ROFO principle generates ownership, comitment and team learning- mindset change
before implementing Total Quality Management.
(ROFO stands for: R- responsibility, O- ownership, F- focus, O- on-time corrective action)
Ah Bee Goh
Chief Operating Officer
Schaffner EMC Co. Ltd.
Lamphun, 51000, Thailand
ABSTRACT
The basic concept of producing quality products dates back to a few centuries ago. It can be said
that it began with master craftsmen and artists (plus many more) who delivered master pieces all
solely through their efforts. They worked and inspected the work pieces themselves. In the
process, they were very proud of their work. Taylorism came into the picture about a century
ago and the principles of scientific management were borne. The principles of scientific
management advocate division of labor (Taylor1911). The Craftsmanship concept soon gave
way to Taylorism. The division of labor typically specifies that workers are trained on what they
are supposed to do and the control is basically with the management. As a result the
responsibility for quality shifted to the inspectors. Taylor system did increase productivity
significantly especially in mass production. Henry Ford was able to capitalize on the Taylor
system to produce affordable cars. As the Fordism and Taylorism evolved further, so was the
quality system in organizations. A separate quality function was the fashion and lofty titles like
Vice- President for Quality, Director of Quality and Corporate Quality Director etc. emerged.
To- day, it is the common norm that Quality department plays an important role in solving
quality issues. It is also the thinking that whenever there is a customer complaint for failure, the
first person they approach is the Quality Manager. Why is it that the Quality Manager is
responsible for quality and not others? Does it go against the conventional wisdom that if
everybody is responsible for quality and why is it only the Quality Professionals will take care
of it? It is clear that the Quality department does not produce bad quality products and to be
made responsible is unfair. Dr. Taguchi (1986) preaches that if the design is robust, there is no
need for on- line quality inspection and he is right but not many organizations in the world could
attain this level of excellence. This calls for mindset change in Total Quality Management- the
ROFO principle. It is a self- internalizing principle and if it is cascaded well throughout the
organization, it will generate ownership, learning and commitment in work.
Keywords: ROFO, ownership, team learning , commitment and TQM.
INTRODUCTION
Total Quality Management (TQM) has been one of the most popular continuous improvement
models in the last 30 years. Many organizations have implemented it but not all are happy with
the outcomes. The primary objective of any TQM program is to deliver products with quality at
the lowest cost and at a level that fulfills or exceeds customers’ expectations. Key items to focus
are “quality”, “cost’ “delivery” and “customer expectations”. Of all the items listed, none is
more important than quality. This is understandable as no one wants to buy shoddy products no
matter how cheap they are. In today’s competitive world, customers exert strong pressure on
suppliers to deliver quality products. Critics will argue that quality is just one of the constituents
of the TQM program and by paying more attention to it, we miss the big picture. It is my belief
that any TQM program is considered a failure if it is not able to deliver quality products to meet
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customer requirements. Customers are spoilt with choices and will not hesitate to switch
suppliers if they are not happy with their existing suppliers. Customers normally demand special
attention for all their complaints and CEOs designate Quality managers to deal with them. The
concept of quality department to take care of all quality issues is in line with the division of
labor principle which was founded by FW Taylor. A typical manufacturing organization is shown
in figure1. By virtue of the Taylorism concept, the basic function of each department is as
follows:
R&D department – responsible for innovation and new product introductions. Designs and
develops products for manufacturing.
Engineering department- develops the right processes to manufacture the products.
Quality department- responsible for quality issues. Develops inspection and control plans to
ensure quality products are delivered to customers.
Marketing and sales- responsible for marketing and sales of products.
Finance department-responsible for cost and financial matters.
Human Resources department- responsible for recruitment, training and development of staff.
Deals with issues that are directly related to staff.
Materials department- responsible for inbound and outbound logistics. Ensures materials are
delivered to the factory at the right time, right price and right quality. The same applies to
delivery to customers.
Production- ensures products are manufactured in accordance to the schedule.
CEO
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Quality
1
R&D
Marketing
/sales
Material
s
Engineering
Production
Quality
Human resources
Fig.1.
Empirical evidence indicates that four departments have more influence on quality than the
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others. They are R&D, Engineering, Materials and Production. Quality, marketing and sales as
well as human resources departments have indirect but not direct influence on quality. My
definition of direct influence means there is a cause and effect relationship. Some examples will
help to explain:
1. A shaft will not fit into a hole if the R&D department specifies the diameter of the shaft
far larger than the hole.
2. Engineering writes the sequence of assembly process wrongly. As an example, the right
way to assemble the product
is in accordance to A-B- C- D –E sequence but
engineering department specifies wrongly.
3. Material department buys the sub- optimal parts and as a consequence cause the
malfunction of the product.
4. Production department does not assign the right people with the right skills to assemble
the product.
