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TOTAL QUALITY MANAGEMENT

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, 

INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON 

GOVERNMENT REFORM 

AND OVERSIGHT 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

JUNE 9, 1997

Serial No. 105–62

Printed for the use of the Committee on Government Reform and Oversight

(

(II)

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT 

DAN BURTON, Indiana, Chairman 

BENJAMIN A. GILMAN, New York 

J. DENNIS HASTERT, Illinois 

CONSTANCE A. MORELLA, Maryland 

CHRISTOPHER SHAYS, Connecticut 

STEVEN SCHIFF, New Mexico 

CHRISTOPHER COX, California 

ILEANA ROS-LEHTINEN, Florida 

JOHN M. MCHUGH, New York 

STEPHEN HORN, California 

JOHN L. MICA, Florida 

THOMAS M. DAVIS, Virginia 

DAVID M. MCINTOSH, Indiana 

MARK E. SOUDER, Indiana 

JOE SCARBOROUGH, Florida 

JOHN B. SHADEGG, Arizona 

STEVEN C. LATOURETTE, Ohio 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

PETE SESSIONS, Texas 

MICHAEL PAPPAS, New Jersey 

VINCE SNOWBARGER, Kansas 

BOB BARR, Georgia 

ROB PORTMAN, Ohio 

HENRY A. WAXMAN, California 

TOM LANTOS, California 

ROBERT E. WISE, JR., West Virginia 

MAJOR R. OWENS, New York 

EDOLPHUS TOWNS, New York 

PAUL E. KANJORSKI, Pennsylvania 

GARY A. CONDIT, California 

CAROLYN B. MALONEY, New York 

THOMAS M. BARRETT, Wisconsin 

ELEANOR HOLMES NORTON, Washington, 

DC 

CHAKA FATTAH, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland 

DENNIS J. KUCINICH, Ohio 

ROD R. BLAGOJEVICH, Illinois 

DANNY K. DAVIS, Illinois 

JOHN F. TIERNEY, Massachusetts 

JIM TURNER, Texas 

THOMAS H. ALLEN, Maine 

HAROLD E. FORD, JR., Tennessee 

———

BERNARD SANDERS, Vermont 

(Independent) 

KEVIN BINGER, Staff Director 

DANIEL R. MOLL, Deputy Staff Director 

WILLIAM MOSCHELLA, Deputy Counsel and Parliamentarian 

JUDITH MCCOY, Chief Clerk 

PHIL SCHILIRO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY

STEPHEN HORN, California, Chairman 

PETE SESSIONS, Texas 

THOMAS M. DAVIS, Virginia 

JOE SCARBOROUGH, Florida 

MARSHALL ‘‘MARK’’ SANFORD, South 

Carolina 

JOHN E. SUNUNU, New Hampshire 

ROB PORTMAN, Ohio 

CAROLYN B. MALONEY, New York 

PAUL E. KANJORSKI, Pennsylvania 

MAJOR R. OWENS, New York 

ROD R. BLAGOJEVICH, Illinois 

DANNY K. DAVIS, Illinois 

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California 

J. RUSSELL GEORGE, Staff Director and Chief Counsel 

MATT RYAN, Professional Staff Member 

ANDREA MILLER, Clerk 

MARK STEPHENSON, Minority Professional Staff Member 

(III)

C O N T E N T S 

Page 

Hearing held on June 9, 1997 ................................................................................. 1

Statement of: 

Bailey, Steven, president, American Society for Quality Control; and 

Harry Hertz, Director, National Institute of Standards and Technology 

[NIST], National Quality Programs, Department of Commerce ............... 3

Carroll, Thomas, National Director for Quality, Internal Revenue Service; 

David Cooke, Director of Administration and Management, Department 

of Defense, accompanied by Anne O’Connor, Director, Quality Management; Gerald Kauvar, U.S. Air Force; Brigadier General James Boddie, 

Jr., U.S. Army; Captain Scott T. Cantfil, U.S. Navy; and Lieutenant 

Colonel Tom Sawner, Air National Guard .................................................. 190

Conchelos, Joe, vice president for quality, Trident Precision Manufacturing, Inc.; Rosetta Riley, president and chief executive officer, Sirius 

21, Inc.; Rear Admiral (Ret.) Luther Schriefer, senior vice president 

and executive director, Business Executives for National Security; and 

Lawrence Wheeler, vice president, Programs Systems Management Co., 

Arthur D. Little, Inc. .................................................................................... 49

Wall, Steve, director, Ohio Office of Quality Services; and Greg Frampton, 

executive administrator, South Carolina Department of Revenue ........... 96

Letters, statements, etc., submitted for the record by: 

Bailey, Steven, president, American Society for Quality Control, prepared 

statement of ................................................................................................... 6

Carroll, Thomas, National Director for Quality, Internal Revenue Service, 

prepared statement of ................................................................................... 193

Cooke, David, Director of Administration and Management, Department 

of Defense, prepared statement of ............................................................... 209

Frampton, Greg, executive administrator, South Carolina Department 

of Revenue: 

Information concerning debt and personal bankruptcy ......................... 132

Prepared statement of ............................................................................... 111

Juskiw, Nick, CEO, Trident Precision Manufacturing Inc., prepared statement of ........................................................................................................... 53

Hertz, Harry, Director, National Institute of Standards and Technology 

[NIST], National Quality Programs, Department of Commerce, prepared statement of ........................................................................................ 27

Riley, Rosetta, president and chief executive officer, Sirius 21, Inc., prepared statement of ........................................................................................ 59

Sawner, Lieutenant Colonel Thomas E., Deputy Director, Air National 

Guard Quality Center, prepared statement of ........................................... 250

Schriefer, Luther, Rear Admiral (Ret.), senior vice president and executive director, Business Executives for National Security, prepared statement of ........................................................................................................... 68

Wall, Steve, director, Ohio Office of Quality Services, prepared statement 

of ..................................................................................................................... 100

Wheeler, Lawrence, vice president, Programs Systems Management Co., 

Arthur D. Little, Inc., prepared statement of ............................................. 75

(1)

TOTAL QUALITY MANAGEMENT 

MONDAY, JUNE 9, 1997 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, 

INFORMATION, AND TECHNOLOGY, 

COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 9:30 a.m., in room 

2154, Rayburn House Office Building, Hon. Stephen Horn (chairman of the subcommittee) presiding. 

Present: Representative Horn. 

Staff present: J. Russell George, staff director and chief counsel; 

Andrea Miller, clerk; Matt Ryan, professional staff member; and 

Mark Stephenson, minority professional staff member. 

Mr. HORN. The Subcommittee on Government Management, Information, and Technology will come to order. 

In our relentlessly competitive global economy, the only constant 

is rapid change. In this environment, organizations must adapt or 

perish. Effective competitiveness depends on effective management. 

The private sector has proven remarkably adept at organizational 

flexibility. The public sector has been distinctly less successful at 

changing with the times. 

Today, we will learn about one of the management philosophies 

that has helped many organizations become more efficient and effective in a very competitive environment. Government has many 

concerns, other than the bottom line, but public and private sector 

services are inevitably compared in the consumer’s mind, and in 

certain cases, Government must compete directly with private companies. It is no surprise that in recent years voters have made 

abundantly clear their desire for a more efficient and affordable 

Government. 

Total quality management, TQM, is a management approach 

that strives to achieve continuous improvement of quality through 

organization-wide efforts based on facts and data. Organizations 

use quality management principles to determine the expectations 

of all their customers, both external and internal, and to establish 

systems to meet those expectations. 

In recent years, both Federal and State governments have found 

that they could not attain high quality by using traditional approaches to managing service and product quality. The customer of 

the Federal Government is the American taxpayer. To satisfy its 

customer, the Government must design its programs, goods, and 

services for quality. I will be the first to admit, however, that this 

is a vague prescription. How can we talk about total quality manVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 W:\DISC\45403 45403
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agement in simple concrete terms? Is this a management philosophy about good human relations? Would it be accurate to say total 

quality management boils down to paying attention to the customer? If so, how can that principle systematically be applied in an 

organization? 

I hope our witnesses today will help us bring management theory 

down to the level of plain English and concrete examples. Furthermore, application of quality management principles to the government, an organization whose customers are also its owners, presents a unique set of challenges. We, therefore, hope to hear suggestions from each witness today on how quality management principles might be applied to the special case of the government. 

Our purpose here is to work toward a more efficient and effective 

Federal Government. We ask that you help us to benefit from your 

expertise as we go about this. The formal definition of a total quality management company exists in the criteria for the Malcolm 

Baldrige National Quality Award. This annual award, given since 

1988 by the Department of Commerce, recognizes companies that 

excel in managing for and achieving quality. 

We will hear from the American Society for Quality Control and 

the National Institute of Standards and Technology, which administer the Malcolm Baldrige program, and we will also hear from 

two past recipients of the Baldrige award. The hearing begins with 

an overview of total quality management from two management experts, Steven Bailey, president of the American Society for Quality 

Control and Dr. Harry Hertz, Director of National Quality Programs in the National Institute of Standards and Technology of the 

Department of Commerce. 

Following this overview, we will hear from several individuals 

who have experience with total quality management in the private 

sector. Joe Conchelos is vice president for quality at Trident Precision Manufacturing Inc.; Rosetta Riley, president and chief executive officer of Sirius 21, Rear Admiral Retired Schriefer is senior 

vice president and executive director of the Business Executives for 

National Security, BENS; Lawrence Wheeler is vice president of 

Programs Systems Management Co., a division of Arthur D. Little, 

Inc. 

After the view from the private sector, the third panel will focus 

on total quality management experiences in State governments. 

Witnesses, Steve Wall, director, Office of Quality Services for the 

State of Ohio; and Greg Frampton, executive administrator, South 

Carolina Department of Revenue. 

Finally, the fourth panel will focus on the Federal Government. 

The witnesses are Thomas Carroll, National Director for Quality at 

the Internal Revenue Service; and David Cooke, Director of Administration and Management at the Department of Defense. Mr. 

Cooke will be accompanied by several Department of Defense colleagues, Anne O’Connor, Director of Quality Management, Department of Defense; Dr. Gerald Kauvar, U.S. Air Force; General 

James Boddie, Jr., U.S. Army; Captain Scott T. Cantfil, U.S. Navy; 

and Lieutenant Tom Sawner, Air National Guard. 

We welcome all the witnesses and look forward to the testimony. 

I see Mr. Bailey and Dr. Hertz are here. 

3

Gentlemen, on this committee, we have the tradition of swearing 

in witnesses, so if you don’t mind standing and raising your right 

hands. 

[Witnesses sworn.] 

Mr. HORN. Both witnesses affirmed. 

Why don’t we just go in the order in which they are on the agenda. Steven Bailey, president, American Society for Quality Control. 

Welcome. 

STATEMENTS OF STEVEN BAILEY, PRESIDENT, AMERICAN SOCIETY FOR QUALITY CONTROL; AND HARRY HERTZ, DIRECTOR, NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY [NIST], NATIONAL QUALITY PROGRAMS, DEPARTMENT OF COMMERCE 

Mr. BAILEY. Thank you and good morning, Congressman Horn. 

I would like to thank you for inviting the American Society for 

Quality Control, or ASQC for short, to share our insights on quality 

improvement. 

ASQC is one of the world’s principal sources of information on 

quality methodologies, with over 130,000 individual members, include nearly 3,000 quality practitioners who work in Government 

at the Federal, State, and local levels. 

The message for you from the ASQC is simple and involves these 

four points. First off, there is a great deal of quality activity occurring today in the public sector and we are learning a lot from it. 

Second, Government experience with quality, in many ways, parallels the private sector’s experience. Reasons for success and failure aren’t so much different between these two sectors. Third, you 

need a solid framework for improvement, and the good news is you 

have one—I will talk about that—that can mean the difference between success and failure. Fourth, public sector quality efforts are 

at a critical turning point right now. So let me elaborate on each 

of these points. 

First off, the public sector started its quality journey later than 

the private sector. It is still not as far along as one would like but 

we now have several years of accumulated experience in Government and many examples of successes. We also have many opportunities to learn from the failures. Lots of good things have been 

accomplished, many of which have gone unrecognized. You will 

hear about some of these later on today, I believe. 

Some of these are even examples for the private sector to emulate. For example, the Social Security system’s telephone operation 

was recently deemed to be the best in the country, better even than 

organizations like L.L. Bean, whose fortunes are tied to their phone 

responsiveness. And I think it is also significant ASQC has just bestowed on a public servant one of the highest honors we can give 

to any quality professional, our Ishikowa Award for leadership in 

improving the human aspects of quality went to Joseph Dickey, 

chief operating officer of the Tennessee Valley Authority [TVA]. He 

introduced a three part model to help improve the relations between management and employees. 

In the packet of materials, there is a bibliography that documents experience of numerous Government quality efforts at the 

Federal, State, and local levels. Many of these examples come from 

4

sources that are not widely circulated, so I think you will find them 

new and instructive. 

Based on these and many other experiences, I can tell you that 

there are more similarities than differences between the public and 

private sectors. Reasons for the success and failure are remarkably 

similar. So how does one in retrospect judge success or failure? 

Well, in the same way an organization guides its progress as it is 

designing and implementing a quality system. You have got to 

have a framework for improvement, a guide to tell you how to start 

out and how you are doing. You need this framework just as in the 

private sector. 

Now such a framework exists in the criteria of the Baldrige 

Award and there is a Federal counterpart to the Baldrige Award 

called the President’s Award for Quality. The award categories and 

underlying core values define what it takes to have a successful 

quality system. 

We are very fortunate to have Harry Hertz from NIST and he 

can explain better than I how this works. We know that in some 

private businesses, quality efforts start out with a bang and then 

stall dead in their tracks. Others keep forging ahead. Motorola, 

Ford, DuPont, and Texas Instruments are just a few of the wellknown examples of companies that have continuously renewed 

their quality efforts. 

In the public sector, early successes in the IRS regional centers 

seem to have stalled, perhaps distracted by massive problems in 

upgrading the agency’s technology. IRS faces major hurdles in establishing the public’s confidence. It, unfortunately, ranks dead last 

among 200 companies and Government agencies rated in the American Customer Satisfaction Index, the ACSI. 

By contrast, consider the Patents and Trademark Office. In 1992, 

its public services and administration division won a quality improvement prototype award, which is part of the President’s Quality Award program that I mentioned earlier. Recently, the office 

made a commitment to the Secretary of Commerce to do a 

Baldrige-style assessment of the entire organization to build on its 

previous successes. So which shall it be for the Federal Government, continued progress and more success, or backsliding? 

I am personally very optimistic, and here are some reasons why. 

First, there is a core of believers out there in Federal agencies who 

have demonstrated what is possible. I can tell you they are fired 

up about quality and making things happen. Second, they now 

have some structure to support their efforts. For example, the National Performance Review is a catalyst for some stunning changes 

in Government’s adoption of quality methods. Third, we are seeing 

stronger links to quality experts and private sector quality practitioners being formed. And fourth, there is a lot more sharing back 

and forth among all these groups. These networks are growing rapidly. A prime example is the Public Sector Network, which is an 

interest group within ASQC. It is having a real impact among people dedicated to advancing public sector quality. Recently, the Public Sector Network launched its 21st Century Governance Initiative 

to bring citizens’ focus and to bring citizen focus and involvement 

back into the Government processes. 

5

So in conclusion, this is really a critical time for public sector 

quality. The challenge for the Federal Government will be to capitalize on these good examples which exist. Some of which you will 

hear later today, other ones are in the bibliography that we provided. To make sure that the best work spreads, momentum needs 

to be sustained and encouraged, and this committee has a role to 

play. I encourage you to use your influence to make sure it happens. After all, oversight is one of the key steps in the quality improvement cycle. 

Your efforts are to be commended. Let me suggest that the best 

way for you to learn about quality in Federal Government is directly from the people who are living it every day. And you have 

a great opportunity to do that. The 10th Annual Conference on 

Federal Quality takes place here in Washington next month. I encourage you to attend. You will learn more about the reality of 

quality in a day there than you could get in a week of sitting and 

listening to people like me. You can hear about the best of the Federal quality activities. And I am sure people will speak frankly 

about their problems and setbacks as well as their triumphs. I 

hope I have conveyed the quality profession realistic assessment of 

the state of public sector quality, and I thank you for listening. 

