, each of which

contributes in a different way to ensure the team's success:

Cerebral roles: Plant, Monitor Evaluator and Specialist.

People-oriented roles: Coordinator, Teamworker and Resource Investigator.

Action-oriented roles: Shaper, Implementer and Completer Finisher.

In short, it can be said that a team benefits from the way its members complement each other,

while at the same time teams with greater diversity call for greater control of basic team

development processes.

4.1.2 Creation of teams in the company.

First of all interviews were carried out with all company staff from the directors to the

operators. These interviews had two objectives: to find out what all the staff thought of the

company and at the same time to find the ideal people to make up the work teams.

Each interview sought to find out if the interviewee was willing and available to participate in

an important project - as defining the company model would be - which would involve a great

deal of time and effort. Potential leaders and people who might prove resistant to the change

were identified at the same time.

Their principal roles were determined a priori following Belbin's methodology, and these

would be used to create balanced teams.

In this case two balanced work teams were created to carry out the company's self-

assessment, as explained in the following section. The main characteristics of the teams

obtained are as follows:

The teams are balanced between attention to detail and personal relations. The only

problem could be their scant concern for very specific matters

They are focused on the tasks to be carried out, which they will do meticulously. Any

work they do will bear the seal of quality

Considered as a whole, they are balanced teams with a great variety of personal

qualities, but it is important that each team member is aware of the role that others

carry out and their potential contributions

The strength of these teams is to be found in their capacity for constructive debate.

This quality helps them avoid being pressurized into action and making mistakes due

to lack of forethought

Their strength is the capacity to plan and make decisions in the long term; their

weakness is in short-term matters

4.2 Carrying out the company self-assessment.

Once the work teams had been formed, they were given basic training on team working and

on the EFQM model.

First of all there was an introductory session in which the project's objectives were presented.

The teams were also given general information about the team roles, the results of their self-

perception tests and details about the EFQM model criteria.

Next there was a practical course on the model in which the teams carried out the assessment

of a fictitious company. This fulfilled two objectives: to familiarize them with the model,

learning to assess a company following the criteria, and to learn how to work in a team.

The self-evaluation of the company itself was then carried out. To this end weekly sessions

were organized following this agenda:

Presentation of the relevant criteria by the moderator

Separation of the two work teams

Analysis by each team of the criteria as applied to their company, thus obtaining its

strengths and weaknesses and the corresponding scores

Presentation of the conclusions by the two teams

Debate and general consensus

Preliminary analysis was made of some of the criteria through surveys enabling further work

to be carried out on the results, thereby supplying both objective and subjective assessment.

At the end of each session the project coordinator within the company took charge of drawing

up the minutes along with the final conclusions that had been arrived at in the final consensus

meeting. These were then sent to all the team members. During the week each team member

had to have a meeting with colleagues who did not belong to the teams in order to tell them

what had been agreed at the meeting. They could then contribute anything they considered

important. In this way all company staff were encouraged to participate and get involved.

A short time at the start of the next meeting was set aside to go over the conclusions and

contributions that may have arisen. Thus what had been talked about in the meetings reached

the whole company and involved all the staff, rather than remaining as something that only

concerned team members.

Once all the company self-assessment had been carried out, a final report was drawn up which

included all the strengths and weaknesses detected.

4.3 Establishment of action plans.

Once the company self-assessment based on the EFQM Excellence Model had been carried

out, the actions to be taken were as follows:

Analysis and prioritization of weaknesses to be improved

Establishment of work teams

Drawing up of action plans for the improvement of each weakness

Approval of the action plans by the EFQM committee

Follow-up of the action plans

The details of each are listed below.

4.3.1 Analysis and prioritization of weaknesses to be improved

An analysis was carried out of the weaknesses to be improved which were obtained from the

company self-assessment for each of the EFQM model subcriteria. These were then ordered

according to their importance, and those considered to be priority were undertaken.

The two teams for change shared out the subcriteria in the following way:

Team I:

o 1a, 2a, 3b, 4a, 4b, 5c, 5d, 6a, 6b, 9a, 9b

Team II:

o 1b, 2b, 2c, 3a, 4c, 4d, 5a, 5b, 7a, 7b, 8

The weaknesses to be improved for each subcriterion were given points according to their

importance as per the following guidelines:

A weakness considered as priority for improvement receives a score of 10. The next

one gets 9 and so on until all weak areas have been given a score.