Quality department has little or no direct influence on the quality of the products. If a product is
designed badly, quality department’s duty is to catch it before it goes out the factory. The quality
department will be blamed by the top management if it fails to catch the bad parts. The quality
manager thinks it is not fair for his department to be held responsible for shoddy work which
they have not committed in the first place. Other departmental managers including the Chief
Executive Officer (CEO) believe it is the responsibility of quality manager to take care of all
quality issues. What would the quality manager do? He will ask for more inspectors and more
authority to deal with the issue. To enhance the quality manager’s status, the CEO uplifts his
position in the organization (figure 1) from position “1” to position”2”. Customers love it as now
they see the CEO is paying attention in dealing with quality matters. The quality manager
institutes strict measures in the production lines. This angers the production manager as the
output of the day is reduced significantly. This was my experience while working in a German
camera factory, the production and quality mangers were arguing on the rejection criteria on
visual defects such as scratches and dent marks on the camera top covers. This occurred after a
batch of cameras with visual defects was returned from the dealers. The quality inspectors
obviously had passed the cameras with the visual defects. As a consequence the quality manager
was reprimanded by his CEO and he decided to implement far stringent measures than the
normal standards. The quality inspectors started to reject quite a number of cameras in
accordance to the new requirements. The output went down significantly and the production
manager had to face the music. The situation went from bad to worse and the production staffs
even attempted to send the cameras to inspectors who were more forgiving than their peers. It
was like a cat and mouse game. I have just illustrated a single incident as in real life numerous
issues of this nature do happen in companies. In theory, quality and productivity should
complement each other but in practice, it is not necessarily so. This is indeed an example of
productivity/quality dilemma. One may ask.” Why didn’t the CEO step in to help?” My
experience tells me that many CEOs are so engrossed in their office work so much so they are
oblivious on what is happening at the shop floor. Human Resource theories teach us that
everyone should work together for the common good of the company, the question is “how?” In
an organization, there are many players contributing to poor quality and by making one player
answerable is not going to work. The concept that quality department will take care of all quality
matters is not only the expectation of the employees but also the customers. Imagine a customer
has a quality issue, he calls the company, the reception will first direct his call to the quality
manager and not to the production or other managers. Employees think that anything which is
related to the word “quality”, it belongs to the quality department. I call it the unhealthy mindset
of the organization and CEOs have failed to recognize it. Quality gurus (Deming 1986, Juran
1988, Crosby 1979, Feigenbaum 1983, Ishikawa 1976,) preach that quality is the responsibility
of everyone in the organization. Other writers and scholars (Flood 1995, Oakland 1989 and
Martins et al 2000, Davies 2008, Mehra et al 2001, Shin et al 1998, Becker et al 1994) also
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deliver the same message. If we take the message from the gurus and scholars seriously, we
should not delegate quality problems to the sole quality manager. Why is it so difficult to abide
by the teachings of the aforesaid gurus? Researchers ( Flynn et al 1994,Cheng et al 2007,
Phan,C.A. et al 2013, Hendricks et al 2001) revealed that successful implementation of TQM
activities would improve company performance as well as increase customer satisfaction. The
big question is “how many companies are able to execute TQM program successfully?” Many
TQM programs fail or do not live up to their expectations. The unhealthy mindset of an
organization needs to be changed and this can be achieved by implementing the ROFO
principle. ROFO principle adds another dimension to the TQM program.
LITERATURE REVIEW
A review of TQM literature is not complete without studying the philosophies of the quality
gurus: Deming (1986), Juran (1988), Crosby (1979), Feigenbaum (1983) and Ishikawa (1976).
Deming lists 14 points:
Create constancy of purpose to improve product and service.
Adopt the new philosophy for challenge, change and learning.
Cease dependence on inspection to achieve quality.
End the practice of awarding business based on price and move to single supplier.
Continuous improvement and decrease costs.
Institute training on the job.
Institute leadership. The objective is to help worker to do a better job. Supervision of
management and production workers is in need to be overhauled.
8. Drive out fear so that everyone can work effectively together.
9. Breakdown barriers between departments.
10. Eliminate slogans and productivity targets for the workforce. They create adversarial
relationships as the bulk of the problems belong to management and the system.
11. Eliminate quotas and work standards and management by objectives. Institute leadership
as stated above.
12. Remove barriers that rob people of their right to pride in their work.
13. Institute rigorous program of education and self- improvement.
14. Put everybody in the company to work to accomplish the transformation.
1.
2.
3.
4.
5.
6.
7.
Juran has 10 points:
1. Ensure that all employees are aware of the need for quality improvement- this requires
leadership.
2. Set specific goals for the continuous improvement of quality in all activities.
3. Establish an organization to ensure goals are set and a process for achieving them
established.
4. Ensure that all employees are trained to understand their role in quality improvementthis must include upper management since they are the cause of most of the quality
problems.
5. Ensure that problems which prevent quality improvement from happening are eliminated
by setting up problem solving project teams.
6. Ensure that quality improvement progress is monitored.
7. Ensure that outstanding contributions to quality improvement are recognized.
8. Ensure that progress and outstanding contributions are publicized.
9. Measure all processes and improvements.
10. Make sure that the continuous improvement of quality and the setting of new quality
goal are incorporated into the management systems of the company. Make sure rewards
are based on the results achieved.
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Philip Crosby has 5 absolutes;
1.
2.
3.
4.
5.
Quality is defined as conformance to requirements, not as “goodness” or “elegance”.
There is no such thing as a quality problem.
It is always cheaper to do it right the first time.
The only performance measurement is the cost of quality.
The only performance standard is zero defects.
Feigenbaum’s main contribution is in the concept of Total Quality Control (TQC). His
definition of TQC is ; “an effective system for integrating the quality development, quality
maintenance, and quality improvement efforts of the various groups in an organization so as to
enable marketing, engineering, production and service at the most economical levels which
allow for full customer satisfaction”. He stresses that effective human relations is key to TQC as
finally it is the pair of human hands which affects the product quality. His philosophy can be
reduced to a four step approach:
1.
2.
3.
4.
Set quality standards.
Appraise conformance to standards.
Act when standards are not met.
Plan to make improvements.
Ishikawa’s philosophy is company- wide quality control (CWQC). Key features of CWQC are:
1. CWQC throughout the whole company. This requires the participation of all employees
of the organization.