Mr. HORN. Thank you very much for that summary and as you 

all know, your full statement goes automatically in the record 

when we introduce you. I particularly appreciated the bibliography 

with your attachment, and I am going to have to ask you to translate a few of the various euphemisms, initials, and others on some 

of that bibliography. 

[The prepared statement of Mr. Bailey follows:]

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Mr. HORN. Dr. Harry Hertz is Director of the National Quality 

Program for the National Institute of Standards and Technology, 

U.S. Department of Commerce. Thank you for coming over. 

Mr. HERTZ. Thank you, Mr. Chairman. I am pleased to appear 

before you in the 10th year of the Malcolm Baldrige National Quality Award program, to give you an update and 10-year perspective 

on quality and performance improvement in the United States. I 

would like also to outline some of our thinking on future challenges. 

On August 20, 1987, President Ronald Reagan signed Public Law 

100–107, the Malcolm Baldrige National Quality Improvement Act 

of 1987 with the purpose of providing a national program to recognize U.S. companies and other organizations that practice effective 

quality management, and as a result, make significant improvements in the quality of their goods and services, and also to disseminate information about their successful strategies. 

From the start, our definition of ‘‘quality management’’ has focused both on the customer and on operational performance. We 

view quality as delivering ever-improving value to customers while 

at the same time maximizing the overall effectiveness and productivity of the delivering organization. 

The Baldrige Award Criteria, now called the Criteria for Performance Excellence, to emphasize their applicability to all types of 

organizations, have been developed through extensive interaction 

with the private sector. The criteria are based on 11 core values. 

They are: customer-driven quality; leadership; continuous improvement and learning; employee participation and development; fast 

response; design quality and prevention; long-range view of the future; management by fact; partnership development; company responsibility and citizenship; and a results focus. 

The criteria provide a systems perspective to performance management, focusing on assessment of leadership, strategic planning, 

customer and market focus, information and analysis, human resource development and management, process management, and 

business results. 

The criteria have evolved over the 10-year period since 1987, as 

our understanding of quality has evolved and matured. This evolution has led to the fundamental reconsideration of even the term 

‘‘quality,’’ to a concept better characterized as ‘‘performance excellence’’ that embodies every aspect of an organization’s performance 

management system. Embodied in this shift is a maturation in 

many aspects of our thinking on performance management. 

We have evolved through stages of quality, from quality assurance to process quality, to quality management, and now to overall 

performance management. This mirrors the U.S.’ evolution from a 

singular need to improve the quality of products and services to a 

recognition that competitiveness and performance excellence require a focus on the system. 

As the U.S. focus on quality, competitiveness, and performance 

excellence has grown, the Baldrige approach has spread across the 

United States, and around the world. There are currently more 

than 40 State and 25 international Baldrige-based programs. The 

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based award for Federal Government agencies. Many of the State 

award programs include State agencies in their eligibility categories. While the National Quality Program shares Baldrige materials with all these programs, and is gratified by the widespread 

adoption of Baldrige principles, we do not monitor progress of the 

many State and Federal agencies that use the Baldrige criteria. 

With the evolution and maturation of our focus, from a focus on 

quality management to a focus on performance management and 

performance excellence, we have learned a number of important 

lessons. They include: Quality management is organizational management; the two cannot be viewed as separate activities with independent leadership. Management of process quality is process management of all key product, service and support processes. When 

you manage, align and coordinate key processes, you manage and 

improve their quality. Quality results are an organization’s business results. If the quality results are not focused on operational, 

product service, and bottom line financial performance, they are 

not addressing what is important to the organization. Numbers are 

plentiful; few organizations go the extra step of transforming numbers into vital data for monitoring progress, even fewer organizations align, correlate, and analyze data to permit fact-based strategic decisions. Mission, vision, values, strategies, key processes, 

and key measures are related. Many organizations still do not relate key measures to their key processes, much less to their forward-looking strategies. Performance excellence is a journey; it is 

not a destination that is ever reached in a globally competitive 

economy and marketplace. 

In pilot studies in 1995, we learned with some translation to 

make the criteria understandable and more relevant to specific settings, the education and health care sectors can also use and benefit from the Baldrige approach to quality performance and excellence. Encouraged by the results of these pilot studies and by the 

support we have received from the education, health care, and 

business communities, we are looking forward to the creation of 

Baldrige Award categories for education and health care in 1998, 

using the proven public-private partnership approach that already 

exists for the business award program. 

We have also learned that quality pays. In a study conducted by 

the U.S. General Accounting Office in 1991, of 20 companies that 

were among the highest scoring Baldrige applicants in 1988 and 

1989, the GAO observed, companies that adopted quality management practices experience an overall improvement in corporate performance. In nearly all cases, companies that used quality management practices achieved better employee relations, higher productivity, greater customer satisfaction, increased market share, and 

improved profitability. 

In a study we conducted in 1994, for the 10 Baldrige Award winners analyzing productivity enhancement as annual revenue increase per employee, a median average annual compounded growth 

rate of 9.4 percent and a mean of 9.25 percent was achieved, far 

outstripping the economy as a whole. 

In our annual stock performance study, conducted in December 

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ed companies receiving site visits as part of the Baldrige award application process outperformed the S&P 500 by 2 to 1 or 200 percent. 

Looking to the future, I believe the most significant challenge 

facing U.S. organizations today is the development of a fully implemented systems approach to performance management, to understand and guide systemic actions, to create value, and to learn as 

an organization. The challenge is to use customer and market 

knowledge in setting strategy, to use strategic directions in helping 

to create economic and customer value, to define key processes and 

human resource needs in a globally diverse work force, to understand the requisite information needs and appropriate analyses 

that clarify business results, and from those results, drive continuous organizational learning and improvement. 

Thank you, Mr. Chairman. I would be pleased to answer any 

questions you may have. 

Mr. HORN. Well, I thank you for that very thorough statement. 

[The prepared statement of Mr. Hertz follows:]

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Mr. HORN. I am sort of motivated to ask you one question to 

start with, and don’t take it as a hostile question; I am just curious. Does the National Institute of Standards and Technology have 

any total quality management programs? 

Mr. HERTZ. We have done a Baldrige assessment of our own office at NIST, as have several other units within NIST begun to do 

the same. And we have undertaken a significant strategic planning 

exercise as part of an overall activity for NIST. 

Mr. HORN. You have a very scientific high quality organization. 

What have you discovered there that might be different from a 

more typical governmental process oriented, let’s get the job done, 

let’s serve the public directly organization? 

Mr. HERTZ. I think what we have learned is a focus on customer 

is equally applicable, that the scientific discovery process is not one 

that lends itself fully to the exact same process management protocols that some other processes do. 

Mr. HORN. Well, what could we learn from the science groups 

that perhaps we need to learn and apply in the nonscience groups? 

Mr. HERTZ. I think what we can learn from the science groups 

is the importance of strategic planning, certainly that is important 

in a technological environment. I think we can also learn that as 

we are doing routinely at NIST these days, we focus each year on 

activities that need startup and activities that have also reached 

their useful life and to use that as an internal renewal process, and 

I think other organizations could benefit from that. 

Mr. HORN. Mr. Bailey, I was most interested in your testimony. 

On the first page you note there are three agencies you feel were 

early leaders within quality management within the Federal Government. One is the Department of Defense, another is the IRS, 

and the third is the Tennessee Valley Authority. 

Well, I am fascinated on the IRS and the Department of Defense 

in this sense, that we have on the books the Chief Financial Officers Act and a requirement that all Federal agencies give us a balance sheet by the fall, essentially, of this year, and the two agencies that we have known for 5 years will not be able to give us a 

balance sheet are two of your three; namely, the Department of Defense and the IRS. 

Can you explain how they can be conducting quality management work and not get at the basic problem, that they can’t 

produce a balance sheet and there is no hope they will produce a 

balance sheet this year? 

Mr. BAILEY. I can’t answer that directly. I guess part of the comment was that they were early leaders, and I think you can learn 

from some of their less than successful implementations, perhaps, 

and that is certainly one of them. 

One of the key concerns or criticisms of total quality management, or TQM, has been the fact it never delivered, in many instances, the bottom line results, and there are key reasons for that, 

and if you learn from those, you are better off in correcting your 

mistakes and going forward. 

Again, the IRS was an early leader; however, we noted that they 

are last in the American Customer Satisfaction Index. Of course, 

that is a little bit unfair in one sense because that is measuring 

the customers of public sector companies as well, so maybe it is 

36

hard to envision yourself in the mix with all the other folks who 

are looked at in that index, but then again maybe not. 

But I think there is really an opportunity in those areas that you 

mentioned to really improve upon what they have started. At least 

they have an appreciation for what it is they need to be doing, but 

there are a lot of opportunities, especially in those agencies, that 

need to be worked on. 

Mr. HORN. Obviously, it leads me, and some of the testimony 

leads me even further in the direction that are we taking the easy 

tasks for total quality management and avoiding the tough tasks? 

I mean, I am not against incrementalism, this is maybe the best 

way to go, and I am not knocking that, I am just saying, are we 

just doing the easy stuff? 

Mr. BAILEY. I think that is a fair statement. There is always a 

tendency in the private and public sector to go after the so-called 

easy ‘‘low hanging fruit’’ and I think that is appropriate to do if it 

is hanging there. However, I think this avoids actually bellying up 

to some of the hard but important breakthrough changes you need 

to do, some of which Harry talked about. The actual focus on a 

strategic management of the overall quality and performance effort, 

is, I think, one of the failings of many of the applications of quality 

management techniques, both in the public and private sector. 

Mr. HORN. The rest of the questions are to both of you, now that 

I have gotten away with those two. I am curious, what are the key 

factors that really make total quality management work? We have 

a lot of experience; now we have had it on the small and the large 

problems. If you do nothing else with the total quality management 

effort, what is the absolute essence of doing something with that 

effort? 

Mr. HERTZ. Well, several things. First, I think leadership commitment is an absolute necessity. Without the commitment of top 

leadership of an organization, what we find is that there are fragmented efforts, frequently not tied to the overall strategy of the organization, and that generally leads to failure. 

The second is a lack——

Mr. HORN. Why don’t we take them one at a time? Give me an 

example of where you think leadership is an absolute key and 

where you have seen it failing and where you have seen it succeed 

with leadership commitment. 

Mr. HERTZ. I think where it certainly succeeds is with the 

Baldrige Award winners. Where it fails is from many of the companies we hear from. We conduct four regional conferences each year 

in conjunction with the Conference Board, at which Baldrige winners share their strategies. I would say the most commonly asked 

question at that conference from the audience, every time, and I 

was at one in Chicago last week, is, I can’t get my leadership to 

buy in, we are floundering, how do I turn around and bring my 

leadership on board? 

What we are seeing is incremental improvement in pockets of the 

organization and it is not focused on the organization as a whole. 

Mr. HORN. Since you are the administrator of the Baldrige 

Award, why is it that the Baldrige Award has no relationship to 

governmental processes? Originally, it was designed from the priVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00040 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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vate sector, the profitmaking sector. Now how much of the Baldrige 

Award criteria can we really translate to Government processes? 

Mr. HERTZ. I think the President’s Quality Award shows we can 

use the criteria basically, totally, as is, in the Government. Indeed, 

if one looks at the State award programs that are based on 

Baldrige, many of them are open to State agencies. They are open 

with the exact same criteria, no rewriting of the criteria, and there 

have been winners at the State level that are State agencies whom 

are education systems within States. Police barracks within States 

have won them, so that there are ample examples now of State 

agencies that have adopted Baldrige successfully, as is. 

Mr. HORN. And we look forward to their testimony this morning, 

of showing us how it is done. 

What leads to the failure of total quality principles? You have 

mentioned leadership has to be there. What else is an absolute essential? 

Mr. HERTZ. I think another absolute essential is a focus on results. I think the failure in a lot of early attempts at quality management was a total focus on process, find a process that could use 

improvement, incrementally improve every process that can be improved, without ever focusing on those that really impact results or 

strategic direction. I think what we learned over time is if you divorce your quality management or quality improvement from your 

organizational management, you tend to get incremental improvement of processes at local levels without ever tying to the overall 

organizational strategy. You can improve processes that don’t particularly impact the organization’s overall performance. 

Mr. HORN. As you know, we have put substantial interest in the 

Government Performance and Results Act. How would you tie 

GPRA, as they call it—and I will call it the Government Performance and Results Act. How would you tie that to the total quality 

management effort? 

Mr. HERTZ. I think the intent there actually succeeds and ties it 

very closely because there is a requirement for both performance 

measures and strategic planning. The intent, obviously, to tie key 

performance measures to strategy for the organization, and I think, 

as organizations do that, they will be successfully implementing 

quality management. 

Mr. HORN. Hopefully, the results part would include some realistic measurable criteria and I agree with you completely on leadership, but I think, second, you are absolutely right, that is the most 

difficult situation, how do we know we have accomplished that and 

is it easily recognizable by people engaged in the effort? Because 

if they are engaged and we haven’t accomplished something, that 

just leads to frustration after a year or 2 year’s work. Any other 

things that are absolute essences here? Leadership, results, orientation? 

Mr. BAILEY. Let me say, Harry and I didn’t compare our lists, 

but he listed, in my order, No. 1 and No. 2, leadership and results 

orientation. Those are 2 of the 11 characteristics that Harry mentioned in his testimony. The third one I usually call out in my list 

is customer-driven quality, or maybe constituent-driven quality 

might be the particular buzz word here. 

38

You need the leadership at the top. You need to focus on real 

measures, but you need to be doing it in an environment that is 

fulfilling, getting better performance for those customers or those 

constituents. You need to always have to focus on who it is you are 

serving there, so I think those three are the 3 of 11 that really 

stand out. 

Mr. HORN. And that is certainly the same as the private sector 

in the sense of the customer is always right. You take it, Target 

stores and others that have made a fortune because they trust the 

customer, even if the customer comes in to bring them goods to 

hand back from some other store that is not one of their chains, 

that wins them friends. 

Now when we look at these efforts, what leads to the failure of 

the total quality principles in an organization, is it simply the reverse, the lack of leadership, lack of results orientation, and the 

lack of looking at the needs of the customer, internally and externally? What else happens? 

Mr. HERTZ. I think the other key point to failure is a lack of longterm commitment, commitment for a year or two, achieving some 

incremental improvement and then walking away from the effort, 

the lack of strategic vision, the lack of long-term commitment, and 

that is particularly challenging, obviously, in any organization 

where leadership changes with frequency. 

Mr. HORN. Could you cite me a few examples in Government 

over the last 20 years where there has been an effort, a buzz word 

approach, I might say, and nothing much has happened, and people 

are standing around saying, this too shall pass? 

Mr. HERTZ. I am not sure I am an expert on the history of buzz 

words. 

Mr. HORN. I am thinking you may be too young to remember 

PPBS, in terms of budgeting and that kind of thing. 

Mr. HERTZ. I don’t remember that. I remember MBO, I remember ZBB, and I am afraid that TQM has three letters that have 

much the same potential. And I think that is, among other things, 

why we have actually in the Baldrige criteria departed from the 

word ‘‘quality’’ and focused more on performance excellence and 

performance management, because that is really what quality management is about. It’s about managing the performance of the overall organization. 

Mr. HORN. Now, when we discussed the Government Performance and Results Act, we can talk about how you focus on results, 

you all agree to that. But many employees feel they are simply 

bound up by a wide range of processes. Now, how do we move from 

processes to results? Does TQM always do that? 

Mr. BAILEY. One thing you do is in the simplification activity. If 

you are bound up by all these processes, odds are that you have 

not mapped out these processes into the overall system that you 

currently have, the ‘‘as is’’ part of how you are operating, and then 

ask yourself the question of which of the processes are value-adding, and which should we simplify or totally eliminate, so you are 

looking at the whole system of processes. 

