ABSTRACT

In 1993, the TVS Partnership Proprietary, Limited, (TVS) was the first small business to be awarded the prestigious Australian Quality Award (AQA). TVS’s core business is a small architectural and landscape firm. This case study traces the firm over time, both before and after winning the award. Since 1993, TVS has been successful in improving its quality, despite adverse industry trends. It has grown and diversified into new areas e.g. hotel management, and developed an innovative approach to building management. While successful, the company, and its directors struggle with various growth and operations-related issues, explained in the case.

BACKGROUND

TVS Partnership Propriety, Limited is a professional partnership that employs about 30 people in the parent organisation, plus approximately 55 others in subsidiaries. TVS was founded in 1990 by three architects who took over an established firm.

The company now has 7 major “product lines” that include:

· Architectural and building design

· Interior design

· Landscape design

· Environmental Building Management (E.B.M.)

· Explorer’s Inn Hotel chain ownership and management (a moderately priced backpacker’s hotel)

· Property development

· Research and development

The “core” business involving the first four, can be called: “Architectural design and consulting.” This case focuses on the core business operations, although some questions may be raised about the “strategic fit” of the hotel division with the organization.

The firm is led by the five directors, including the dynamic co-founder and Managing Director (CEO), Laurie Truce. Since 1990, he has pushed for innovation, so the firm has diversified into related product lines, and expanded its geographical horizons. This has caused some short-term growing pains for the company.

During the period from 1990 and 1997, the firm grew by over 50% in number of employees. Annual turnover (revenue) has increased by approximately 50% per year for the last several years.

The award (among many received by TVS) that has had the most impact on the company’s development was the Australian Quality Award given in 1993. TVS was the first small business in Australia to win the Australian Quality Award.[2] The undertaking of a process to win the Award tended to be the thing that benefited TVS the most.

STRATEGIC FOCUS

The External Environment in Australia

The environment of property development and the need for architectural services was very volatile in Australia in the 1990's. Commercial development of resorts, office buildings, hotels, and apartment properties went through a rapid boom and bust cycle. In the end, many developers were declared bankrupt. In their wake, numerous architectural and property development firms also either shrank in size or went bankrupt.

The Environment for TQM in Australia

The Total Quality Management philosophy has developed over the last decade Australia, in response to a variety of internal and external forces. Some of these were government-sponsored incentives, government-mandated regulations, consultants who “pitched” various TQM approaches, and international competitive pressures for various quality certification processes, such as ISO 9000. TQM has also endured many of the same criticisms that have vexed the movement in the United States.

TVS was introduced in 1989 to formal concepts of TQM through a Queensland government sponsored process called World Competitive Manufacturing. Later, Australia developed a number of industry-based, local, regional, and national awards to recognise companies and organisations that exhibit outstanding quality. The Australian Quality Award (AQA) is similar to the American Malcolm Baldrige National Quality Award (MBNQA) but was developed independently. It has had a similar impact as the MBNQA in giving organisations a set of guidelines to follow in their quest for quality. Because it is a model on which TVS has been measured, the seven categories of the AQA model are used to loosely define the topics covered in the case. They include:

· Leadership

· Policy and planning

· Customer focus

· People

· Customer Focus

· Quality of process, product, and service

· Organisational outcomes

Senior Leadership

The leadership of TVS has been proactive in developing strategic management, envisioning future direction of the firm, and being actively involved in internal development of associates, managers, and staff. The five directors are all responsible for, promoting quality, motivation, improvement using quality tools, reviewing plans, competitive performance, goals and objectives, education and training, customer and supplier relations. Individual directors are responsible for overview and improvement of specific areas of activity, such as finance and administration, office facilities, operations, research and development, human resources, public relations and quality processes. ^[3] They are very proud of their leadership style, that includes high involvement, shared leadership, teamwork, and empowerment of associates.

Policy, Planning, and Decision-Making

TVS has developed a unique strategy that has evolved over more than eight years. Policy and planning are key parts of the AQA criteria. The World Competitive Manufacturing process and established strategic planning and led TVS to think more broadly than conventional architectural firms about their mission and vision. Consequently, they became very entrepreneurial. Laurie Truce indicated that there has been a mind-set of continuous change in the organisation since 1990.

Customer Focus

TVS consciously develops processes and plans to enhance customer focus. Directors encourage associates to focus on the needs of the customer. Simultaneously, these efforts contribute to accomplishing their strategy and making their vision materialise. Thus, the processes may been seen as planned, deliberate, and integrated. They include 1) customer focused marketing approaches, 2) business development approaches, 3) cross-selling, 4) innovative product/service development, such as Environmental Building Management.