2. Emphasis on training and education for all members of the organization.
3. Quality Control (QC) activities.
4. Use statistical methods (the so called 7 basic QC tools).
5. CWQC must be implemented continuously.
6. All employees must change their way of thinking.
Ishikawa (1986) points out that Taylor’s method ignores humanity and treats workers like
machines. Therefore a QC education should give workers the satisfaction of achieving their
goals, the happiness of cooperating with others as well as being recognized by others.
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Source: Rahman, S-R. Total Quality Magazine (2004)
Quality management concepts and practices have been significantly influenced by the
contributions of the above gurus. In the 1980s, TQM movement went on a big wave and it
attracted not only business leaders but also researchers. Saraph et al ( 1989) was one of the
earliest researchers to identify critical factors and this was followed by other researchers: Flynn
et al (1994), Waldman (1994), Black and Porter (1996), Ahire et al ( 1996), Sousa et al
(2002),Claver et al ( 2003). Rahman (2004) listed the critical elements of TQM as shown in
table 1. Mehra et al (2001) made an in-depth literature review and came up with 45 critical
factors. Later, they (Mehra et al) condensed the list into 5 groups as shown in table 2 with the
figures in the parentheses indicating the number of citing.
Human resource focus
Management structure
Teams – with group incentive system (27)
Top management involvement (20)
Training (26)
Key information to all employees (14)
Total employee involvement (10)
Leadership (12)
Empowerment and ownership (18)
Business culture (12)
Reward system (10)
Mechanism to set priorities (7)
Recognition (8)
Mechanism to co-ordinate activities (4)
6
Quality tools
Supplier support
Quality goals and quality planning (16)
Supplier involvement (15)
Process orientation (15)
Small supplier base (8)
Measurement of key result areas (14)
Customer orientation
Statistical process control (10)
Customer focus (34)
Data-based decisions (7)
Benchmarking (competition) (11)
Quality audit (4)
Continuous improvement process (9)
Customer oriented product development (5)
Table 2: Hierarchical structure of TQM elements within factors
Source: Mehra, S., et al. (2001) TQM as a management strategy
Talib et al (2010) did a comprehensive a research on CSFs (critical success factors) on TQM
program based on journals published between 1994 and 2010 (Saraph et al, 1989 was excluded).
In this study, 21 CSFs constitute 80% of the frequency of occurrence. Out the 21 CSFs, 10 of
them constitute 52% of the frequency of occurrence. They are:
1. Top management commitment.
2. Customer focus and satisfaction.
3. Training and education.
4. Continuous improvement and innovation.
5. Quality information and performance measurement.
6. Supplier management.
7. Employee involvement.
8. Employee empowerment.
9. Process management.
10. Human resource management.
The research work by Talib et al is in line with the findings of Mehra et al including other
researchers. The main objective of identifying the critical factors is to assist the practitioners to
implement TQM program successfully.
FAILURES OF TQM
There is no doubt that researchers had made great steps in identifying the CSFs for industry
players. Despite the enormous amount of work done by researchers to help companies to
implement TQM program, there are still reports of substantial failures. Criticisms of TQM as an
improvement model are mounting. Brown (1993) reported that two – thirds of the TQM
programs initiated ended up in failures. Harari (1993) presented 11 reasons for the potential
problems of TQM:
1.
2.
3.
4.
5.
6.
Focus on internal processes rather than on external results.
Focus on minimum standard.
Bureaucratic structure.
Delegates quality to quality Czars.
Does not require radical organization reform.
Does not demand changes in management compensation.
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7. Does not demand entirely new relationship with external suppliers.
8. Applies to faddism, egotism and quick- fixes.
9. Drains entrepreneurship and innovation from the organization cultures.
10. Has no place for love.
11. One size fits all.
Hendricks and Singhal (2001) indicated that there was wide spread adoption of TQM but there
was also criticism for delivering unsatisfactory financial gains. As cited in their research, TQM
also came under fire from the newspapers and business magazines: Business Week (Byrne,
1997), The Economist (1995), (Fuchs erg, 1992a, and b) and USA Today (1995).Sherwood et al
(1993) advocated 7 reasons why TQM wasn’t reaching its potential:
Problem 1- Total quality methods produce small successes soon and delude us into thinking we
are making significant progress.
Problem 2- Project orientation leads to piecemeal changes rather than system changes.
Problem 3- Training is often believed to be synonymous with implementation.
Problem 4- The focus is management control rather self –control.
Problem 5- A techniques- only approach will not work.
Problem 6- Staff cannot be the leaders. Here it means that top management delegates the
operational responsibility to a specially created quality staff officer.
Problem 7 –The role of leadership is often misunderstood.
Katz (1993) presented 8 TQM pitfalls;
The CEO delegates his/her responsibility for TQM.
Failing to recognize every company and every environment is different.
TQM tools applied first before need and direction are established.
Conducting training before established support for TQM.
Conducting mass training of hourly workers excluding training and involvement of all
levels of management.
6. Overemphasing technical tools at the expense of skills and the requirements of
leadership and management.
7. Failing to incorporate supplier organizations into firm’s internal quality program.
8. Not celebrating successes.
1.
2.
3.
4.
5.