I think there is a lot of activity we have seen recently that goes 

after that simplification. In the private sector we see it a lot, and 

in the public sector, at all levels, we have seen simplification activiVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00042 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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ties on one or more of the important processes, and that breaks 

free the employees to really contribute. They know what is important in terms of the key processes, they know what is important 

in terms of the key results, they know how to contribute, and they 

don’t feel bound up by all the extra stuff that isn’t value-adding. 

Mr. HORN. Since you administer the Baldrige Award, Dr. Hertz—

and there are other awards, I know, that are offered there; not everybody who does a good job can get one of those awards—what is 

the incentive to do anything, and what do you find the incentives 

are as you talk to people off the record? 

Mr. HERTZ. I think the incentives are not to win an award. I 

think the award, from our perspective, is a means to getting a message out to sharing best practices, to putting those in front of organizations. But the real rewards are those from improved organizational performance that come from use of the criteria. 

And just to give you some numbers, we typically have about 30 

applicants per year for the Baldrige Award. There are about 800 

applicants nationally for Baldrige and State award programs, but 

last year we distributed 150,000 copies of the criteria, State award 

programs distributed another 90,000 copies of the criteria, so approximately a quarter of a million copies. There were another 

70,000 downloaded off our web site on the Internet. 

So the use of the criteria far exceeds the application for award 

programs, and indeed there are many companies in the United 

States that are now using the criteria in internal divisional improvement efforts where divisions within the company are using 

the criteria as a basis for learning and as a basis for sharing, without applying for the Baldrige Award. 

Mr. HORN. Dr. Hertz, are you involved with the administration 

of the President’s quality awards program? 

Mr. HERTZ. I am not involved with that. It is administered 

through the Office of Personnel Management. However, many of 

the volunteer examiners and judges for the Baldrige Award also 

serve on the President’s Quality Award frequently after service on 

the Baldrige Award program, so they bring the expertise with them 

when they move to the President’s Quality Award. 

Mr. HORN. I don’t think we have a witness here from that group 

this morning. 

And there is the Quality Improvement Prototype Award and 

Presidential Award for Quality. The reason I raise that, in the Department of Defense testimony, they seem to say since the inception of the program, DOD units have earned 59 percent of the 

Quality Improvement Prototype Awards and 83 percent of the Presidential Awards for Quality. I don’t know if that is good or bad, 

frankly, at this point. I take it that it’s good. 

I mean, I am worried about both Baldrige and these awards 

when you have got the small, little effort going on that might be 

a superb effort that maybe they can’t put it in fancy words that fill 

out the form, and that is what I worry about in the private sector, 

and a good part of Government, that there are a lot of people out 

there, we should note, even if they don’t have the time to fill out 

the form, which is the attitude of some people in this world, they 

say, let’s get the job done. 

40

Mr. HERTZ. We actually provide guidance on use of the criteria, 

and part of that guidance is that we advise them, when you are 

first starting, don’t fill out a written application. There is a lot you 

can learn through doing a self-assessment, that is a fact-based self 

assessment, without writing an application, just outlining your 

strengths and opportunities for improvement, not doing any scoring, and prioritizing the opportunities for improvement and building on them. 

Mr. HORN. What is the most difficult of the Baldrige criteria you 

have in terms of translating that into governmental total quality 

management? 

Mr. HERTZ. I am not sure that I would say any of the criteria 

themselves are the most difficult. I think what is most difficult for 

all organizations, including Government, is the linkage issue, how 

to link strategy to process, to results, to information, to analysis; 

so how to take the seven categories of Baldrige and perform the 

key linkages so that your strategy is tied to your key processes, 

your key measures are tied to your key processes, and your analysis is tied to those key measures. 

Mr. HORN. Since you both are the lead-off witnesses, we expect 

you to be able to answer the next question easily. What is your assessment of the willingness of Federal employees to get involved in 

quality improvement efforts, as opposed to private sector employees 

to get involved in quality improvement efforts? Do you see any difference, in your experience, looking at this now for several years? 

Mr. BAILEY. Well, we haven’t really discerned any real differences in participation or motivation for quality efforts on the 

part of Government employees compared to those in the private 

sector. Actually, we think the two are remarkably the same. We 

have seen great success stories with individuals and individual 

groups in both areas, private and public. We have also seen places 

where it has floundered. 

When we get down to the individual, that is where we find more 

of the success stories that are actually out there. With this growing 

impetus for adopting quality methods in the public sector, we see 

patterns of adoptions are very similar to the experiences we are 

seeing in the private sector. Change happens when individuals in 

small groups get excited about it and actually start pushing it. You 

can call them zealots or champions or whatever you will. There are 

many people out there doing that within the Government agencies, 

and this is why I said I am very optimistic about the future of 

quality efforts. Many of the folks do get together at the conference 

I mentioned that is happening next month. 

Mr. HORN. You would say then the Government is no less enthusiastic than the private sector? 

Mr. BAILEY. If we talk about Government integrated across all 

the levels, I would say that. 

Mr. HORN. Where have you seen the most difficulties in either 

the private sector or the Government sector, at any level? What do 

you think has been the one overwhelmingly sort of strategic factor 

that has affected what happens in that program? 

Mr. BAILEY. Again, it comes back to leadership. As far as strategic factors, you have the leadership and the linkages. I think the 

other part of cleaning up the multitude of processes that are out 

41

there is, in a sense, you get out of the way of individuals actually 

being able to make contributions within that overall system. They 

see the road map, they see the performance they want to ultimately achieve as an organization, and with a simplified system of 

key processes out there, that paves the way for them to make the 

achievement they need to make. They are making them now even 

with, you know, bogged down processes, unclear systems, and noncustomer-focused measures, and they could do so much more if you 

clear the way with better strategic planning. 

Mr. HORN. Any comment, Dr. Hertz? 

Mr. HERTZ. The only thing I would add is drawing from our revised framework for 1997, in which we have three categories we 

call the leadership triad, that consists of leadership, strategic planning, and customer and market focus. And I think the most important aspect of a program succeeding is the commitment of leadership and the focus of leadership on strategy, communication of that 

strategy to the organization, and the focus of leadership on the customer and the markets that the organization serves. If the leadership isn’t focused on the customer and markets, then the rest of the 

organization doesn’t. 

Mr. HORN. Where do you find most of the initiative comes from 

in the typical plan? Is it top down from the leadership? Is it a 

group of employees that think they have developed a better type 

of mouse trap in their approach? What do you find? 

Mr. HERTZ. I think it is both; it is a leadership commitment and 

employee empowerment that goes with it. 

Mr. HORN. It is a chicken and egg question, I understand that. 

But what has been your experience in both the private and public 

sector as to whether or not they say, hey, it’s about time our agency did something? Is that from the employees or leadership? 

Mr. HERTZ. I think it has happened both ways, and it varies from 

organization to organization. I think what is clear, though, is 

whether it starts with leadership or starts with employees, if it 

doesn’t then go from the employees to the leadership, it won’t succeed. So in the end, it is what we have been saying: Leadership 

commitment is absolutely necessary. 

Mr. HORN. We have in a lot of the written testimony good reports 

on the involvement of employee unions with management in doing 

some of the total quality management efforts. We had a bill before 

us in the House last year that the unions heavily opposed, and that 

was to encourage quality circle-type operations in business across 

the country, and nobody up here that put that together thought 

that they were doing anything to disturb unions, but the unions got 

very disturbed. 

Now, what can you tell me about the role of unions in the private 

sector in these efforts, and what can you tell me about the role of 

governmental unions in the public sector on these efforts? 

Mr. HERTZ. I can’t say much about unions in the public sector. 

I do know more about the private sector, obviously, because of the 

Baldrige Award. I do know we have Baldrige Award winners and 

companies that have adopted those principles that are unionized, 

and companies that are nonunionized, and some that have union 

facilities and nonunion facilities within one organization, and they 

all seem to function and adopt and use and cooperate and succeed. 

42

Mr. HORN. Mr. Bailey. 

Mr. BAILEY. We are interested in this area, too, and we have provided some testimony based on some of our team act-type studies. 

We get concerned when we see in the press articles that say why 

teams fail, and, of course, there is a union aspect to that, and other 

aspects as well. We want to try to facilitate, if you will, the allowance for getting barriers out of the way to have folks work in partnership, in order to tap into the great employee base of individuals 

and teams working together. To whatever extent we can help foster 

that, we will do that. 

Mr. HORN. Well, this can stand, and the question I have heard 

everybody mention that has ever been in management, whether it 

be total quality management or just any other new idea, how do 

you overcome organizational and human resistance to change, and 

do you find this is a major problem in success of some of these various projects? 

Mr. HERTZ. One of our Baldrige Award winners and good friends, 

Jerry McQuaid of Corning, always tells the story of the high school 

dance. He said there are those who are at the high school dance 

who, when the music starts playing, are the first ones on the floor 

dancing and eager. There are those who are on the corners or the 

sides of the high school gym, who need a little persuasion and then 

come and join the dance. And then he said there are those out in 

the parking lot who can never even be brought into the school, who 

are out there smoking, drinking, I think is his term, and never 

come in. And he said, well, maybe those just will never be able to 

make the change, and you have to work with those who can change 

and will change, and others just have to be dropped out. 

Mr. HORN. Is the conclusion of that story that we ought to move 

this operation to the parking lot? 

Mr. HERTZ. I think it is that we focus on those in the gym. 

Mr. HORN. Maybe we are making a mistake, remembering my 

high school dance. 

Mr. BAILEY. I will just add to that that it does sound in a sense 

like an oxymoron, ‘‘constant change.’’ It is what all organizations 

have to deal with. So those that are resistant to change need to 

have some overall fundamental structure there that is a constant, 

at least in terms of a framework, against which they can implement widespread changes. Otherwise the change after change after 

change that people are resisting is just floundering against not 

knowing what direction you are going for, what results you are 

going for, and all of that. 

It is an interesting problem, one we in ASQC have wrestled with. 

Our name is the American Society for Quality Control, and some 

folks in various industries, like health care and education, look at 

that and say that control is about the last thing they need; they 

need something a little bit more change, breakthrough-type stuff. 

I think you can thrive on both control and change, and, in fact, just 

as a side point, we are changing the name of our society to the 

American Society for Quality, effective July 1st. 

Mr. HORN. Very good. 

One of my favorite corporations in California, a very progressive 

corporation, did a study about 10 or 15 years ago on the corporate 

culture in their corporation. They found there wasn’t one corporate 

43

culture, there were nine different corporate cultures, based on nine 

different operating divisions, and the fact that three companies had 

been merged together, there was a culture carried over from all 

three that came to the dance, if you will, in the merger. And I just 

wondered, since the whole business of the culture of an organization seems to either aid implementation or cause problems for implementation, how do you suggest we deal with that? 

Mr. BAILEY. The first step is identifying what the culture or cultures are. That is definitely a good step. And then it comes back 

to the doorstep of leadership to understand that their job is not just 

to manage for the next quarter or the next half a year, or the next 

stockholder meeting, if you are talking about the public sector, but 

they have a long-term commitment to manage, and that a key part 

of that is the culture. 

So, again, you have to identify the few things, whether it is in 

terms of defining the principles that you are going to manage from 

or the environment or culture you are going to build, against which 

all this constant change is going to be able to be rolled out. It’s important to identify and build upon the strengths you find in the 

cultures that exist and somehow eliminate the barriers that are 

there. 

Mr. HORN. Dr. Hertz. 

Mr. HERTZ. I think I would pretty much agree with those comments. 

Mr. HORN. Let’s say in terms of an organization that is unionized, what is the best way to handle that, just bring the union leadership in from the first time you have a glimmer of thinking you 

are going to do something in this area or what? 

Mr. BAILEY. That would be consistent with the partnership mode. 

Mr. HORN. Has that usually worked? 

Mr. BAILEY. Actually, I can only speak within DuPont. That generally works very well. 

Mr. HORN. One of the underlying assumptions, as I look at all 

this testimony, is the usefulness of teams. However, I think teams 

are probably not appropriate for every context or problem, yet they 

are advocated as sort of the universal mantra, if you will. When is 

it appropriate to use teams and when is it not appropriate to use 

teams? 

Mr. BAILEY. I think that the answer probably is dependent on 

the culture of the public or private sector entity you are looking at. 

In general, I think that a lot myself in terms of we need to put another team on this. There are some cultures that don’t have basically a management structure at all, they do everything by teams. 

They don’t even have the organization chart, and with the culture 

there they work really well. I know one of our Delaware-based companies, Gore and Associates, works real well that way. It is a 

bunch of small sites with very little organizational structure, other 

than knowing where they are going and getting teams together, 

when necessary, to do that. They recognize they don’t need them 

all the time. 

But you are right. Sometimes teams can be nonempowering with 

respect to the individuals that are on the team that want to provide their own creative forces to do things, so you need a proper 

44

balance. There is no quick answer to that question. It just relates 

to the culture you are dealing with. 

Mr. HERTZ. I think one of the biggest issues is also to learn when 

it is time to end the activity of a team. Not all teams need to be 

teams forever. There are some that have a problem, solve it, and 

move on. So I think one of the big issues is when organizations become overteamed and don’t know when a team’s activities have 

reached the end of their useful life. That is why many teams develop team charters to begin with, that define the goal, and once 

the goal is reached, finish the activity. 

Mr. HORN. Is that the understanding in successful efforts, that 

you don’t keep the team going, or you keep an overall monitoring 

group going to make sure this progresses? 

Mr. BAILEY. I think the most successful organizations have two 

types of teams, those that are longer-standing teams and that are 

responsible for ongoing processes and those that are there to solve 

a particular problem and then move on, and the charters are very 

different. 

Mr. HORN. The word ‘‘constant change’’ came up here. At some 

point don’t employees get a little weary of hearing about constant 

change or feeling it is constant change? 

Mr. BAILEY. Absolutely. These are trying and tough times for organizations, in terms of staying competitive, both in the public and 

the private sector, and it can be disheartening at times to see all 

this change. I think, again, where you see it most is where the organization, be it public or private, hasn’t at least put forth principles against which they are going to manage the enterprise that 

are constant. Also, the overall constant framework from which people can see where the ‘‘constant change’’ of each step makes sense: 

‘‘Oh, I know why we are doing this, it relates to this overall piece 

of the framework we are trying to move towards, and it supports 

the principles we are for.’’ So you need to lay that top level framework there, otherwise it is going to be totally frustrating. 

Mr. HERTZ. And I think this is where the system’s perspective, 

again, comes in, critically. Change has to be related to vision and 

values of the organization. Those values are constant, and that vision has to relate to strategy. If change then ties to strategy, then 

the purpose of ongoing change is visible and understandable. When 

change becomes an end in itself, then it obviously leads to frustration. 

Mr. HORN. Along that line, often there are long lead times between change and the results, as we know. How do you keep the 

employees motivated during these long lead times? 

Mr. HERTZ. The way we encourage organizations to do it is look 

for milestones along the way, so that progress can be tracked, so 

there are measures that show that the organization is moving in 

the right direction, and so that all in the organization feel a sense 

of accomplishment along the way. 

Mr. HORN. And this is where leadership really has to come in 

and also self-leadership of the employee group, the union group, 

and so on. 

You both mentioned focus on the customer, and I think that is 

obviously correct. The big problem is how do you get the customer’s 

input into the quality process when the customer, in the case of the 

45

Federal Government, is we, the taxpayers? What is the best way 

you have seen to find out what the customers want? 

Mr. BAILEY. Well, there are plenty of ways. I think many of the 

customer information gathering techniques that are available, regardless of whether you are in the public or private sector, do apply 

here. You have to define the customer to begin with, and whether 

you are talking about meetings, focus groups or surveys, the 

quicker the better. Pulse surveys get a focus on what folks are really thinking and where we ought to be going. I think all those apply 

very well, and I think they break down only when you don’t know 

what it is you are going after, customer input when you are going 

to be doing the surveys. 

Mr. HORN. Are you familiar with the Oregon benchmark approach to deciding whether they are being successful in the implementation of various laws and programs? 

