Business Management Articles
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by Rene T. Domingo (email comments to

The best gauge of total quality in a bank is how well the bank's management and employees have internalized the principles and practices of total quality management and total customer satisfaction. High deposits, high profits, and zero customers complaints are not necessarily accurate indicators of total quality success. Current indicators or traditional financial benchmarks are short term in nature, self-serving, and may lead to self-congratulation.

In my book Quality Means Survival (Prentice-Hall, 1997), I recommended eight steps or milestones with which any organization, including banks, could measure its true progress in the total quality journey. The first five are management decisions or actions. The last three are consequences of the first five steps that will be manifested by employees and staff.

Step 1: Formulate a quality or customer-driven mission statement
Step 2: Top management should lead and model the way to total quality
Step 3: Align and adapt all company policies to quality goals
Step 4: Institute a continuous quality training program for all employees
Step 5: Empower all employees and seek their suggestions for continuous improvement
Step 6: Expect employee to behave according to the new quality rules and responsibilities
Step 7: Expect employees to develop quality attitudes
Step 8: Expect a new quality corporate culture to emerge as employees act and feel the same way

Note that a behavior is defined as a superficial action of an employee because of compliance to some rule or procedure he may not like or agree with. When he realizes the soundness of these new rules or policies, the behavior is transformed into an individual attitude. An action based on attitude is done not because of compliance or fear of sanction, but because of personal belief and conviction. When every adopts the same attitude inside and outside work, then this common attitude and behavior become the new corporate culture.

By achieving all these eight steps, the bank can expect to continuously satisfy and delight all their customers and clients. These results can be sustained in the long run or indefinitely since total quality would have been incorporated into the management systems and corporate culture. Moreover, this strong service-oriented culture will withstand changes in leadership or even ownership of the bank. It can be observed that without total quality in place especially in traditionally managed companies and banks, quality programs get initiated and aborted or derailed as chief executives and other senior managers come and go. Employees in these companies get confused and management loses credibility.

In implementing the eight steps above, it is important not to skip a step or bypass several to change corporate culture. For instance, it is imprudent to train bank employees - tellers and managers alike - on customer service without changing their performance appraisal which is purely based on volume (deposits and loans) rather than on service quality. Employee training without a corresponding change in company policy on promotion and appraisal will not change employee behavior.

Another common mistake is empowering employees without training them or changing company policy. Empowerment usually means expanded scope of responsibility or the license to "go out of one's way" to satisfy or serve an external or internal customer. Without cross-functional training and without a change in the restrictive job descriptions as stipulated by the human resource or personnel policy, bank employees cannot and will not fully exercise their empowered mandate. Moreover, the banking industry is replete with policies that are control, audit, and security oriented. Many of the bureaucratic procedures due to these policies may prevent empowered employees to provide fast, friendly and competitive customer service.

Another stumbling block in achieving total quality in banking is that most mission statements of banks put the highest priority on financial performance like profits and return on investment. Moreover, these statements put the stockholder way ahead of the customer, who ironically is the lifeblood of the bank. Obviously, this sends the signal to all employees that quality and service are secondary or minor objectives that can be compromised or sacrificed for profitability as the need arises. It is important to review and rewrite the bank's mission statement before it can be used as the battle cry and beacon of its total quality journey.

Another problem is that many bank executives in senior or top positions are control and finance oriented who lack training and experience in service and quality management. They would have difficulty in shifting paradigms in a new competitive environment where the key success if not survival factor is superior customer service rather than liquidity and high spreads. A quality-driven top management team is a must for total quality success.

Finally, bank policies must be reviewed so that those that are anti-quality and anti-customer are discarded. Many bank control and security policies and procedures are unnecessary and redundant. They are based on mistrust of employees, managers, systems, and even equipment. They produce red tape that makes it impossible for the bank to provide superior and competitive customer service. A total quality bank will maintain security without sacrificing service.


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