THE WAY FORWARD FOR TQM
I can understand why there are criticisms leveled at TQM despite its enormous potential as
stated by those who had implemented it successfully. I entered the industrial world in 1971 after
graduated from college. My first employer was a German camera company and I was proud of it
as German products enjoyed the highest quality status in the world. It was undeniably true that
the German factory produced quality cameras. My analysis revealed that it was achieved by:
a. Excellent design- the German R&D center developed products that are in line with
manufacturing capability.
b. Well-developed package for training the workers.
c. Highly qualified staff in the quality department from inspectors to highest staff level in
the organization.
d. Excellent discipline of the workers as they followed work instructions strictly. German
workers were the most disciplined workers in the world after the Second World War.
e. High inspection content in the manufacturing processes. It was a vertically integrated
manufacturing operation as the German factory produced almost everything in house.
Very few parts were sourced from outside suppliers.
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f. All quality problems were managed by the Quality department which was in agreement
with the scientific principles of Taylor.
As indicated by the above analysis, if CEOs still think that quality issue is the responsibility of
the quality department, then embarking on a TQM program will not be successful. Before we
proceed further, it is helpful to understand the evolution of quality as shown below:
Phase I (basic stage)-From 1960s to 1970s – quality control was characterized by
inspection content and strict discipline is enforced.
Phase II (intermediate stage)-From 1980s to 1990s – quality assurance (initial stage of
TQM) came into picture as preached by the gurus. Main emphasis is on top management
commitment, training and development, prevention principles, breaking down barriers
and empowerment of workers.
Phase III ( advanced stage)-From 2000 till today – quality management is characterized
by co- operation, pride, trust, commitment, teamwork and learning at all levels of the
organization. This was the preaching of the research scholars.
In phase I, it was acceptable to apply Taylor principle to deliver quality products as competition
was not keen and many companies were still in the early stage of grasping the basic quality
concepts. In phase II, CEOs did not listen to the advice of the gurus (Deming 1986, Juran 1988,
Crosby 1979, Feigenbaum 1983, Ishikawa 1976). Instead of listening to the advice of the quality
gurus, some CEOs did the opposite by strengthening the quality department further. I will relate
one of my experiences in a multinational company. There was a customer threat that the entire
contract worth millions of dollars would be cancelled if the quality problem was not resolved
promptly. The CEO was angry that the quality department did not do a good job. The CEO held
a review session with his direct reporting managers to determine the root cause of the problem.
It was unanimously agreed that the root cause was they lacked a strong and aggressive quality
manager to lead the quality team. In addition, the quality manager had to be seen by the others
as a powerful person in the organization. In so doing, it would send a strong message throughout
the entire company that the company was serious about quality. To resolve the issue, a high
profile quality professional was recruited with a lofty title of Vice- President for Quality,
reporting directly to the CEO. The aforesaid Vice – President recruited more inspectors to fulfill
his plan that more inspection content had to be instituted so as to prevent poor quality products
from escaping. This example clearly illustrates that the real root cause was never discovered.
This was the norm in the 1970s and I was even told that every Quality Control (QC) inspector
had to have a higher educational level than the production workers. The notion was that only QC
inspectors whose educational levels were higher than the production workers would be able to
catch the poor quality work of the production. This is a cat and mouse game and there is no
difference from a scenario of a police trying to catch a thief. Obviously, such thinking of
producing quality work pieces will never work. In phase II, quality control gave rise to quality
assurance which was a right step in a right direction. This was partly due the changing
competitive landscape as companies were under cost pressure. Companies learnt that to use
more inspectors to achieve the desired quality levels would be costly and it was motivating to
switch to the quality assurance principle. In phase III, quality journey continued to advance to
quality management and we can call it the matured stage of TQM. It was in phase II that the
catch phrase, “Total Quality Management (TQM)” became the buzzword of the industry.
Frankly speaking, Deming and Juran did not use the phrase, “TQM” as both advocated that
quality problems occurred mainly because of poor system and ineffective management. I would
say TQM reaches its matured stage in phase III. Despite its maturity, the Taylor’s concept of
assigning all quality issues to the quality department remains unchanged. This is indeed one of
the barriers that prevents the successful implementation of TQM. Similar findings also reported
by:
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1. Katz (1993) who says that the CEO delegates his/her responsibility for TQM (item 1
under Katz above).
2. Harari (1993) says that, “delegates quality to quality Czars” (item 4 under Harari above).
3. Sherword et al (1993) indicate that staff cannot be the leaders (problem 6 under
Sherwood above). Here it means that top management delegates the operational
responsibility to a specially created quality staff officer.
Dayton (2003) performed a research study based on Black and Porter‘s ten CSFs and the result
revealed that the most important CSF was strategic quality management which emphasized
visible commitment and support of top management. Dayton’s finding is not only in line with
Katz (1993), Harari (1993) and Sherwood et al (1993) but also in agreement with my thinking
that quality never becomes the job of everyone, it is delegated to the quality department and the
other departments continue with their own functional work. In Dayton’s view, it means that
quality manager worries about quality, production manager worries about production, sales
manager worries about customers and so on.
Taylor’s scientific principle of management (1911) was developed based on his observations
that workers were “soldiering” which basically meant slowing down the work. He divided work
into two aspects, management did the thinking and workers did the work. In short, it is like brain
and brawn concept and control lies totally with the management. It was a revolutionary thinking
at that time and it did improve the productivity tremendously. Today, the principles of scientific
management are no longer applicable as the competition gets keener and organizations have to
be flexible to adapt to the changing demands of customers. Besides, the principles have been
criticized that they do not consider making use of the full potential of the workers (Ishikawa
1986).
Scholars and researchers have been helpful in identifying the CSFs for TQM implementation.
Tables I and II have listed the well-researched work of some scholars and there is a common
thread running through their work in terms of CSFs. Most frequently repeated CSFs are:
1.
2.
3.
4.
5.
Top management commitment and involvement.