Mr. BAILEY. No, I am not. 

Mr. HORN. We will wait for the State officials. I am sure they are 

aware of it. 

And obviously, the question is, there is the result of the program, 

and when you have achieved the basic goal in that program versus 

the quality management approach, which might be steps along the 

way, and what is measurable, have you found in companies that 

there have been really accurate surveys of the employees in the 

sense of either hiring a professional polling organization that would 

go get a random sample that is legitimate, or is it left open to here 

are a couple questionnaires and throw them in the suggestion box 

or whatever? What have you found is the successful way to elicit 

that opinion as to the immediate internal clientele in an organization and the external clientele being served by that organization? 

Mr. BAILEY. We find both approaches work well, and probably 

both approaches are needed, because one approach doesn’t necessarily get you everything you need. The more formally structured 

survey that has all the statistically valid sampling and analysis criteria associated with it gives kind of a stand-back snapshot of what 

the customers need or want. And the flip side is some of these very 

quick data-gathering activities that may not be as scientific, but 

are quick, get a pulse of what is happening right now. And they 

really provide a gut check on today’s thinking about where it is we 

are going. I think both of those are definitely needed. 

Mr. HORN. Any comment, Dr. Hertz? 

Mr. HERTZ. Yes. Leading organizations use both approaches, and 

I think that the approaches are as valid in the public sector as they 

are in the private. 

I know, for example, in our own program, we have an annual improvement day. We have an annual improvement survey that goes 

out to all our leading customers to get their input into the ongoing 

improvement of the program and the criteria. And we also have a 

feedback survey, for example, from our primary customers, the 

award applicants, that each of them get 30 days after they receive 

their feedback report. 

Mr. HORN. With the emphasis on the team approach, is the reward system primarily to the team as a whole, or is it the team 

leader or people nominated by the team? What is the best way to 

use that reward system? 

46

Mr. HERTZ. I think it’s all of the above. 

Mr. HORN. Well, in one firm it’s usually going to be one or the 

other. Or they give things to the whole team and then take out a 

few people within the team, or what? 

Mr. HERTZ. In one firm, generally there will be a multiple recognition system, one that is for teams as a whole, one that is individual performance, and one that is company or corporate performance that rewards profit-sharing or gain-sharing to all the employees. So it’s generally a combination. 

Mr. HORN. How about in Government, what should it be? 

Mr. BAILEY. Well, we’ve seen a mix of both work. But one of the 

things I’ve seen that, and I think this may even apply more for the 

private sector than the public sector, but I’ve seen it in the public 

sector; is to act almost like ‘‘virtual teams.’’ It’s hard to really get 

your hands on who the team members are. 

Mr. HORN. Translate the virtual team for the noncomputer 

world. 

Mr. BAILEY. Virtual teams are nothing more than, in a sense, 

there’s a task that—let’s talk about the short-term teams, ones that 

there is a specific problem out there; there is a problem to be 

solved. The problem statement is well defined by someone, maybe 

a so-called team leader. The goals of where we want to get to and 

the measures and all that are well defined, and it’s somewhat understood who the key players ought to be to work on that particular activity. But they don’t particularly come out and say, we’re 

going to charter a team that has five folks or seven folks on it, and 

these specific names are expected to do all this stuff. No one outside that box or five or seven are supposed to help them and people 

inside the box of five or seven folks are the ones that are fully responsible. 

What we find is, once the whole organization knows the problem 

that needs to be solved and once they know who the responsible 

single person is to make sure it gets resolved and who the accountable few are, there are other folks in the organization that want 

to be informed about it, can provide input or need to be consulted 

about it, and you find that the actual solution of a problem is by 

a team. But the team, if you see everyone who has participated on 

it, is a large collection of folks, because they’ve learned by spreading ideas out through the electronic mail and the like. So there’s 

a wide variety of folks involved. 

So the challenge, coming back to the reward piece, is, oftentimes 

you have a large collection of folks that have been involved in it, 

and when you try and reward a team, it is very tough to decide 

where you draw the line, given you don’t have this box of seven 

people that are on the team but, instead, a large number of folks 

that are actually participating in the solution. 

So that’s what I mean by virtual teams. 

Mr. HORN. Besides the plaque, besides the recognition, besides 

the feeling good with some of your colleagues and envied by others, 

should there be compensation awarded to those on the team, primarily employees, not executives, but could be executives occasionally—they take care of themselves, I found, usually—I mean, 

should there be flexibility where there is monetary compensation 

that is built into the payroll, not just the annual bonus, which I 

47

regard as sort of nonsense, I would rather reward the people with 

something that stays in there for their effort. 

Mr. BAILEY. I think some of that should be built in. It’s very important to note, however—and this is true in both the private and 

the public sector—if you’re talking about what’s going to be the biggest motivator for getting folks more on board or contributing to 

the quality improvement effort, it’s not going to be monetary rewards, believe it or not; it will be other things such as simple recognition of a job well done. Some people will trivialize plaques and 

all, but that can be meaningful things like dinners out and extra 

vacation, that kind of nonmonetary stuff. 

But just the recognition itself is really what scratches the itch of 

most folks. They want to know that they’re in an organization 

where they’re contributing, and that they are recognized that 

they’re contributing, and that oftentimes is all they’re asking for, 

not the extra dollar bill in their wallet. 

Mr. HERTZ. I think peer to peer recognition is an important part 

of that also. In our own office, we’ve implemented something as 

simple as what we call than Q notes which one employee can give 

to another one for thanking them for doing something above and 

beyond the ordinary, to help them in accomplishing their tasks. 

Mr. HORN. It’s a good idea. I remember I had one vice president 

of the university who had won awards from the Nation, the State, 

and everything else, gold medals, so forth, and the reward that 

meant the most to him was the plaque from the associated students for being an outstanding professor, despite his administrative 

career, teaching career, and so forth. So we never quite know what 

touches people the most. 

Let me move to one or two last questions, and then I thank you 

for bearing with me on this. 

Training, obviously, is a major thing to face up to here. In some 

organizations in the Government, I have seen there has been a lot 

of training, but nothing has happened or very little has happened. 

With a scenario like that, what is wrong? And how do we go about 

tying the training to what we are trying to do in a total quality 

management effort? 

Mr. BAILEY. I think you answered your own question. The reason 

why it goes wrong is that there is no clear tie-in. 

I’ve seen too many instances, in both the private and the public 

sector of sheep dip type training. It’s just like, here’s the training 

of the day and the answer to all the solutions; we don’t know where 

we want to go and we don’t know how we’re going to measure it, 

but if we train everyone on this latest fad, if you will, that will just 

solve all the problems. If it’s not connected to the overall framework of where you’re going, and if the employees can’t say why do 

they even care about being in this training and how are they going 

to use it to go toward those strategic goals you have, then it’s just 

doomed to failure. 

So the idea of just-in-time training is definitely a much more—

you know, worthwhile and rewarding experience for the enterprise. 

Mr. HERTZ. I think there are several things. One is to relate 

training to key processes and key strategies and try to tie at least 

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ed in order to accomplish a strategy, to offer that training and 

make it clear what the relationship of that training to the accomplishment of those strategies or improvements are. 

The other is to try to implement some sort of effectiveness measure of the training, and that’s something that’s still very much at 

the forefront and difficult to do. But there are organizations that 

are trying to correlate improvements in a key strategic measure 

with the training that’s being offered. 

Mr. HORN. Can the quality management approach work in an organization of any size? And where has been the most success, in 

small organizations or small parts of a large organization? What is 

your feel of that? 

Mr. HERTZ. I think it can work in organizations of any size and 

has worked in organizations of all sizes. I think implementation obviously is easier in smaller organizations, because it can be done 

more informally; it can be done through leadership personally 

touching each of the employees. There’s personal contact with each 

of the employees, which doesn’t occur in a larger organization 

which requires a cascading system. But it’s been implemented in 

both. I think results can be achieved more rapidly in a smaller organization. 

Mr. HORN. Anything to add to that, Mr. Bailey? 

Mr. BAILEY. Yes, I’d add to that. Where I’ve seen it work or not 

work in small organizations and where I’ve seen it work or not 

work in big organizations ties yet again to the overall framework 

you have in place. You can have a small organization of 50 folks 

working on something, and the CEO can in fact reach out and 

touch all of them. That’s great. But if the leader don’t set forth 

what is going to be the constant framework for change and what 

the principles are and really identify that as part of the culture 

against what you’re going to do all these constant changes and improvement, then it will fail even in a 50-person organization. I 

think it becomes more vital, obviously, with large organizations to 

have that framework and those principles in front of you. 

Mr. HORN. Last question: You’re familiar with the Hawthorne 

case and the famous Harvard Business School litany of cases. The 

question comes up: As you know, the conclusion of that was, it 

didn’t matter what we do, productivity increased, and that was because it was shown that we cared about people. 

How do we differentiate total quality management from the 

Hawthorne approach, which said, if you pay attention to people, 

good things will happen? 

Mr. BAILEY. Interestingly, I think back then there was a system 

where you basically were constant all the time, and then you did 

one new thing and things improved, and then you did another new 

thing and things improved again. 

Now we’re in a world with a different ratio of constancy to 

change; there’s just dramatically more change in all types of organizations. So there’s so much stuff going on that sometimes you 

wonder whether you’re being attended to at all or being overattended. It’s a difficult situation, and I think this leads to the ‘‘fedup’’ factor. 

How many different things in a row do you try to pay attention 

to get improvements? If the workers are not seeing the measures 

49

that they’re supposed to be working toward improving, and if those 

aren’t listed right on top for them to always look at as the constant 

thing along with the framework, they’re eventually going to allow 

themselves to just turn completely off, and I think it will be an opposite effect. 

Mr. HERTZ. I think it’s an issue of good things happening and 

right things happening. I think good things happen when you pay 

attention to people, right things happen when you pay attention to 

people, pay attention to strategic direction, and pay attention to 

your customers and markets. 

Mr. HORN. And wrong things happen when you pay attention to, 

people get their hopes up and you can’t make the tough decision 

that solves the process problem or the results problem. It again 

gets back to leadership. 

Well, I thank you gentlemen for sharing some of your ideas with 

us. And I don’t know if you are going to stay, but if you get any 

other thoughts going back and forth on the plane, or the automobile in your case, why, let us know and we will put it in the 

record at this point. 

Thank you so much for sharing your knowledge with us. 

Mr. HERTZ. Thank you. 

Mr. BAILEY. Thanks again. 

Mr. HORN. We are now going to the second panel. 

OK, I think we have everybody there. If you don’t mind, just 

stand and raise your right hand. 

[Witnesses sworn.] 

Mr. HORN. All four witnesses affirmed. 

We will just go down the line starting with Mr. Joe Conchelos, 

vice president for quality, Trident Precision Manufacturing, Inc. 

Or does the president want to testify first? 

Mr. CONCHELOS. No. He is, unfortunately, not here today. 

Mr. HORN. OK. Very good. Then, Mr. Conchelos, go ahead. 

STATEMENTS OF JOE CONCHELOS, VICE PRESIDENT FOR 

QUALITY, TRIDENT PRECISION MANUFACTURING, INC.; ROSETTA RILEY, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 

SIRIUS 21, INC.; REAR ADMIRAL (RET.) LUTHER SCHRIEFER, 

SENIOR VICE PRESIDENT AND EXECUTIVE DIRECTOR, BUSINESS EXECUTIVES FOR NATIONAL SECURITY; AND LAWRENCE WHEELER, VICE PRESIDENT, PROGRAMS SYSTEMS 

MANAGEMENT CO., ARTHUR D. LITTLE, INC. 

Mr. CONCHELOS. Well, thank you, and good morning, Mr. Chairman. I want to thank you for inviting Trident to give our testimony 

on our quality journey today. 

Let me begin by offering a brief introduction to Trident. Trident 

Precision Manufacturing is a contract manufacturer of precision 

sheet metal components at electrical mechanical assemblies. We 

are located in Webster, NY, which is a suburb of Rochester, NY. 

Trident began operations in 1979 as a three-man facility and today 

employs over 180 people. 

In October, we were awarded the 1996 Malcolm Baldrige National Quality Reward. We began our total quality journey in 1988, 

and when our CEO, Nick Juskiw, attended a symposium explaining 

total quality management, he realized this was the structure that 

50

his young organization needed to grow and remain competitive into 

the next century. 

As a young company, we operated under a business strategy 

known as crisis management. The strategy was so well developed 

and ingrained in our society, we even had a motto: ‘‘We make it 

nice because we make it twice.’’ We knew this was not the way to 

run a successful business. 

The entire management staff of 10 was trained in the principles 

and philosophies of total quality management. That team then 

spent the following 14 months developing Trident’s strategy entitled ‘‘Experience in Motion.’’ Although our strategy is based on the 

Xerox Corp. model, we benchmarked several other organizations, 

including Eastman-Kodak Co., IBM, Tennant Corp., and Corning. 

We were able to take the best of the best and incorporate them into 

our strategy. 

The development and implementation of ‘‘Experience in Motion’’ 

has allowed us to become a customer-focused organization in a continuous improvement atmosphere. We understood from the outset 

that our employees were the source and foundation of our quality 

leadership and competitiveness. Our employee involvement is encouraged through a number of strategies, including our Total Quality Round Table, where employees are asked two questions: What 

is working? And what is not working at Trident? 

Management and employees have developed a partnership 

wherein the employees have the opportunity to develop and implement plans that directly affect their work life. This philosophy and 

plan to Trident employees can be summed up in one phrase from 

our mission statement. We utilize our experienced individuals, 

blending their creative talents and personal dedication to remain 

competitive, satisfying our customers’ needs, and fulfilling the expectations of our employees. 

I would like to share with you now one success we’ve achieved 

in the area of human resources. At the beginning of our journey, 

one metric we selected to monitor was employee turnover. We 

wanted to know what effect the processes we were implementing 

were having on employee satisfaction. 

In 1988, we found our employee turnover rate was 41 percent. 

We felt somewhat comforted by this result since our local industry 

turnover average was 52 percent. But we still wanted to know why 

we were losing so many people each year. We asked an employee 

team to investigate the problem. We wanted them to identify the 

root cause and develop a corrective action. Their answer was very 

frank and direct: Management did not care who they were hiring, 

so long as they were breathing and they had two hands. 

They suggested we revise our hiring practices and develop a new 

employee orientation process. We implemented their suggestion, 

and, in conjunction with several other facets of our strategy, we 

have been able to maintain less than 5 percent turnover for the 

past 5 years. In the first quarter of 1997, our turnover rate was 

1.2 percent. 

We’ve established our key business drivers as supplier partnerships, employee satisfaction, operational performance, customer 

satisfaction, and shareholder value. We have developed several 

metrics to measure and determine our progress for each driver. 

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I would now like to share with you some of the accomplishments 

we have been able to achieve through our total quality management strategy. 

Our corporate quality rating, which is an aggregated rating to 

our delivered quality to our customers measured 97 percent 

through 1989. Through many of our process improvements developed by our employees and the use of our statistical techniques, we 

have been able to achieve and maintain a quality reading of 99.99 

percent and higher. 

In that same time period, we were able to increase our on-time 

delivery percent from 87 percent to 99.94 percent. We’ve been able 

to reduce our average cycle time from 70 days to 45 days. Today 

we have teams in place looking at ways to reduce that even further. 

In 1990, 8.7 percent of our time was spent on reworking nonconfirming material found within our facility. In 1996, we spent just 

over 1 percent of our time in this type of activity. As I said earlier, 

our employees are our most valuable asset. Twice each year, we 

conduct an employee survey. Our employee satisfaction score for 

1996 was 92.5 percent. Our management team has been working 

to improve this score for 1997. Since the bar has been raised, our 

goal for this year is 95 percent employee satisfaction. 

We spend an average of 4.6 percent of our payroll dollars on 

training. This compares with an industry average of 1.5 percent. 

Our employees receive an average of 40 hours of training each 

year. This includes total quality management training, blueprint 

reading, statistical process control, and even English as a second 

language for some of our foreign-born employees. 