In the event that a particular subcriterion contained more than 10 areas for

improvement, from number 11 onwards they would all have a score of 1.

Once all the subcriteria areas for improvement had been scored, the EFQM model correction

factor (Table 1) was applied in order to produce a final list of all improvement areas detected,

ordered by importance.

Table 1: EFQM correction factors

Criteria EFQM correction factor

1. Leadership 1

2. Policy and strategy 0.8

3. People 0.9

4. Partnerships and resources 0.9

5. Processes 1.4

6. Customer results 2

7. People results 0.9

8. Society results 0.6

9. Performance results 1.5

4.3.2 Establishment of work teams

Once the ordered list of improvement areas was obtained, work teams were created and given

the task of taking care of each one. The procedure for this was as follows:

Each member of the self-assessment committee indicated whether they would be

willing to lead a work team. All of them were willing to continue, with the exception of

Rosa Juan, who preferred to leave the project at this point.

The people willing to do so established the EFQM committee.

The weak areas for improvement that were to be worked on were chosen from the

ordered list, the number of them chosen being equal to the number of work teams to be

formed.

Each person involved chose an improvement area. In the event that two or more

people were interested in the same area, the most suitable of the two was chosen by a

vote of the EFQM committee.

Once all the improvement areas had been assigned, each team leader proposed a

maximum of three people from within the company to become members of their team.

The committee approved the team leaders' lists and also had the power to propose the

substitution of any member or the incorporation of another.

4.3.3 Drawing up of action plans for the improvement of each weakness

Each team leader had a meeting with their team members and prepared an action plan

proposal for the relevant improvement area. This included their objectives, the actions they

envisaged would be necessary to reach them, how long each action would take, who would

be in charge of them, and the resources that would be necessary.

4.3.4 Approval of the action plans by the EFQM committee

Each member presented their proposal to the committee, which then approved it if

appropriate.

If the proposal were rejected, the committee suggested changes to the action plan, giving a

period of one week for the necessary changes to be made. The proposal would then be put

before the committee again for its definitive approval.

4.3.5 Follow-up of the action plans

Once the action plans are approved, each team must carry them out in order for their

objectives to be reached within the expected time. The committee will meet every month to

follow the teams' progress.

5. Conclusions.

This paper has shown a method for determining company models on the basis of self-

assessment following the EFQM model, but carrying it out through the creation of high

performance, multi-disciplinary and multi-hierarchical teams.

It has been possible to do the following by applying this model:

Facilitate a systematic and global revision of the company

Make the company aware of and committed to improving its overall management

Diagnose the current situation

Identify the company's strengths and weaknesses

Decide on and plan improvements

Promote a culture of continuous improvement

Generate motivation and participation

Encourage continuous staff training and greater professionalization.

Improve results

The main problems that arose are as follows:

Weak or partial involvement. A lack of or inadequate attention to any element (quality

oriented culture, reward system, worker participation,...) can mean that objectives will

not be reached

Resistance from management. A lack of support and even opposition from

management. The causes for this may be:

o fear of losing power

o fear of losing their status within the company

o belief that their contribution to improving quality is much greater than that

which their subordinates or any improvement team could supply

Lack of integration. On many occasions there is no real integration between company

strategy, its human resources policies, etc. The change is not taken seriously because

there is no reward for reaching objectives

The company must adapt the introduction of the system to its own circumstances and

not try to copy systems used by other companies

The development of a larger bureaucracy. The new model could be seen by the staff as

a process for completing registers, drawing graphs, filling in forms, etc.

The necessary changes in the organizational structures to support collaboration

mechanisms do not come about

The managers expect fast infallible results to solve their problems

References

Parada Pardo, J. “El proceso de diversificación en el sector de la Construcción”. Directivos

Construcción nº 147, pág. 38. Julio/Agosto 2002

Belbin, M. “Roles de Equipo en el trabajo”. William Heineman. London. 1993.

Acknowledgements

We would like to thank the Foreign Language Co-ordination Office at the Polytechnic

University of Valencia for their help in translating this paper.