Employee education and training.
Employee empowerment.
Employee involvement.
Rewards and recognition.
Other researchers (Talib et al 2007, Wilkinson et al 1995, Evans et al 1997, Jha et al 2010), also
have similar findings but the striking feature of Talib et al’s work is that out of 10 CSFs (which
constitute 52% of frequency), 8 of them are related to humanity. Issues that are related to human
aspects have been termed by scholars as “soft” factors or infrastructure practices (Rahman 2004,
Prajogo et al 2010, Dahlgaard et al, accessed from internet 2013, Abdullah et al 2013, Dale et al
1994, Souza et al 2002). Rahman et al (2005) did a research by dividing TQM factors into hard
and soft categories using the following hypotheses:
1.
2.
3.
4.
H1-Soft TQM elements have direct effects on organizational performance.
H2-Hard TQM elements have direct effects on organizational performance.
H3-Soft TQM has direct effects on the adoption and utilization of hard TQM elements.
H4-Soft TQM indirectly affects an organization’s performance through its effects on
hard TQM elements.
Their research supported all the above 4 hypotheses with the soft factor “workforce
commitment” as the most significant contributor not only to hard TQM elements but also to
organizational performance. Their findings tell us that appropriate adoption of soft TQM
elements is pre-requisite for the effective utilization of hard TQM elements. In a strict sense, soft
TQM factors are strongly related to the aspects of human resources (Monks et al 1996, Snape et
al 1995, Tari et al 2006, ). Wilkinson et al (1993) studied 15 organizations and concluded that
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the Human Resource (HR) function played a vital in the implementation of TQM initiatives both
at strategic and operational levels. HR function can take con roles like: change agent, hidden
persuader, internal contractor and facilitator. In 7 out of the 15 organizations, they discovered
that Human Resource function took the role as “change agent”. The most common role in the 15
organizations was “facilitator” such as hands- on support and training requirements. Top
management commitment has been cited by most researchers as the most important factor in the
successful implementation of TQM as shown in tables I & II. AL- Khalifa and Aspinwall (2008)
performed a study on 10 CSFs( management leadership, continuous improvement, measurement
& feedback, tools & techniques, supplier quality, human resources development, system &
processes, resources, education & training , work environment & culture) in small and medium
industries by asking the respondents to rate the importance of each factor. Leadership and
support from top management was the most important CSF. They also studied the relationship
between the “importance “and “perceived level of practice” by using paired- comparison
statistical tests. All the factors were significantly different from the evidence of the statistical
tests indicating that at the practice level the aforesaid CSFs had not been satisfactorily
implemented. Inability to implement it at the practice level has a lot to with leadership
effectiveness at all levels of the organization. We are not talking about the CEO alone but also
the middle and shop floor managers.
After pouring through numerous research papers, I conclude that leadership and top
management is the most important factor, without which, nothing will be changed. Working on
other CSFs is not going to get us far unless we can deal with the leadership factor effectively.
This leads us to a fundamental question, “what exactly do we want the CEO and his top
managers to do?” As earlier discussed, we inherited the “division by labor” structure (FW
Taylor 1911) and this has caused the organizations to be responsible for their own areas of
interests: quality department be responsible for quality issues, engineering department takes care
of engineering issues and sales have to ensure sales keep flowing into the organization and so
on. This is what I would label the “responsibility mindset” as everybody is responsible for what
they are supposed to do in accordance to their job descriptions. This is one of the major factors
that prevents TQM from being successful. This “division of labor” structure has resulted in one
way or another the “responsibility mindset” which hinders the modern organizations to
implement TQM programs successfully. Readers should not interpret that I am criticizing that
“division of labor “ structure as useless as it has served us well in the last few decades but it
needs to be evolved in the face of fierce competition. It is vital that CEO and his/her top team
must change the “responsibility mindset”. This is the first and most vital step I would preach to
any CEO to do if he or she wishes to implement TQM in his or her organization. This
“responsibility mindset” has been with us for years and CEOs are just not able to recognize it.In
today’s fast changing world and with customers spoilt for choices, organizations have to deliver
results fast. Organizations which want to move ahead of the industry pack cannot rely on the
“responsibility mindset” any more. It has to be changed into a mindset of commitment,
ownership and team learning. This is implemented through the ROFO principle – another
dimension of TQM. The ROFO principle was originally developed by me (author – Ah Bee
Goh) in 1987 when I was a General Manager in a company which produced hard disk drives and
personal computers (PCs). I had committed to deliver 200 PCs to Tandem computer of USA.
Three weeks before the delivery date, I was assured by my PC manager that the delivery date
would be met without problem. Two days before the committed date, I went to the office of my
PC manager and was abruptly surprised that the 200 PCs would miss its delivery date. I was
unhappy as I always promised on what I had committed to customers. In the midst of
unhappiness, I uttered the phrase to my PC manager, “You are an irresponsible person….” He
was very upset and rebutted, “Mr. Goh, I totally disagree with your statement as I always stay
back late to ensure all PCs are tested correctly before delivery…..” I looked at my watch and it
was 8pm and I asked him to cool down. The next few days I reflected deeply that my PC
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manager was correct that he was not irresponsible as on the contrary, he was very responsible as
he stayed late often to ensure all PCs were tested and fulfilled the customers’ requirements. I
realized that no learning would take place if he was told he was wrong which in reality was not
true. So my PC manager would still repeat the missed delivery if he couldn’t learn from this
mistake. My dilemma was, “if he was a responsible person, why didn’t the delivery be met?”