Process improvements suggested by our employees have increased over the years. In 1991, 550 process improvements were 

suggested by our employees. In 1996, over 2,200 improvements 

were suggested. Over 98 percent of all of those suggested improvements have been implemented. 

I began by stating that Trident was a customer-focused environment. We want to know how our customers feel about us. Twice 

each year, we survey our customers and ask them to grade us in 

nine different areas. We’ve received an average grade in 1996 of 93 

percent customer satisfaction. We understand that 100 percent customer satisfaction is not a realistic goal, since it is such a changing 

target. What was satisfaction yesterday is expectation today. 

There were downfalls along the way. We decided to introduce a 

suggestion program. We had a box built and put it in our break 

room. We received over 250 suggestions. We did not have a process 

in place to deal with one suggestion, never mind 250. Our CEO 

called a company-wide meeting and explained that he had failed, 

not the staff and not the employees; he thought this would be 

something we could do very easily without a process, but we 

couldn’t. 

We used this failure as a learning experience. It taught us not 

to introduce something without a full process developed. It was also 

the turning point in our journey. It was at this point when everyone understood that this total quality was not a flavor of the month 

and this gentleman was very serious about making this work. 

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Does total quality work? I can only speak for my department, 

and the answer is an emphatic yes. 

In closing, I would like to offer you an invitation to Trident to 

get a firsthand view of Experience in Motion. And thank you very 

much. 

[The prepared statement of Mr. Juskiw follows:]

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Mr. HORN. Where is Trident located? 

Mr. CONCHELOS. We are in Webster, NY, which is a suburb of 

Rochester, NY. 

Mr. HORN. Well, we’ll try to work it out one of these next few 

months and enjoy seeing what you’re doing there. 

Now our next witness is Rosetta Riley, the president and chief 

executive officer of Sirius 21, Inc. 

Welcome. 

Ms. RILEY. Good morning, Mr. Chairman. Thank you for having 

me here today. I’m honored. 

I’ll address the question of whether or not TQM is a fad, or is 

it a fact, and what are some of the issues that cause TQM to succeed at some companies and fail at others. 

Before I begin, let me tell you about my company. Sirius 21, Inc., 

is a business consulting company that provides expertise to U.S. 

companies in total quality management, value driven leadership, 

and the Baldrige Award criteria. I was a Baldrige judge for 4 years, 

from 1992 through 1995. I’m also a professor at Falmouth Institute 

of Quality Systems Management, teaching total quality principles. 

I was previously employed by the General Motors Corp. I led Cadillac Motor Car Co.’s efforts to implement total quality management principles, and I also led Cadillac’s efforts to win the Baldrige 

Award in 1990. 

My company, Sirius 21, Inc., works with many types of companies and organizations, helping them to develop and implement 

processes and systems that will lead to high-performance excellence. My company and my associates have considerable experience 

in teaching TQM principles to employees and leaders of corporations. 

As I work with various companies, one of the concerns that I encounter most often from corporate leaders is: ‘‘We’ve implemented 

teams, we’re listening to them but nothing is happening. What’s 

wrong?’’ That is what I’m going to address today. 

It has been my observation that when TQM is not producing results and has not been embraced by the organization, it’s usually 

one or more of these major issues that are acting as a roadblock 

to success. These aren’t all of the issues, but they are just some 

major ones that I highlight for today’s testimony. 

One issue is, leadership does not communicate a customer-focused direction nor establish total business management as a way 

of life. Many companies venture no further than establishing vision, mission, and value statements. They fail to put in place an 

organization structure and a leadership system that ensures deployment and implementation. 

Leadership is impatient and does not want to and cannot invest 

the necessary time. They fail to recognize that it took many years 

to evolve the culture that rendered the United States noncompetitive in the 1980’s and, thus, to reverse these negative trends by reinventing our culture takes time. 

Leadership has not recognized how to effectively use human resources and capitalize on the significant benefits of using teamwork 

for implementing strategic objectives, increasing flexibility, improving communication, responsiveness, productivity, and efficiency. 

58

Leadership’s commitment is communicated in words but not actions. Employees and stakeholders take their signals and direction 

directly from the actions of management. When a leader’s action is 

not in line with company directions, the new norms that are required by TQM systems are not implemented. 

Last, leadership fails to train itself and its organization. The implementation of total quality management systems represent a 

massive and complex undertaking. It involves improving and possibly making some change in every aspect of the business. Since 

business processes are interactive and interdependent, even small 

changes can have significant downstream ramifications. These impacts can be both negative as well as positive. Therefore, it’s imperative that when taking the total business approach to improvement 

such as TQM, the necessary training must be provided. 

If those are all the things that prevent TQM from happening, 

why is it working for so many companies? Well, for those companies where it works, those leaders lead in a focused, consistent, 

systematic manner. These leaders have accepted the notion that 

the customer defines quality and that customer requirements must 

be met or exceeded. They empower their employees and assure selfdirected effort and teamwork. They emphasize management processes to ensure process capability and control, they utilize strategic 

planning to drive change in improvement, and they place strong 

emphasis on continuous improvement. 

Basically, I’m saying that TQM is not a fad. Due to the changes 

and the behavioral norms of future employees and customers, TQM 

is an absolute necessity for success in the 21st century. Besides, we 

have found nothing else that has had such a profound effect on improvements in the U.S. performance in quality and customer satisfactions. 

Many companies have derived significant benefits from TQM. 

Many of these are Baldrige Award-winning companies, State and 

local award-winning companies, and many of them are companies 

that we never hear from. They’re just quietly out there implementing TQM principles very, very successfully without any fanfare. 

One of my observations is: the problems we had early on with 

the implementation of TQM and why companies fail, was improper 

training. There was just not the type of training that would help 

organizations understand what TQM entails. What is happening 

now is, schools and universities are starting to provide that training. One of the schools, in particular, that specialize in total quality 

management training is the Falmouth Institute of Quality Systems 

Management. 

I think that many of the mistakes that were made by companies 

in the 1980’s will not be repeated as we move into the next 

millenium because of a lot of the things we didn’t know in the 

1980’s. We are more aware now through the education and training 

provided by schools and universities, through the training provided 

by ASQC, through the training provided by the Baldrige Award 

process. 

That ends my statement, and I thank you for this opportunity to 

speak. 

[The prepared statement of Ms. Riley follows:]

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Mr. HORN. Well, we thank you. 

Our next witness is Rear Admiral, Retired, Luther Schriefer, senior vice president, executive director, of Business Executives for 

National Security. 

Admiral Schriefer. 

Admiral SCHRIEFER. Thank you, Mr. Chairman. And I want to 

thank for you inviting me to come and testify today. 

First of all, I would like to tell you a little bit about our organization, BENS, Business Executives for National Security. It’s a nonpartisan organization of business and professional leaders that are 

dedicated to the idea that national security is everyone’s business. 

BENS members apply experience and commitment to help our Nation’s policymakers build a strong, effective, affordable defense and 

find practical ways to prevent the use of even one nuclear, chemical, or biological weapon. We work with Congress, the Pentagon, 

and the White House to ensure that the changes we recommend 

are put in practice. 

I am currently directing the BENS Tail to Tooth Commission. It’s 

purpose is to address the imbalance that exists in the ratio of the 

support side of defense to that of the combat side, a 70 to 30 ratio. 

Through the application of best business practices, we believe this 

ratio can be reversed with dollars saved put into forced modernization. The commission is comprised of successful political leaders 

such as Bo Calloway, Vin Weber, Warren Rudman, and Sam Nunn, 

and also very successful CEO’s and chairmen from business communities throughout America that brought the business community 

of America out of the struggling period of the eighties into today’s 

preeminent position. We believe that many private sector business 

practices are equally applicable to the business of defense. 

Now, before joining BENS, I had just completed, in February of 

this year, 37 years of active duty in the Navy, both as a carrier 

pilot, ship commanding officer, and commander of several major 

shore establishments. I was commander of the naval base complex 

in San Diego. And I finished up my career in the Navy as director 

of the Navy’s Environmental, Occupational Safety and Health. I 

also chaired the CNO’s Total Quality Leadership Board. And I believe that is the relevant reason why I am here today. 

My following comments are that of my personal experience. I’ve 

applied the concepts of total quality in four separate commands, a 

ship and three shore-based commands. I experienced varying degrees of success, with the most successful in my last command. At 

least I got to practice the mistakes in the first three. 

In the Navy we called the program TQL, Total Quality Leadership. A TQL program embodies all the elements of Dr. Deming. It 

had support from the top. And the CNO, in fact, Admiral Kelso, 

was a very strong component, not just a supporter. He practiced it 

at the Navy’s highest levels. 

Originally, in the Navy, it was the responsibility of each commanding officer to implement TQL in his or her command. The 

Navy established schools, trained facilitators to develop mobile 

teams, and provided the essential materials necessary to really 

change the attitude and, I could say, the culture of the Navy which 

is required to effect the principles of TQL. 

65

However, as it evolved, the training became more and more centralized, and the emphasis and cost shifted to schoolhouse training 

of randomly selected individuals. Less effort was spent training 

and coaching senior leaders at command level, where such coaching 

and training was really needed. 

It might be useful to review what I believe to be the principal 

elements of TQ so we can better analyze why the gaps and flaws 

occurred in its implementation. There is some variation in agreement of these concepts. However, the following notions are readily 

accepted. 

One, establish continual process improvement; two, focus on primary customer satisfaction; three, use data and statistical methods 

to identify, study, and solve problems; four, empowerment of individuals and teams through the entire change of command; five, 

strengthen and renew the Navy, command by command, through 

an ongoing assessment, evaluation of data, clarification of core values, and planning; six, emphasize leadership and personal development from the top down; seven, provide the best known vehicle to 

introduce and manage positive change thoughtfully and systemically; eight, redefine the leadership role to include managing processes and management change; and the last one, create a learning 

culture. 

I don’t need to amplify any of these elements because they’re fundamental to the Deming concept. However, I will say that as basic 

as these seem, the implementation of all nine in sequence as building blocks was seldom achieved. In fact, seldom did we get beyond 

element three into almost four, empowerment. And that is where 

the real payoff begins. 

From this perspective, I can comfortably state that the TQL program has not taken root except in isolated cases. In many of those 

isolated cases, they’ve been very successful. I believe the reasons 

for this are as follows: There is a focus on random schoolhouse 

training instead of focusing on an entire command: One, at a time 

learning and adapting and benefiting from application of TQ philosophy and its principles; two, although there were some outstanding TQ instructors developed, there was an overall lack of 

qualified TQ instructor facilitators and coaches with whom the 

Navy personnel, particularly our seniors, could relate and could 

translate TQ principles in operational Navy terms. 

You have to remember that tradition is endemic throughout the 

military and it is hard to change. There’s also a lack of ongoing assessment of program results, no predetermined measures of effectiveness, and no individual accountability for success or failure. 

There was little or no reward for command implementation, no 

penalty for ignoring prescribed TQ goals or standards. 

Finally, the senior leadership failed to acknowledge that the responsibility for TQ’s failure lay solely on implementation management and not on the TQ philosophy and the principles. 

Now I would like to sum up these five items in the following 

manner: The policy and direction that the Navy followed in implementing TQL was focused on training individuals one at a time. 

The concept of applying this training and implementing it across 

the entire command as an entity was not followed. TQ as a concept 

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ational command accomplishing its mission. Genuine proof of its 

value in a command context is probably the only way that total 

quality will ever be accepted system-wide. 

Now having said all of that, statistics could be provided citing all 

of the training that was accomplished, the numbers of people or the 

percentages of training that had been completed, the number of 

programs that were created for command implementation, and the 

list could go on, giving you a tremendous picture of a concerted and 

successful effort introducing and implementing TQL. 

But I contend that no benchmarks have been established; there 

are no assessments that show the results of TQL or any identification of meeting the goals of predetermined measures of effectiveness, and, finally, no incentive to justify taking the extra effort required. Tremendous resources in dollars and people have been 

given to this program without establishing valid measures of effectiveness. To meet the Government Performance and Results Act requirements, it would fall far short. 

What can be done to salvage this program to take advantage of 

the hundreds and millions of dollars already spent and to establish 

a program that truly makes a difference? The following is one approach: Conduct an assessment where the Navy’s TQL program is 

today, where in relation to where it wants to be and should be. 

In order to be an unbiased and effective assessment, the following criteria is recommended: Establish an assessment team. 

The charter of that team is to evaluate present plans for command 

and leadership management development, and evaluation of the resources existing and expended. 

The product of this team should be specific recommendations for 

required adjustments that will make current plans effective, timely, and economically feasible. Team composition should be composed of those members who are knowledgeable, experienced advocates of continuing process improvement and leadership development. 

Now it’s important that the team members be independent of today’s organizations which design and implement the Navy’s leadership/management and command development programs. Existing 

biases and attitudes that impede the organizational commander 

must be bypassed. All members of the team, including the civilians, 

should have experience in the field. 

Mr. HORN. I wonder if I might just interrupt you at that point 

since we’ve got all the time in the world. I didn’t quite understand 

that sentence: The existing biases and attitudes that impede the 

organizational commander must be bypassed. All members of the 

team, including civilians, should have experience in the field. I’m 

not quite clear on what is the bypassing. If you could just elaborate 

here, I think it would help us. 

Admiral SCHRIEFER. I think if you deal within the existing structure that we have right now to correct these problems, in other 

words, using the ongoing personnel, the bureaucracy that exists to 

implement TQL throughout the Department of Defense, you have 

a certain number of biases based on the way we’ve done business 

in the past: The reluctance to change, the reluctance to take that 

significant step, and also the mentality that exists throughout the 

entire structure, the tradition that I was referring to earlier. 

67

In order to avoid that, I think you need to have an outside group 

independently look at it, evaluate it—and that outside group includes not only military personnel, but also those civilians who are 

experienced in this field—and then deliver that directly to the commanders, and avoid the bureaucracy that tends to bog it down. 

Mr. HORN. Good. Please proceed. Sorry to interrupt on that one, 

but I thought it was a very important point and wanted to get it 

clarified. 

Admiral SCHRIEFER. The next point is to ensure that the senior 

leadership—and this is for long-term involvement—supports the 

implementing and the recommendations that come out of that advisory group. The program will only be successful if the senior leadership forcefully supports and implements the recommendations. 

As initially conceived, the elements of TQ are tools which can have 

a major impact on readiness, efficiency, and effectiveness of the organization. 

No. 3, establish an ongoing assessment which reflects and determines how predetermined measures of effectiveness are met and 

how they are implemented. 

No. 4, establish incentives to promote the program. These inducements can run the full gamut from just a simple directive to budgetary controls as envisioned by the GPRA. Regardless, incentives 

will be an essential part in the implementation at the organizational level. 

If the Chief of Naval Operations forcefully supports these recommendations and systems changes that will provide incentives, 

you will see this TQ program take off. 

In summary, total quality as initially conceived provides tools 

that can have a major impact on readiness, efficiency, and effectiveness of any organization. I believe that TQ provides an important philosophy and technology that will enhance both our Federal 

Government and national security. Implementation is already a 

matter of both national and DOD policy. 

It would be a shame to let it die as a result of poor politics, bureaucracy, or benign neglect. With modest experimentation, data 

collection analysis, and really courageous leadership at the top of 

Government agencies, we can develop a much lower cost TQ implementation effort. This will enhance the integrity and cost effectiveness of the entire Federal Government. 

I want to thank you for giving me the opportunity to express 

these views. 

[The prepared statement of Admiral Schriefer follows:]

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Mr. HORN. Well, we thank you, Admiral. That’s a blunt and 

truthful statement on the situation, and I thank you for saying it. 

We’ll have a lot of questions about it later. 

Our last witness on this panel is Lawrence Wheeler, vice president, Program System Management Co., Arthur D. Little, Inc. 

Mr. Wheeler. 

Mr. WHEELER. Mr. Chairman, thank you very much, and good 

morning. Thank you for the opportunity to provide information 

about Arthur D. Little’s experience in consulting on quality management principles within the Federal Government. 