PEOPLE - LINKING STRATEGY & OPERATIONS

Human resource management (HRM) (the AQA people criterion) is extremely important in both the core business of consulting as well as the new hospitality division at TVS. In a professional service organization, human resources determine both the strategic and operational quality, and eventual success, of the firm. This is a continuing emphasis at TVS. Three areas of HRM are consistently and creatively addressed: 1) recruiting and induction, 2) compensation and rewards, and 3) teamwork.

OPERATIONS AND TQM DEPLOYMENT

The vision of TVS focuses on three areas -- self, customers, and community. The company developed the slogan, “Success through service,” in 1990. It later broadened its perspective to include a customer and a community focus. They try to share it down very deep in the organization. They have developed a company model that graphically integrates their vision and the operational application of quality practices to every facet of the business. They are consciously attempting to use operating systems, customer and associate feedback, and quality improvement tools and techniques to provide an integrated approach to reaching their strategic vision.

At a presentation before the “Implementation Strategies for TQM Conference” at Queensland University of Technology,^[4] Director Mark Thomson stated how these three areas are integrated at TVS :

A clear shared vision binds the organisation, its people and processes and acts a guide from the formation of policies and objectives, right through to personal daily actions...

The TVS Partnership recognises its customers as its clients; however, we also recognise our responsibility in helping shape the environment of the future and the effect it has on its users and the community at large.

CASE TEACHING FOCUS

Learning objectives

The case allows students to consider alternatives to many issues in the aftermath of success. The core issue is how to sustain high levels of achievement in a small organic professional service organisation. The major themes are:

q Matching strategic choices, such as diversified expansion and leadership style, with changing external and internal environmental conditions

q TQM implementation involving the deployment AQA award practices, and extending the gains

q Developing a supportive HRM strategy and systems.

q Contribution of quality tools, measurement processes, and work-systems to meeting customer-focused goals in a professional service firm.

The range of important management and performance factors, can be used to develop an integrated approach (emphasize the first two themes), an operational approach, (emphasize the second two themes), or a comprehensive approach, using the entire set of themes.

Target Audience

The case is broad-based and not highly technical. Hence, it is suitable for use across disciplines. It is especially relevant to the fields of quality management in a professional services firm, operations management focusing on quality, human resource management, and strategy. The case may be used to explore requirements for integrating HRM with strategy and quality in order to sustain high performance. It can be used in advanced undergraduate and postgraduate case-oriented courses and management development seminars if students or student groups of have sufficient time to read and prepare to discuss the case.

Decision Focus

How does the senior leadership team (five partners and the quality manager), maintain an integrated quality-focused management system in a professional services firm that is facing an increasingly turbulent business environment?

Integrating Strategic & Operational Management

The AQA criteria, are similar to those of the U.S. Malcolm Baldrige Award, the Canadian Quality Award, and the European Quality Award, and stress an integrative system of management, not just quality control. Hence, the seven components of the AQA form a set of guidelines for structuring the organisation to integrate strategic and operational planning. These components are presented as a framework for development of both integrative and operational management thinking. They are used in the case to provide a broad outline for discussing the past and present experience of TVS as it developed an integrated TQM focus and structure.

Teaching Strategy

Although not particularly technical, the case is reasonably complex. Therefore students will benefit from time to study and absorb the details before discussion. We recommend pre-reading of the case with an analysis agenda in advance of the discussion of the case. There are many ways the case can be treated depending on the learning agenda. If the case is being fully explored, it probably is advisable to move from the strategic to the operational or into particular discipline areas such as HRM or quality.

While individual consideration might encourage independent thinking and analysis, learning might be enhanced by organising small groups of students to work on different aspects of the case and to be charged with leading a discussion on the nominated area. After all group topics have been discussed a plenary session might be used to draw together the main issues. Alternatively, or in addition students might be required to provide a written analysis of one or more aspects of the case.

Conclusions

TVS is an organization that is full of contradictions. It has a strong TQM philosophy in an environment where that is going out of style. It is highly dependent on motivating its professional staff, yet it cannot settle on a consistent way to do so. It seeks to be innovative and “sell” customers on the need for sustainable environmental practices, but cannot profitably do so. It has brought in associates and inducted them into the practices of using the systems and procedures it has developed for cost analysis and control, but still struggles with issues of teamwork, empowerment and organisational governance. However, TVS’ approach has helped make the organisation a profitable leader in a field where the old “norm” has been “cost plus a profit for markup” and where the “boom or bust” environment means that less agile firms have “gone bust.” Although it may need some “fine tuning” for some of its management and quality systems, TVS is a generally healthy organization with an excellent outlook.