The answer was clear as the missed delivery was due to the late the arrival of one vital part
(power supply) which the supplier did not make it on- time. The problem could have been
resolved had he earlier highlighted it or followed up closely with the purchasing department. He
was waiting for the materials (power supply) until he was informed by the purchasing
department that the supplier had failed to deliver them. I came to the conclusion that he was
responsible but being responsible for his area was not good enough. He needed to take full
ownership of the entire process. He lacked the “ownership” mindset and I corrected him
promptly. A process is basically defined as a collection of related activities to deliver a desired
result as shown in figure 2 with responsible persons: W, X, Y and Z taking care of
corresponding activities: A, B, C and D.
Responsible
persons
W
X
Y
Z
Activities
A
B
C
D
Process
Desired
result
Fig. 2 – A process
Thus , if Mr. K is assigned with the job of delivering 200 PCs ( desired result) by a certain date,
he has to take full ownership by ensuring that the responsible persons ( W, X, Y & Z) must
complete their respective tasks (A, B, C & D) on- time. Failure to complete any task on- time
should be highlighted and corrective measures be instituted immediately. Mr. K must believe
that he has failed if anyone of the persons (W, X, Y, Z) has failed to do the job on- time. He
must do the utmost (by going the extra mile if necessary) to help should any of them encounters
problems. This is the preaching of the ROFO principle as explained below.
The ROFO principle (Goh 2001, Leica 2002)
ROFO stands for;
R- Responsibility.
O- Ownership.
F- Focus.
12
O- On- time corrective action.
The main objective of ROFO principle is to create ownership and the willingness to go extra
mile to execute tasks successfully and on-time. There is a fine difference between
“responsibility” and “ownership” and it will be explained by using the “coffee powder”
example. The objective of this example is to illustrate clearly that even though one has behaved
responsibly in performing a task, it doesn’t mean it is completed successfully.
The coffee powder example.
Imagine a Swiss customer is visiting an organization; let’s say AB Company Ltd. at 9
am. A cup of coffee has to be served to the Swiss customer. For a cup of coffee to be
prepared, the following events must take place;
1. Coffee powder to be bought yesterday.
2. Sugar and creamer must be bought and be ready yesterday.
3. Water to be boiled early this morning.
Suppose the secretary discovers that at 8.00 am that there is no coffee powder available
(event 1 has not occurred). The person who is responsible for replenishing the coffee
powder is the purchasing clerk and not the secretary. Obviously the purchasing clerk has
missed her duties. What would the secretary do? She has two options;
Option 1: Does nothing and informs her superior that no coffee can be served as the
office clerk had failed to purchase the coffee powder.
Option 2: Immediately on her own initiative, goes out to purchase the coffee powder and
prepare the cup of coffee. Later, she informs the office clerk that she has missed
purchasing the coffee powder and would appreciate she takes appropriate action the next
time. If the secretary takes option 1, two unfavorable outcomes will occur;
Unfavorable outcome1 -The office clerk gets blamed for not doing her job well.
Unfavorable outcome 2-The Swiss customer will not be satisfied as he is not being
treated as a guest. He has traveled 10,000 miles to come to AB Company and it will be a
horrendous experience for him if the company cannot organize a cup of coffee on- time.
What would the customer think? What impression will he harbor? Certainly he will not
believe that the company will deliver the goods on- time.
If the secretary takes option 2, she behaves in a ROFO manner and this is exactly how
the management wants her to act. By taking option2, the customer is oblivious of what is
happening but the important point is that the cup of coffee is being served on- time. The
secretary takes full ownership of the entire process and ensures that the final objective is
fulfilled. In accordance to ROFO model, even though the secretary has served the cup of
coffee, her action is still incomplete as what she does is only reactive i.e. on-time
correcting the problem and this is only the first part. The other part of the duty is to make
sure that the same mistake will not be repeated. The secretary politely informs the
purchasing clerk that she has corrected the problem and trust her (purchasing clerk) that
she will not miss again replenishing the coffee powder.
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If the secretary takes option 1, she will not be penalized as it is not her duty to replenish
the coffee powder. If we examine further, it reveals that she is also behaving in a
responsible manner as;
 She discovers the problem and she informs her superior on- time.

It is not her duty to replenish the coffee powder.
The irony is that the cup of coffee remains not served even though she has behaved
responsibly. Therefore she has to expand her responsibility so that she will own the
entire process. Fig. 3 illustrates the entire process.
Ownership
Respons
ibility
Focus
generate
on-time
corrective
action
Action 1
1111
Ownership
Action 2
she goes out to
buy the coffee
powder herself
she politely
informs the
office clerk about
the missed
coffee powder
purchase
Copyright Ah Bee Goh 1991
Fig. 3 ROFO principle (originally developed by Ah Bee Goh)
Another strength of the ROFO model is that when individuals practicing it, an
environment is created for team learning as in the above coffee powder example; the
secretary learns to take ownership and the purchasing clerk learns not to repeat the
mistake in a friendly and co- operative spirit.
In accordance to Goh’s thinking, people tend to behave in accordance to the job
description he has been given when he first enters the factory door. In short, people
believe that they are only responsible for what is written in the job description. It is
always Goh’s assertion that being responsible is not good enough. He argues that too
many unsuccessful events have happened not because people are not behaving in a
responsible manner but because people are not keen to take full ownership of the entire
process. Goh states that if organization is able to cascade ROFO spirit throughout the
entire company, it will use much less resources than their competitors. For example,
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ROFO principle was applied so successful in- Leica Instruments Singapore Pte. Ltd (Goh
2001) that it’s entire quality department (40 staff including quality manager, engineers
and inspectors) was disbanded as the control of quality was in the hands of the workers.