I’m a director of ADL’s Washington Government consulting operations. As a director, I oversee Arthur D. Little’s total quality management services to Government clients. I also have personal experience in several assignments to help improve Government operations. I have been with Arthur D. Little for almost 13 years. Prior 

to joining ADL, I completed 24 years of active-duty military service 

as a Navy supply corps officer. I will now give you Arthur D. 

Little’s observations on the subject of this hearing. 

Corporate America adapted the principles of total quality management in the 1980’s as the means to revolutionize business practices, empower employees, improve productivity, and raise profits. 

While some corporations were successful in the short run, few improvements have led to sustained high performance. Within the 

Federal Government, I believe you would find the same results. 

We currently provide total quality management implementation 

services to the Federal Government under a General Services Administration contract. We have worked with the Navy, the Office 

of the Secretary of Defense, the Federal Aviation Administration, 

and the Internal Revenue Service. 

In general, our experience has left us with an overwhelming impression that the vast majority of civilian and military employees 

of the Federal Government sincerely want to improve Government 

operations; they want to provide best value to the taxpayers. The 

application of the TQM principles often results in more efficient 

and effective ways of doing business. However, as in private industry, the success of Government employee individual efforts requires 

persistent leadership, long-term funding to implement, not just design changes, and rapid passage of ideas through organizational 

change of command boundaries. 

My message is that the application of these principles to make 

Government work better and cost less is a positive approach. But 

the application to these principles must be championed consistently 

from the highest levels of an organization, and the trained resources must be aligned to make and, more importantly, sustain 

improvements. 

I will now cite a few examples from our work with Government 

agencies. Near the conclusion of my remarks, I’ll provide our observation of the pitfalls to successful performance improvement that 

we have also seen in private industry. 

In the first example of our Government experience, we reviewed 

the financial procedures of an organization. Our mutual objective 

was to establish an improved process for determining whether the 

organization was making or losing money on a monthly basis. 

73

You probably know this is not standard procedure in the Federal 

Government, but we were trying to develop an easy way to forecast 

a proper loss for the year sufficiently in advance to be able to take 

proactive corrective measures. The desired result was to break even 

by the end of the year. 

As it turned out, our recommended approach was viable. The information was readily available and useful within the organization, 

and the process improvement worked without adding people. However, since the organization was not high enough in the chain of 

command, it did not have the authority to adjust resources to 

match work load, the key element that affected the year-end results. Thus, the organization had in fact improved the local process 

but the total process was controlled at higher levels in the organization. 

The lesson learned was that the processes to be improved by the 

organization must be critical processes that can be exchanged effectively at their level. 

In our second example, we made recommendations for significant 

improvements in a process that crossed organizational division 

boundaries, as most critical processes do, but the necessary resource and organizational realignment needed to implement the 

improvements could not be done quickly, and some of the benefits 

probably were lost because of the delay. The lesson here is that top 

managers must not only be consistent in their support of both the 

pursuit of the improvements, but also be persistent in making 

changes occur within a reasonable time. 

In the final example, or success story, we worked for the highest 

level in the chain of command with routine feedback and communication with the highest official. After an intense effort to find the 

best single standard system that would improve an acquisition 

process, it became apparent that there was no one system that 

would be the answer. But in this case, because of the routine personal involvement of the highest official, our unexpected recommendation to use more than one system, depending on the circumstances, was accepted quickly and is being implemented. 

The lesson here is that without the senior leadership commitment, our nonstandard answer would have had to be passed 

through several levels of review, probably delaying action on a very 

time sensitive issue. 

Changing directions now, we thought that a few observations 

from our experience in private industry might also be of interest 

to you. In private industry, we have seen three root causes for the 

failure of many quality initiatives. First, most TQM projects fail to 

focus on the most critical business processes. Rather, they focus on 

obvious, classically defined processes like manufacturing, in which 

the task are identified, the individuals responsible for the processes 

are clearly defined, the customers are known, and the success or 

failure of improvement efforts is easily measured. Unfortunately, 

most of today’s critically important business processes do not meet 

these criteria. 

Rather than grappling with the complete and, most often, highly 

complex process, management allows improvement efforts to focus 

on only a portion of the overall operation. The results are usually 

marginal. My first example of our experience in the Federal GovVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00077 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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ernment is representative of this root cause in that the Government organization was improving only the local operation and not 

the entire process. 

Second, most organizations fail to align their organization and 

their resources to support long-term improvement efforts. For most 

companies, quality recommendations require fundamental changes 

in the characteristics of an organization. In its policies, culture, 

and structure, quality initiatives also will require wise investments 

in the resource base, the people, technologies, information, and facilities. Companies often understand the need for such investment 

also, but typically fail to recognize their interconnectedness. 

My second example of our Government experience fits this scenario and that the delay and implementation of improvement recommendations was related to culture and structure changes that 

could not quickly be overcome. 

Last, TQM-based improvements often are viewed and communicated as being separate from the strategic goals of the organization. Consequently, the quality initiative is not communicated 

through planning processes or translated into specific objectives for 

departments or employees. Quality programs that don’t support 

strategic goals will confuse workers and create conflicting priorities. I believe these observations from the private sector should 

guide the implementation of TQM in the Federal Government as 

well. 

In summary, our experience in both the Government and the private sector indicates that positive and lasting results from quality 

improvement initiatives depend primarily on a consistent support 

of top managers at the level where critical processes are controlled. 

That concludes my remarks, Mr. Chairman. Thank you very 

much. 

[The prepared statement of Mr. Wheeler follows:]

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Mr. HORN. Well, we thank you. 

Let me just ask some specifics now before I get to the general 

questions. And I might as well start, Mr. Wheeler, with you, just 

so I can clarify some of the testimony. You noted on page 2, you 

worked with the Navy, the Office of the Secretary of Defense, the 

Federal Aviation Administration, and the Internal Revenue Service. At what level were you dealing in working with those agencies? 

Mr. WHEELER. It varied, sir. 

Mr. HORN. Let’s go down. Whom did you work with in the Navy 

now? What level was that? 

Mr. WHEELER. The Navy was at the commanding officer of a 

naval activity out in the field. 

Mr. HORN. This is a naval command? 

Mr. WHEELER. Yes, sir. 

Mr. HORN. Here in Washington? 

Mr. WHEELER. No, sir; it’s in California. 

Mr. HORN. What’s the aviation command? 

Mr. WHEELER. The aviation depot. 

Mr. HORN. This is in where? San Diego? 

Mr. WHEELER. San Diego, yes, sir. 

Mr. HORN. Everything seems to be in San Diego, so I thought I 

would have a good guess. The Office of the Secretary of Defense, 

who was——

Mr. WHEELER. That was locally here, sir, right in the acquisition 

arena. 

Mr. HORN. This is Mr. Kaminski’s area. 

Mr. WHEELER. In his area, yes, sir. 

Mr. HORN. In his area. I’m trying to figure out how high one has 

to go to get a success story here. 

Mr. WHEELER. Yes, sir. The point I was trying to make was, if 

you’re dealing with a field level activity, as we were in the Navy, 

generally they try to do things that improve locally for that command. But the process itself is generally higher and goes through 

many levels up to the top. 

So your question is a good one, of course, but it depends on what 

process you’re looking at. 

Mr. HORN. Well, in the case of the command in San Diego, was 

that the initiative of the commander of the Pacific fleet, or was it 

within the support system? 

Mr. WHEELER. No, sir. 

Mr. HORN. Who told them to get moving in this area? 

Mr. WHEELER. It was the CO permanent initiative, sir, and trying to find a better way to do business. 

Mr. HORN. Well, that’s interesting. So in other words, they have 

the freedom within this——

Mr. WHEELER. Yes, sir. 

Mr. HORN [continuing]. To not have to get the anointment, I take 

it, of the Chief of Naval Operations or the rest of the hierarchy in 

Washington; they actually can go ahead and do something. 

Mr. WHEELER. Yes, sir, they can. 

Mr. HORN. That is good news. So I have learned something here. 

And in the Office of the Secretary of Defense, was this in one of 

the major assistant secretaries’ realm? And if so, which one are we 

talking about? 

81

Mr. WHEELER. Sir, it was for acquisition reform. 

Mr. HORN. Acquisition reform. OK. 

FAA, who are we talking about there? 

Mr. WHEELER. This was done for the administrator. 

Mr. HORN. OK. And the Internal Revenue Service? 

Mr. WHEELER. This was for the Corporate Education Division of 

the IRS. 

Mr. HORN. So they seem to have the freedom to contract, 

also——

Mr. WHEELER. Yes, sir. 

Mr. HORN [continuing]. Or go right up to the commissioner. 

Mr. WHEELER. Yes, sir. 

Mr. HORN. Well, did it? The commissioner signed off on——

Mr. WHEELER. No, sir. We got this from the Corporate Education 

Director. 

Mr. HORN. OK. Let me just see here if there was something else 

I wasn’t quite sure on. No. That is the main thing I wanted to get 

clear in my mind. OK. 

You said, Mr. Wheeler, that most quality management projects 

fail to focus on the most critical business process; rather, most 

projects focus on classically defined processes. How can organizations address those critical business processes? What is your advice 

on that? 

Mr. WHEELER. I believe that there has to be a more correlated 

approach to—as the admiral was saying, that there has to be a 

higher level approach to determine what a full critical process is, 

and then have the individuals that are part of that process cooperate together to make it better. To go in and just shotgun processes 

for the purpose of statistics serves no useful purpose. How would 

they determine the most critical processes I believe would be determined basically on what the activity’s results are expected to be 

and work backward from that. 

Mr. HORN. OK. Admiral Schriefer, let me ask you a couple of 

things. I was very interested in your almost first opening comment 

on the need to turn that ratio around of support to actual people 

on the line, the combat side, and you noted the 70/30 ratio. 

As I remember, as a little kid, and I was fairly small then, but 

I sort of followed the Second World War, and I would like maybe 

if you could correct me if these were the wrong figures: The United 

States had essentially 90 percent behind the line and 10 percent 

on the line. The USSR, with its military, had 10 percent behind the 

line and 90 percent on the line. Is that too much of a difference 

or what? It has been in my mind for 50 years now, so you have——

Admiral SCHRIEFER. I can’t verify those statistics. I haven’t 

heard it that bad. Historically, over the last 15 to 20 years, we’ve 

been running about 50/50. As a benchmark, the Israelis run 30 percent, almost the reverse of what we have today. 

Mr. HORN. This is 30 percent on the line? 

Admiral SCHRIEFER. 30 percent support. 

Mr. HORN. Support, OK. 

Admiral SCHRIEFER. And 70 on the line. 

What’s happened to us is that as we have downsized at the end 

of the cold war, we have cut the combat forces and all of the support going with them, pretty much a steady budget, and we barely 

82

touched the supporting infrastructure. And that’s how it’s gotten so 

large. And our thrust is to look at the way that the Department 

of Defense does business and see if we can’t apply the practices, the 

best practices that the business has to offer. And I could cite some 

various specific examples that show how that could be done. 

Mr. HORN. Well, I would like you to give us a taste of that here, 

as to how it could be done? 

Admiral SCHRIEFER. Well, as an example, in the housing business, it costs about two and a half times more per person for the 

Department of Defense to maintain housing than it does if we turn 

it over to the private sector. Our administrative oversight and the 

travel budget——

Mr. HORN. Well, let me ask you on point. I can see where you 

are coming from, but would that mean the sailors would have to 

go out and find their own housing, or does it mean the Navy would 

have to contract with private housing rather than build it? 

Admiral SCHRIEFER. There are all kinds of variations with that. 

That’s part of the ongoing discussion right now. In fact, the Department of Defense has taken a real hard look at it. They’ve got prototype projects most significant right now starting out in Corpus 

Christi. 

But the thrust is basically to get the Department of Defense out 

of the housing business, that is not their core business, fighting 

and destruction is their core business and to get into the business 

of things like housing, the business community can do a much better job. 

Mr. HORN. Would that be true around the country? In an urban 

area that might be true. How about in some of the rural areas 

where they simply don’t have that amount of housing available 

with large group——

Admiral SCHRIEFER. That certainly would be one of the variations. And Department of Defense is looking at that. 

Mr. HORN. It’s interesting. Did that start with Secretary Cohen, 

or has that predated him? 

Admiral SCHRIEFER. It’s predated him, although he has certainly 

taken the initiative in it. 

Mr. HORN. OK. How long has that study been going on? 

Admiral SCHRIEFER. I can’t answer that question. I don’t know. 

Mr. HORN. It isn’t over a year or 2 years? 

Admiral SCHRIEFER. There have been various pockets of it. I 

think the most recent one Secretary Goodman has, who is responsible for this, is probably about a year. I know the Navy particularly has been addressing that and they’ve had some very strong 

prototype programs that are showing success. 

Mr. HORN. You mentioned the Chief of Naval Operations. Admiral Frank Kelso is a strong supporter of quality leadership. You 

served in the Pentagon under two CNO’s. Was the other one the 

stronger supporter, and who was that? 

Admiral SCHRIEFER. Well, Kelso was relieved by Boorda, and 

Johnson relieved Boorda. There has been just a change in the attention and the emphasis that’s been placed on it, and primarily, 

I think, because there’s more emphasis throughout the spectrum 

than was required or they felt was required on TQL. The effort 

that we had put in infrastructure, the training, and all of that did 

83

not change; that pretty much stayed as it is. It is just the emphasis 

that came from the top. 

Mr. HORN. Has the Secretary of the Navy made any effort to 

back this program up? 

Admiral SCHRIEFER. He certainly has. He has an office that he’s 

established that specifically is focused on quality management, 

TQL. 

Mr. HORN. As I remember, that is under the under secretary of 

the Navy and reports——

Admiral SCHRIEFER. That’s correct. 

Mr. HORN [continuing]. Directly to him. We will get into that a 

little later. 

Do you think as you look at it—and the Pentagon is sort of 

unique compared to other agencies here, with rare exception—if we 

are going to get something done, is it basically the chief military 

officer in this case, the Chief of Naval Operations or the chief of 

staff or the Commandant of Marine? Is that where the initiative 

has to come from? Or do we need the civilian sector to keep prodding them even though they come and go every 4 years or 8 years 

or we need both? What is your feeling? 

Admiral SCHRIEFER. I think we clearly need both. All we’re really 

talking about is change, change the traditional way of doing business, and when you want to start talking about the combination of 

management and leadership or just leadership, that clearly falls 

under the uniform service. 

Mr. HORN. Yes. 

Admiral SCHRIEFER. And that’s his charter, is to take care of his 

troops. And as a result, it has to be fully embraced at that level. 

Mr. HORN. In the testimony of the Department of Defense, it will 

be the last panel of the day, there really isn’t much there, unless 

there is something they just aren’t putting there in terms of the 

services, and is it just so much more difficult to get total quality 

management through the service hierarchy or is it simply the support services, little dibbles and dabbles here in the Department of 

Defense? I didn’t get the feeling that anybody cares about it, after 

reading the testimony. 

Admiral SCHRIEFER. I haven’t seen the testimony, so I probably 

can’t respond to it. 

Mr. HORN. There is probably a copy over there on the table. If 

not, we can furnish it. We will get into that at length when their 

witnesses come. 

So I was just curious in your sense of having been in the Navy 

hierarchy, having observed it, the civilian sectors of the Pentagon, 

is it much more difficult for us to have and expect a total quality 

management effort in the military services than in the civilian run 

services, where some come from business, they are familiar with 

the concept, and so forth? 

Admiral SCHRIEFER. I don’t think so. I think in my testimony I 

might have come across very negative, and that was not the intent. 

The thrust was to point out where I thought the weaknesses were. 

We have had some very good successes in the Navy. In fact, as 

was mentioned earlier by Mr. Wheeler, the work that was done by 

the commanding officer in aviation depot in San Diego was very 

84

well done, and we have several other examples where it has been 

within the local command and the structure has supported in it. 

From an overall perspective, I think it has been subsumed, the 

effort has been subsumed, in just the overall leadership approach 

the Navy has got. 

Mr. HORN. Is the commanding officer that did that in the San 

Diego depot, is he still in the Navy? 