Production workers own it.
The main advantages of ROFO principle are;
a) Teaches people to take full ownership of the entire process
b) On – time corrective action of the problem
c) Take preventive actions so that problems will not recur.
d) Team learning-Continuous cycles of action and learning.
e) Create a co- operative spirit throughout the company.
f) Do away with politicking in company.
g) Resources are appropriately allocated and as a consequence use fewer resources than
necessary.
It is my experience that CEOs who have attended the TQM seminars are often delighted by the
success stories and are eager to implement TQM without first considering whether their
organizations are ready for such drastic change in mindset. I had seen a CEO who was so
excited about TQM that he gathered all his executives to listen to him. Everyone applauded and
lunch was served followed by the release of colorful balloons. A few months later the TQM died
a natural death as they were fearful that TQM program would increase productivity to an extent
that jobs would be lost.
ROFO WAY OF MINDSET CHANGE BEFORE IMPLEMENTING TQM
1. Companywide implementation of ROFO principle- everyone in the organization has to
be coached on the ROFO principle. It begins with the CEO and his/her top team. The
CEO and his/ her top team must exhibit visible behavior in accordance to ROFO
principle. Many productivity programs failed because of serious lack of commitment by
top management. Coaching of ROFO principle is a non- stop process. Top managers
must keep on repeating the importance of practicing ROFO principle wholeheartedly.
My experience tells me that an employee with an average length of stay in the company
of 5 years may undergo formal ROFO training a couple of times but he or she will
converse either formally or informally ROFO principle countless times with his
colleagues including customers, suppliers and friends. One of my managers even used it
to coach her children so that they would remember to keep their toys after playing.
2. Embrace ROFO as one of the values of the company. Tell the staff that ROFO is the way
we believe and behave in our daily lives. Put up ROFO posters in the meeting rooms and
at visible areas in the company. In my company we name all our meeting rooms as
“ROFO ONE, ROFO TWO” and so on .The objective is to transform an organization
from “responsibility” thinking into “ownership” mindset. The objective is to inculcate a
culture of right behavior. This is shown in figure 4.
15
3. Institute companywide training on basic quality tools. Basic tools are: histograms, Pareto
charts, Cause and effect diagrams, Statistical process control charts (SPC) and 5WHY
analysis and so on. CEO and top managers should be included in the training. One could
engage outside professionals for the training or better still use in- house trainers who are
conversant with statistical tools and analysis. It is quite common that CEO excludes
himself ( herself) from aforesaid training thinking that his ( her) staff will benefit most
as they will be using the quality tools in their daily work. This is a fallacy as I have heard
often from middle and rank and file workers who utter phrases like, “Why my boss is not
attending? How could he expect us to be committed if he is not committed?” When I was
a Managing Director in my former company, I insisted that the entire office staff (Human
Resources and Finance managers including my secretary) participated the SPC training
before I implemented the Six- Sigma program. At the end of the training they sat for an
exam and those who failed had to re- sit. This is to equip the entire organization with the
fundamentals of TQM knowledge. A study on Malcolm Baldridge National Quality
(MBNQA) applications (Easton, 1993) revealed that one of the important areas for
improvements is senior managers’ lack of understanding of TQM and its potentials.
4. Develop a set of relevant Quality key process indicators (KPIs) to monitor the processes
that could affect the quality of products. Basically, in an organization, a quality system
would consist of a number of quality gates to monitor the processes (figure 5). KPIs
should set at each gate.
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5. Institute daily quality meeting on the KPIs developed for each gate of the quality system.
The meeting should include quality manager, production manager, sourcing manager and
all the process and quality engineers. There is no excuse for the CEO or Managing
Director not to attend the daily quality meeting. The meeting should be led and chaired
by the production manager and strongly supported by the quality manager. Empowering
the production manager to chair the meeting, it will do away with the thinking that
quality manager is responsible to solve all quality problems. A common mistake by CEO
is to delegate the leading of the meeting to the quality manager.
6. Top management’s understanding and commitment to remove barriers to success. Many
barriers will arise in the process of converting the entire organization to “ownership
mindset”. From my experience , here are some common barriers:
a. The first and most commonly cited barrier is the CEO himself or herself. Many
CEOs do not realize that they are the main culprits to any improvement
initiatives. They do not “walk the talk”. They do not listen to their staffs’
problems and concerns. They believe issues raised by their staffs are small and of
little value. Some CEOs only listen to facts to their liking and those that are not to
their liking will be ignored totally. CEO must show visible support and true
ROFO spirit without which, TQM implementation is meaningless. Consider the
event which had occurred in accompany which I had worked as it’s Vice –
President. There was a project to transfer a product which was initially designed
and developed at European Research center, to an Asian manufacturing plant.
This was a project with all the milestones mapped out and each person’s
responsibility to fulfill each milestone was clearly spelled out. One evening, my
quality manager said to me, “Mr. Goh, you always preach that we should practice
ROFO principle and do the extra mile. Here is an example that the designer who
is responsible to do the design, failure mode and effect analysis (DFMEA) has
consistently refused despite our numerous communications. What is your view
and how would you want us to proceed?” My reply, “thank you for this input and
I will take over the responsibility to ensure that the designer will do the
17
DFMEA”. The next day, I held a top level meeting with the designer including
his superior and finally he accepted it was his responsibility to do DFMEA. This
is a classic example that happens very often in organizations and CEOs do not
lend a helping hand to their subordinates. ROFO begins with the CEO and
nothing will work if he refuses to listen to his staff.
b. Senior managers do not show commitment and support by attending to problems
presented by employees, by not showing up and also not participating
constructively in problem solving sessions. They do not walk to the shop floor
enough to listen to workers and observe the suitability of the working
environment. The Japanese top managers were more concerned than their western
counterparts on what is happening at the shop floor. I had experienced observing
Japanese managers taking seriously the verbal inputs of poor defects found by the
workers. To close the loop, the manager gave a feedback to the workers who
discovered the defects. On the other hand I found western managers tend to
question their workers who raised questionable issues by asking questions like:
“are you sure this is the real problem? Is this the only defect or are there more to
come?
c. The ROFO principle will not be wholeheartedly accepted by all staff at the
beginning. This is natural as changing mindset takes time to nurture and develop.
However, there will be some who show early signs of refusal to adopt. This
category of staff needs to be counseled and encouraged in a positive manner. It
should be dealt with patience and understanding. My experience tells me that
most if not all will be aligned eventually. The key is to identify this group of staff
and constantly nurture them as not doing it will constitute a significant barrier in
the organization’s journey of ROFO implementation. My experience is that top
managers at times choose the easy way out by ignoring them.
d. Focus on short term results. Top management is too eager to see tangible results
quickly. Top management must understand that the pursuit of TQM is a long
journey and there is magic for short term gains. If top managers expect quick
benefits, they must forget about implementing TQM program totally. Hendricks
et al ( 1997) studied MBNQA winners over a 10 year period , starting 6 years
before and 3 years after winning the award (-6 to +3). Some conclusions on
operating income :
i. There is not much increase in operating income before winning the award.
This shows that during the initial stage of TQM implementation (first 5
years), there is no quick results.
ii. Operating incomes started to improve one year (-1) before the award and
became better in the following years (-1 to +3). We can say that
implementation of TQM takes about 5 years or more before one can see
some tangible results.
7. Nurture and develop a ROFO learning environment. If ROFO principle is implemented
properly and across the board, a learning environment will happen. The CEO and his top
team must show visible ROFO behavior. For example, if there is a serious quality
complaint from customers which threatens the survival of the company, CEO himself
leads the entire task force, goes to the shop floor and brainstorms with his members until
the root cause is discovered. In the process, he stays late into the evening with his staff.
He tells himself that he will not leave the task force if the customers are not satisfied.
This is what I mean by commitment and learning together. The role of top managers is to
coach, empower and assist staff to take full ownership in accordance to ROFO principle.
At the beginning of ROFO induction, only a few members will buy it but as time passes,
more members will see the usefulness. The spirit of learning and solving the problems
together will result in a healthy learning environment. It starts with the individual
18
learning and grows into team learning. This continues until a true ROFO learning
environment is fully developed.
8. Rewards and recognition system. The rewards and recognition system must be designed
to support the ROFO value of the organization. In my former company, we used ROFO
attributes to promote and reward workers. We promoted workers who had shown ROFO
behavior in delivering exceptional results. Decision to promote is achieved through a
promotion committee consisting of managers from various departments. Nobody is
promoted unless it is through this committee. This means that even the CEO or the
manager cannot make final decision to promote their subordinates. They have to propose
to the promotion committee. In this manner, we have a system which ensures those most
deserving are promoted. Workers could feel that it is a just system as they know nonROFO workers will have slim chance to be rewarded. Workers are human beings and
they have feelings and wants. No worker will continue to work hard and deliver results if
his efforts are not recognized. Top managers must give timely feedback to workers’
performance. Ability to say “thank you” on a timely manner to workers who have done a
good job is a vital ingredient in motivating the workers to keep on performing. It is my
experience that top managers have great difficulty in expressing their appreciation to
others who have contributed well to the success of the company. Top managers must
make an extra effort to learn to appreciate the work of others.
CONCLUSION
This paper has made it clear that the failure of TQM implementation has a lot to do with the
leadership of the organization. This is the gap that the CEOs have not recognized it. Many blame
the seeds of TQM which in fact is the soil which causes the failures of TQM. For TQM to have a
better chance to be successful, it is better to focus on leadership factor first and ask the basic
questions, “what should the CEO do before considering the TQM implementation? Is the
company ready for TQM implementation, if not what should be done?” It has been pointed in
this paper that getting the organization to be ready for TQM implementation through mindset
change is more important than to hastily implementing it. This is the job of the CEO and it can
never be delegated. The success of TQM implementation is in the hands of the CEO.
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Profile of author
1. Working experience: Has more than 40 years of manufacturing experience and held titles like Plant
Quality Manager, Director of Manufacturing, General Manager, Executive Director, Managing Director
and Vice – President for Manufacturing ,etc. Had worked for Multinational companies like Rollei
(German camera ), Smith Corona ( Electronic type writer), Maxtor , Seagate and Western Digital and
Leica ( Microscope and surveying instruments).
2. Academic Qualifications:
a. BSc Honors , Production engineering (Strathclyde University, UK)
b. MSc Industrial Engineering ( National University of Singapore).
c. MBA (University of Surrey England)
d. MSc in Finance ( with Distinction)( University of Leicester, England).
3. Professional Qualifications:
a. Chartered Mechanical Engineer( F. I. Mech. E), UK and Chartered Electrical Engineer (FIET)
UK.
b. Professional engineer in Production engineering. Registered with the Professional Engineers
Board of Singapore.
c. Fellow of Singapore Quality Institute (SQI), Singapore.Now Honorary Advisor to SQI.
d. Honorary adviser of the Singapore Quality Institute.
e. etc
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