Admiral SCHRIEFER. I think the one that started it is no longer 

in the Navy. I know one is and I think the immediate successor is 

out at this time. 

Mr. HORN. So they retired from the Navy? 

Admiral SCHRIEFER. I believe they did, yes. 

Mr. HORN. So there is no reward for a commanding officer to believe in total quality management is what that tells me, if the 

Navy let’s an officer that is on the pioneering side——

Admiral SCHRIEFER. I think that is a wrong reaction or understanding of it. Any commanding officer’s reward in applying this 

will be, if he in fact has a stronger, better, more effective, efficient 

organization. TQ really addresses not only the end product and all 

the things that are associated in Deming’s concept, but also the 

fact you take care of your people better. They become real players, 

and as a result, that really supports the organization better, and 

any commanding officer that achieves that is going to get tremendous satisfaction on that. So I would not say that his incentives are 

lacking. If he understands what he is doing, he should have no 

trouble at all in really being motivated to go after it. 

Mr. HORN. Well, is it agreed that the TQ operation there was a 

success? 

Admiral SCHRIEFER. I would say that it was a success. 

Mr. HORN. Well, I guess I would say if I were a junior officer in 

the Navy wanting to get to the top, gee, you know, it was a success, 

and he isn’t rear admiral or he isn’t vice admiral or he isn’t admiral. It seems to me, the smoke signals, the shock waives, whatever 

you want to call it, people are stupid, they look ahead and they say, 

gee, what do you get rewarded for around here, and as you say, it 

is the total effort of that particular command, but if it was a success, that particular command ought to be doing better than a comparable command. 

Admiral SCHRIEFER. Let me turn that question around a little 

bit. There are significant numbers of flying officers that applied TQ 

concepts in success of their command. 

We took a ship to a shipyard up in San Francisco. Any time you 

take a ship into a shipyard, it is not a pleasant experience, particularly for the crew. He was up there and started this—it was a 

major year or year and a half overhaul. At that time, the retention 

of the troops, the yearly, dropped significantly. Well, about 3 or 4 

months into the overhaul, the company that was doing it went on 

strike, and they stayed on strike for a year. Now here you have a 

crew aboard a ship, who has really no focus on life anymore, and 

it is a very bad leadership problem. 

Well, he took that crew, he applied the total quality principles 

to that. His retention went up higher than just about anything, 

and he was very successful. So that is an example, and he clearly 

got rewarded for that. He went on and had plan of a carrier and 

85

selected for a flag by the way he applied those same principles both 

on his membership, as well as on his shore commands after that. 

So there are rewards and there have been rewards for those who 

applied it. When I talk about incentives, it has to be an incentive 

across the entire spectrum. In other words, the lowest level, as well 

as the senior readerships, have to realize and understand that. 

Mr. HORN. Well, from your position to observe the Navy now as 

a retiree, what percent of the Navy would you say is involved with 

total quality management efforts? Ten percent? Twenty? 

Admiral SCHRIEFER. I tell you, I really couldn’t answer that with 

any degree of confidence. 

Mr. HORN. Has this gotten into the bloodstream of the American 

Navy? 

Admiral SCHRIEFER. Let me answer that two ways. I think the 

concepts of TQ are starting to be felt throughout the Navy, the concepts, not the application, because we are teaching it at all levels 

right now from the academic position. The actual application of it, 

which, again, we heard it several times today, requires the commitment of senior leadership, right straight on down. That has not 

been nearly the level you would expect, and a gut feel might be 20 

percent, but I have no idea. 

Mr. HORN. Well, as I hear the grapevine in various fleets, Atlantic and Pacific, from just the average person, it sounds like a lot 

of people are being trained and they aren’t given a project to deal 

with after the training. That just seems to me to lead to a lot of 

frustration and hopes and expectations, that we found the new religion of management, Drucker 10 or whatever we want to call it, 

or Deming 2, you know, it is just not the way to run an organization, to get all that high level of training and then not have 

projects where there is something to be done in a manageable period of time that puts that training to work. So you learn something from—as John Dewey said, learning by doing is what counts, 

not just reading about it. 

And that is what concerns me in the Department of Defense submission. It is a zilch, frankly, and we will be getting into that, unless they just forgot to say anything about the armed services, with 

rare exception, and some of the projects are fine, but they are piddling in terms of the challenge, and that is why I am curious 

whether we are just training people or whether we have missions 

for them to accomplish when they are training. 

My first mentor was the Secretary of Labor, under President Eisenhower. I was his assistant. He taught me early that endless job 

training does no good unless there is a job at the end of the line 

that someone can see and someone can place. He was right, and 

it just leads to frustration and organization when it is the other 

way around. 

So let me ask some questions of Mr. Conchelos and Ms. Riley. 

How did it feel for you to win the Baldrige Award? That is why you 

are here as witnesses. 

Mr. CONCHELOS. Absolutely phenomenal. It was not the end of 

a long road, actually; it is the beginning of a new road for us. I 

have never done so much public speaking in my absolute life. 

Let me explain, we didn’t get into the Baldrige process, as Harry 

Hertz said earlier, to win this award. What we wanted to know 

86

was, in 1990, we submitted our very first application, and as I said, 

we started this in 1988 and it took us 14 months to develop our 

process, so we were virtually just implementing this throughout the 

organization when we applied for our first Baldrige. But what we 

wanted to know was, were we on the right track? We had 

benchmarked several organizations, as I stated earlier, but we still 

weren’t sure and this was the criteria that could be used to find 

out exactly if we were on the right track. 

Mr. HORN. Well, what was the reaction and feedback from the 

employees? 

Mr. CONCHELOS. At implementing total quality or winning the 

award? 

Mr. HORN. Winning the award. 

Mr. CONCHELOS. They were ecstatic. 

Mr. HORN. How many years ago did you win the award? 

Mr. CONCHELOS. 1996. 

Mr. HORN. So we haven’t had a full year yet. 

Mr. CONCHELOS. No, not yet. One of the things that people are 

very amazed about is we have a very small facility, we are 180 people, we have 87,000 square feet right now. That Baldrige Award, 

along with our New York State Excelsior Award, which we won in 

1994, are right in the break room. 

Mr. HORN. Who is the sponsor of that award? 

Mr. CONCHELOS. That is our local State award. 

Mr. HORN. Very good. 

Mr. CONCHELOS. Both of those glass crystals are right in our 

break room for our employees because they are the ones that won 

the award. 

Mr. HORN. How about it, Ms. Riley? 

Ms. RILEY. Well, at General Motors it was complete pandemonium when we got the call that Cadillac had won the Baldrige 

Award. We were in a business meeting and our chairman, who at 

that time was Bob Stempel, called to tell us that he had received 

a call, and you could hear the senior executives of General Motors: 

we could hear all the noise and excitement. Now what impact did 

it have beyond the excitement? It had a very significant impact. 

Going back to your question that you have asked several times 

this morning, that is, can you implement TQM without the total 

commitment of the top leadership? Ideally, and I know Harry will 

support me on this, we want the top leadership to be in front of 

the parade, we want them to put TQM on their t-shirts, we want 

them to name their first born quality, but the reality in the United 

States is that just doesn’t happen. 

So the start sometimes is not at the top; the start may be some 

individual, because concepts come from individuals, not teams. 

Conceptually, it is possible in some types of organization where 

there are strong autonomous units, the change may start somewhere other than the top. In order for the development and implementation to occur, and become a true, total quality management 

system across the total company, you do need top leadership to get 

involved and lead the parade. 

Now how do leaders do that? Sometimes they do it by waving 

flags and putting slogans on the walls and what have you. Certainly the important thing is they have to establish direction and 

87

have to be consistent with respect to their direction, no matter how 

many changes are going on. 

Another way that leaders lead that we don’t talk about a lot and 

I call it rotational leadership. That is when leaders have the ability 

to allow those in the organization to lead the change, who know 

best what the change is, and I heard the Admiral Schriefer talked 

about examples of change agents, down in the organization, who 

have started the momentum. Once Cadillac won the award, General Motors didn’t say, hey, we don’t want this here; the chairman 

called me up and said, Rosetta, if we can make this happen at Cadillac, at a 60-year-old company that was in severe trouble, we ought 

to be able to make this happen at General Motors. 

To make a long story short, I was assigned to work directly for 

the chairman and his direct reports so that we could create a total 

quality management process for General Motors for the 21st century. That is what GM is trying to implement now. So becoming 

involved with the Baldrige Award had a significant impact on General Motors Corp. 

Mr. HORN. Well, let’s limit it a minute to the characteristics of 

the supporting leader. You have done some of that. I would like to 

know the characteristics of a leader that is unsuccessful and what 

are the primary things that the leader does wrong, even though 

they might mean well when they start on it. 

Ms. RILEY. Right. Leaders, in many organizations that I have 

come in contact with, and even in my company, General Motors, 

and some of these autonomous units would establish values, vision, 

and mission statements. We would put them all over the wall. But 

we didn’t have a process in place to make anything happen. 

It is the same thing as your comment on training. You can train 

all you want, but if the training doesn’t have a mission and a purpose, and you don’t have an organization structure in place so that 

employees can make something happen with that training, it just 

simply won’t happen. 

In many organizations, we want TQM and its benefits, but we 

don’t want the pain. So we take TQM principles and like fruit on 

the low hanging tree, or it is very similar to what we did in the 

early 1980’s when we went to Japan and decided they had the best 

quality possible and looked at everything and we came back and 

said the reason for their quality was quality circles. We didn’t understand it was systems. 

Well, the same thing is still going on in many companies where 

leadership does not understand that you don’t look at one process 

and improve just that process. You have to look at every single 

process because they are all linked and interdependent, and just 

improving one and not doing anything with the others, you are not 

going to get the results you need, so you must take a systems approach. So that is certainly one of them. 

The other issue we talked about was training. In many of our 

companies we train our employees, and especially union companies, 

we trained union workers because, after all, they are the problem. 

However, we didn’t train management or anybody else, so we created a euphoria for these employees. They came back with religion, 

they were ready to turn the company around, but their leaders or 

supervisors or foreman have never been trained so they would say, 

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‘‘Hey, great news but that dog is not going to bark here.’’ These 

kinds of issues are the kinds of issues that get in the way of success. 

Mr. HORN. When you did train union shop stewards and people 

in the collective bargaining hierarchy, did anybody find that made 

a difference in future collective bargaining negotiations? 

Ms. RILEY. Training makes a difference. What made a difference 

in future bargaining negotiations at Cadillac, and you asked this 

question earlier, how they involve unions in the development of 

total quality management, the worst thing you can do is develop 

the process and then go to them and them to sign up for it. 

The second worse thing you can do is give it a name, because 

once you give it a name, it becomes a target. What you need to do 

is assume that they are our people, our greatest resource, and so 

we need to clear the table, start off with a blank sheet of paper 

with them around the table and say, here is what is wrong with 

our company, here is our values, here is our direction, here is 

where we need to be, show us how to get there. And they will come 

up with the same concepts. 

No matter how many times you go through this exercise—and I 

know Harry will support this—no matter how many times you 

come up with the exercise, the employees are going to come up 

with the same, basic answer, maybe giving different terminology. 

What I am saying about unions is when you go to them with the 

answer and ask them to buy in, it is very difficult for them to do 

that. 

Mr. HORN. Anything else, Admiral Schriefer, Mr. Wheeler, that 

you want to say on the successful characteristics and the unsuccessful characteristics of a leader, anything you want to add to the 

menu here? 

OK. I think we probably discussed this one enough, but what are 

the components of a good training program? How long should it 

last? Is it a daytime thing? Is it a day every few months? An incremental building of knowledge? What? How do we deal with that? 

You are an expert, Ms. Riley. Tell us about it. 

Ms. RILEY. Well, I don’t know about being an expert. But training certainly has to have a mission and a purpose; it has to be tied 

to something. It is best if it is just-in-time delivered so that once 

employees received the training they can go right in and use the 

training. 

In order to make training effective, leaders of a company, we 

must be certain that we have removed all roadblocks. We can train 

them, we can have mission, but if a company has roadblocks that 

prevent employees from doing the implementation, they still can’t 

do it with the best training in the world. 

Training in terms of whether it should be 1 day or 2 days or 

what have you, that all depends on what kind of training you are 

doing. But certainly any kind of training that is done for process 

improvements or to help employees do their jobs should be done on 

a regular basis. In other words, what I am saying is you don’t do 

it once at the beginning and never do it again; you have to reinforce knowledge over time. 

Mr. HORN. Anything anybody would like to add to that? 

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Mr. CONCHELOS. Our training right now for total quality management is 21 hours. That is within the work cycle, within the regular work day. 

Mr. HORN. Twenty-one hours over what period? 

Mr. CONCHELOS. That is over 7 days. 

Mr. HORN. Over 7 days. So it is essentially 3 hours a day? 

Mr. CONCHELOS. Three hours a day. 

Mr. HORN. And when do the 7 days occur? 

Mr. CONCHELOS. We were, in the beginning, waiting until after 

the 60-day waiting period after they were hired, to make sure they 

were Trident material and we were right for them. Because we 

have had people there leave because they couldn’t understand total 

quality. The original plan was after 60 days. 

We have since modified that as part of our new hiring practices. 

And to help these people understand about Trident and the team 

atmosphere they are going to be in and help them understand our 

language a little bit, they get 6 hours of training within the first 

2 weeks of their working at Trident. So we are trying to bring them 

into our family a little faster, and we found that has helped with 

our turnover rate in our less than 60-day period. 

Mr. HORN. Is that 1 hour every other day or 1 day you take 6 

hours? 

Mr. CONCHELOS. We have kept it in 3-hour blocks, 2 days, 3 

hours, so they can really get a feeling for what they are going to 

be hearing, their interactive skills. It is basically their interactive 

skills training and introduction of the problem solving process because we do like to have new eyes on our teams, so they are constantly asking, why do you do that, why do you do that. 

And for our older—not older workers, but people who have been 

in the organization for a while, the easy answer is because that is 

the way we have always done it. When you have new people looking at it, they really make us stop and look and say, why do we 

really do that, help streamline our processes. 

Mr. HORN. What did you find your biggest mistake was when you 

started your first training program? What had you forgotten or 

what didn’t you know or understand? I mean, you obviously 

learned a lot. 

Mr. CONCHELOS. The difficult part about training was how are 

we going to do it. That was the difficult part for us. We didn’t know 

whether we could do it during the work day, whether we had to 

do it after hours, so that we didn’t interfere with the manufacturing process, because as wonderful as it is, business must go on. 

You still have to get those parts out the door in order to get paid 

at the end of the week, so that was a very difficult aspect for us, 

trying to figure out exactly how to do that. 

We made a few mistakes along the way, for example, we shut 

down entire departments when it really wasn’t necessary. We went 

back and instead of just training people by departments, we took 

them cross functionally. And that even added to the conversations, 

because the people in one department could ask the people in the 

other department, ‘‘well, as my customer, why are you doing this?’’ 

And it helped to increase internal customer supply relationships. 

Mr. HORN. One of the things they said for years about law enforcement training is, when they have to go through the academy, 

90

is the graduate of the academy comes out with a lot of knowledge 

and a lot of ideals or they wouldn’t have gotten into the police 

force. And they get out on the beat and the sergeants says, ‘‘hey, 

kid, I know they taught you a lot at the academy. Forget it. Just 

watch what I do.’’

How do you deal with that in any human organization? 

Mr. CONCHELOS. As everybody has stated here, our training is 

just in time. What you learn in the classroom will be put to use 

very, very quickly. 

One of the most difficult aspects for us in this total quality journey has been the changing role of the manager, who for years has 

worked his way through the ladder to become the, quote/unquote, 

boss, who is no longer the boss, who no longer has all the answers. 

That was difficult for us, and we did lose a couple people on our 

staff because they could not handle that. But our people now understand they are no longer the boss, they are the coaches. The 

real experts are the people that are on the punch presses or on the 

press brakes. They are the experts in what they are doing, and we 

have, as we said in our statement, utilized their talents to become 

one of the—I hate to say best, but a national organization. 

Mr. HORN. It shows it can happen and can be done and can continue. 

Mr. CONCHELOS. It can continue, and it has to continue. It is the 

greatest thing when competitors come by. People don’t understand 

how we can open up the doors to competitors, but we do open them 

up. We offer seminars each month, and there is no way of stopping 

them. But the better that our competitors become will be that 

much better that we become. 

Mr. HORN. So competition works. 

Mr. CONCHELOS. Absolutely. Absolutely. 

Mr. HORN. Are your competitors all trying to emulate you on 

this? 

Mr. CONCHELOS. They are trying to figure out if it is just painting the machines or keeping the place clean. They are trying to figure it out. They are trying. They are trying. We have some of them 

that are very, very close to us and keeping us just ahead of them. 

Mr. HORN. Ms. Riley, do you want to add anything to this on 

training? 

Ms. RILEY. The one thing I wanted to address is the comment 

when you do train folks, and they go out and the sergeants on the 

beat says, you are not going to do this here. What we did to get 

around that, because that was the exact situation we encountered, 

we trained the people at the bottom levels of the organization the 

union workers and folks in the plant, but we didn’t train senior 

leaders. We learned, though, through working with the Baldrige 

criteria and other sources to start our training at the top and let 

it cascade down to the rest of the organization. Our leadership in 

our divisions were required to conduct the training. They did not 

do all the training, but they did train a cross-section of the organization in various training courses that we considered to be key. 

Mr. HORN. Admiral, do you want to add anything to this discussion? 

Admiral SCHRIEFER. I think the training, at least the experience 

I have had in the Navy, has been pretty significant. We have, in 

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fact, incorporated it through all levels. The problems that we have 

had have been in the implementation phase. And like I said, the 

training is mostly schoolhouse-type training. It is the academic, it 

is the actual application of the techniques. That is where the 

breakdown has occurred. 

Mr. HORN. Well, let’s use analogies with other types of training 

the services do. There is probably no group in the country that is 

more committed to training than the military services, and they 

have been way ahead of the rest of the country in a lot of areas. 

So are they treating total quality management different than normal training, or where are we missing it, besides the fact there is 

not much to implement it on when they get out of their training, 

and that is a frustration, obviously? But where are we missing it? 

Is it somewhere between the ranking noncommissioned officer that 

things aren’t happening, or how does it work? 

Admiral SCHRIEFER. Let me go back to a comment I made earlier. We are talking about change and changing a culture and how 

we go after things, and that requires involvement across the entire 

command spectrum. It involves the entire command to go at it. If 

you just have pockets within the command that no one understands and tries to implement it, it is not going to be successful. 

It’s got to be a command involvement in it. The just-in-time training, if that is applied properly, with the leadership fully knowing 

and understanding, you are going to have success. 

Mr. HORN. We had a hearing here a week or so ago on the Government Performance and Results Act, otherwise known as GPRA, 

and that is what struck us is there is a little bit of a sprinkling 

around on sort of the easy stuff, and there is no involvement of a 

total department or no involvement of a total major section of a department, and it sounds like the Government Performance and Results Act is going the way of the Total Quality Management Act, 

where, I grant you, if you can show some small examples in some 

phase and then spread it out, I am not going to knock that, that 

is a possible success and learning story on both the training and 

the implementation. 

But the question comes, then, how do you deal with, as was 

pointed out, all of these interactive processes that relate to your 

neighbors in the organization, and how do we get at, through leadership and other matters, of making that commitment? 

Mr. Wheeler, do you want to add anything to this? 

Mr. WHEELER. Just to reinforce your last comment, sir, the commitment has to be there. The people that are receiving the training 

have to know there is a reason for the training, rather than just 

getting their ticket punched. 

Mr. HORN. What should Congress do, if anything, to encourage 

more widespread application of the total quality management principles throughout the Federal Government, because right now they 

are working on a timed schedule with the Government Performance and Results Act? That is somewhat different. But if you are 

going to be successful there, total quality management is needed in 

high numbers to really make that work. 

Mr. WHEELER. One idea might be, again, picking up on your feeling, maybe a commanding officer who did some good quality management didn’t get recognized for the performance. Maybe there 

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ought to be something put in performance evaluations to make it 

a serious commitment on the part of all the senior leadership. 

Mr. HORN. Well, let me ask Admiral Schriefer for a little history. 

As I remember, when Admiral Zumwalt became Chief of Naval Operations, some of the old guard was driven mad by his Z-grams. 

But what it really was was a commitment to listen to everybody, 

whether they were the newest enlisted personnel or the most senior admiral, and I would think that made a difference. 

Now we were coming out of Vietnam, all of the services were 

having trouble on retention and all of that, but as you look back 

at your 37 years or so, what success stories have we seen in leadership in the CNO’s office to make a commitment to turn a very complex organization around? Who has been successful in that? Who 

has been the most successful in that area? Granted, in a 4-year 

term, you can’t do much. 

Admiral SCHRIEFER. I am not really qualified to judge all of our 

CNOs. I will say I think Admiral Kelso was really fully behind, 

supported, and believed in this program. He embraced it, and just 

about every aspect of the way he tried to run the Navy was incorporated in that. And it took his strong leadership, I think, to put 

the Navy out in front in this business. 

Now that wasn’t sustained, and one of the problems that we have 

got in the service, with all of our commands, is a commanding officer is in command for a relatively short period of time. And that 

is why I commented so strongly on the implementation process. If 

it is totally dependent upon the characteristics of a given commanding officer, and he leaves, and he hasn’t embedded that 

throughout the entire command, it is going to fall apart when he 

leaves. That is why it is so important to implement it throughout 

the command and have a good process in doing that, otherwise you 

are not going to have success, as we have experienced. 

Mr. HORN. Isn’t the only way to assure continuity, that it becomes part of the promotion pattern within the service—let me give 

you an analogy. Maybe it isn’t directly on point. As I remember, 

the Army was the first to recognize that they needed scientific officers at the general rank, and they just simply started rewarding 

that in terms of promotion. Scientific officers could advance as fast 

as many of the nonscientific officers, and that showed they welcome 

people in science and research and so forth on which the future 

Army depends. And the only way I know to get the incentives out 

is when you change the promotion system and the compensation 

system. Now we can’t do much about the compensation system, but 

there is a lot I would like to do on it and I will be doing on it if 

we can get everybody to sign off around here is what we did in the 

university system where I was. It took me 5 years, but it happened, 

and that was to reward management and to give management 

flexibility and to have a contract written out as to what are you 

going to accomplish in the next 6 months or a year and hold people 

to that. 

So I would hope that we could get this into the promotion system, if anything is going to happen, because I don’t know how else 

you keep people’s attention on it. But, again, that has to be done 

by the top management, both civilian and military, I would think. 

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Any other suggestions on this area? Do we have any other suggestions here? 

I think total quality was developed for manufacturing processes. 

Can it be successfully adapted to the Government environment? 

We have shown some of it has been adapted, but is that just a misnomer that people say, ‘‘Oh, well, that crowd in the private sector, 

it isn’t relevant to us, we serve the people.’’ Any bright answers to 

that? 

Admiral SCHRIEFER. The smart answer is that is a cop-out. 

Mr. HORN. That is a what? 

Admiral SCHRIEFER. A cop-out. 

Mr. HORN. Yes, it is, and yet I bet you run into it once in a while. 

Ms. RILEY. You can run into it in just about any company. The 

support functions like financial and marketing say, that does not 

involve us, it is only for manufacturing. But what we have found 

through the Baldrige process by observing all the companies that 

have applied all the information we know of what is going on out 

there, it applies. It doesn’t matter what type of company or what 

type of organization. You can be profit or nonprofit, manufacturing 

or small business or Government, and it just really doesn’t matter. 

We could probably implement it here at the Rayburn Building, if 

asked to. 

Admiral SCHRIEFER. Within our own organization, when I talked 

about reducing cycle time, we look at the manufacturing process. 

We didn’t even think of the service end of the business, and yet 

that is where we are finding most of the delays, in the paperwork 

end, not in the manufacturing end. We have gotten that down very 

well, but what we are looking at now is from the date we receive 

an order to the date we get paid, that is now our cycle time. And 

we would like to reduce that by 50 percent, in 45 days. But we are 

applying the total quality management, and have been, to the service end, in the accounting areas, in the order entry area, et cetera, 

and in—wherever we have tried to implement this, so long as we 

look at the metrics and develop the right metrics, what are we 

looking at, what are we looking for, we have made significant 

progress. And I am sure that within Government, whether it is the 

Federal Government or State and local, which I am going to be 

hearing from later on, this does work. 

Mr. HORN. One last question would be the setting up of a special 

office, as you suggested, Ms. Riley. You were reporting directly to 

the chairman, CEO, or does one depend on the personnel office? Or 

does one set up a special office that integrates broader considerations than personnel, if you are going to be successful in this area, 

and what do you see out there? I mean, when people try this—and 

all panels might want to participate in this question and file it for 

the record, we will put it in here without objection—and what is 

the best way to get down to the nitty-gritty and organize and pull 

the pieces together? 

You have somebody who has to monitor this. The chairman, the 

Chief of Naval Operations, or chief of staff, whatever, are running 

around with other obligations, but they have got to have somebody 

that keeps them informed, and that they can pat on the back and 

focus in the right direction and back them up, and I assume that 

would be a special office. Now, is it just a one-shot affair, or is that 

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a special office forever, if you are really going to face up to getting 

this into the system? What is the best way to do it, special office; 

let the personnel people do it, what? 

Ms. RILEY. Because personnel or human resources management 

is certainly one of the major processes of teaching, that needs to 

be addressed, as we empower our people and put together a human 

resources-type process so they can get their jobs done and come up 

with new work design approaches. However, I think TQM is the responsibility of the leadership. There needs to be a person on the 

leadership team that acts more or less as a consultant to help train 

the leadership, to help advise the leadership or consult with them 

on TQM principles, to act as an overseer who is pulling all of this 

together, because you are looking at the total business. Ideally, the 

leadership team of a company, you try to get them to behave like 

a board of directors. Thus they get rid of their functional responsibility, and every executive around the leadership table takes responsibility for every part of the business. We end up with engineering equally responsible for human resources and marketing 

equally responsible for engineering. That is the ideal situation. But 

even in that situation, you need someone sitting at the table with 

TQM knowledge that constantly acts as a consultant to the leadership group. 

Mr. HORN. Any other comments? 

Admiral SCHRIEFER. I think her comments were right on. It is a 

leadership issue. In fact, that is why the Navy called it TQL, to 

wrap it right up in there, and it has to come at the highest level, 

and he has to be advised, and he has got to support it. 

Mr. HORN. Well, I think you are right, and I guess, just based 

on my earlier questions, what concerns me on the military side is 

the feeling that very few senior military or civilian leaders believe 

in or practice total quality management or leadership, and in view 

of the critical need for senior officers and senior civilian personnel 

to embrace and support that effort. I guess I would ask you, what 

is your estimate, whether it be in your industry, nationwide—you 

point out your competitors are coming in to look at what you are 

doing—or whether it be where you are consulting or looking at who 

Arthur D. Little helped over the years, in the case of the Admiral 

and the Navy, what percent of people do you think in these organizations just really don’t want to spend their effort on it? And is it 

a major first job in saying how important it is and get them involved so they get excited by it; and after the excitement do we still 

have a group that says, ‘‘Oh, well, I like the old way of doing 

things?’’ You mentioned a few left your firm with that attitude. 

Mr. CONCHELOS. Yes, exactly. 

Mr. HORN. Or did you force them out? 

Mr. CONCHELOS. No. 

Mr. HORN. They decided this wasn’t the way they wanted to go. 

Mr. CONCHELOS. Exactly. That one particular day when the CEO 

called the entire place together to explain about the suggestion box, 

that he was really the one at fault, that was really our turning 

point. People really understood this guy was serious about this, 

and no matter what they may be doing in the background, they 

were not going to change this, and they felt bitter—they wanted to 

be the boss. They could not accept the cultural change, and this is 

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exactly what this is, this is a cultural change. This is not a flavor 

of the month, and people have to understand that. It is—unfortunately, American business today wants to see their invested dollar 

grow within 2 or 3 days. This is a minimum of a 5-year project. 

When we undertook this, we understood that, our CEO understood, 

because understand, he was the one footing the bill for this, he was 

the one paying money; not so much us, but he was. We were putting the time in. He understood this was a minimum of a 5-year 

program. We weren’t going to see any results for 5 years. That is 

what we went in looking at and understanding. 

The results we have gained since then have been absolutely phenomenal. Our turnover rate went from 41 percent to less than 2 

percent this year. It is a major cultural change. And I just wanted 

to say, we have been talking about leadership so much, and Harry 

mentioned this morning that people at the regionals that we are 

giving our presentations to do ask us, how do I convince my CEO 

this is the way we have to go in order to stay competitive? And I 

had to look at this gentleman and actually tell him that I didn’t 

know how to answer the question because I did not have to convince my CEO, my CEO convinced me, so it was a completely different relationship. 

Mr. HORN. Well, you raise an interesting point. We did have 

great resistance in this country for a long time to any change, and 

the prime example was the automobile industry, of being so backward it was unbelievable. But that is when it really comes to getting informed, members of boards of directors or boards of trustees, 

as the case may be, get a commitment there from people on the 

boards that would get the CEO in a good mood enough to say, hey, 

your future here is dependent on you turning this organization 

around. And the danger, of course, and I have seen it in universities, you can turn it around. What happens when the person 

leaves? 

I think of Robert Hutchins at the University of Chicago, probably 

the greatest educational reformer of this century. The minute he 

got out of there, however, they started going back to their old traditional university ways. That doesn’t mean they aren’t a fine university, they are. They could have been a better university if they kept 

what he started there in terms of interdisciplinary connections between disciplines and all of that, and they didn’t. 

I asked him one night when I had dinner with him, because he 

was my intellectual mentor, I said, how did you get away with all 

you got away with? He said, they were flat broke when I got there, 

they had to listen. And, of course, tenured faculty and other 

tenured people in Government, that is one of the problems. They 

sort of say, oh, we will wait this craze out and do something else; 

you know, it comes, it goes. And you have to break through that 

and say, we are serious and future administrations, regardless of 

party or Congresses, regardless of party, are going to be serious, 

too. 

So anything else to add on this? 

Well, you have been very kind and patient with your time. I appreciate all of you coming. We are now going to take a break, and 

we will recess until 1:45, with panel three, starting with Mr. Wall 

from Ohio and Mr. Frampton from South Carolina. Some exciting 

96

things are going on in the States, and we want to hear about them. 

So we are now in recess. 

[Whereupon, the subcommittee recessed at 12:20 p.m., to be reconvened at 1:45 the same day.] 

Mr. HORN. We have our third panel. And if you gentlemen 

wouldn’t mind, please stand, raise your right hands. 

[Witnesses sworn.] 

Mr. HORN. And we’re going to start with Mr. Wall, the director 

of the Ohio Office of Quality Services. We thank you for coming 

and sharing your ideas with us. 

STATEMENTS OF STEVE WALL, DIRECTOR, OHIO OFFICE OF 

QUALITY SERVICES; AND GREG FRAMPTON, EXECUTIVE ADMINISTRATOR, SOUTH CAROLINA DEPARTMENT OF REVENUE 

Mr. WALL. Thank you. And good afternoon, Mr. Chairman. I appreciate the opportunity to talk a little bit about the lessons we’ve 

learned in Ohio trying to make our quality improvement efforts 

work. I hope to be able to share with you both some of the successes we’ve had and some of the real frustrations we’ve had as 

we’ve moved forward. 

But before I begin, I want to give you a quick word about terms, 

and that is that most of us in Ohio really are sick of the term 

‘‘TQM.’’ It doesn’t come from that it stands for anything bad. What 

it comes from is that it has become jargon. It seems like every consultant that comes along and wants to sell a new course or a new 

book comes up with a new word. I recently received a brochure that 

said, come to this new course, it goes beyond TQM. It’s about customer service, too. I don’t think there’s really an understanding of 

what this is all about. 

It begs the idea that what we’re trying to do is implement a program. And so that word is an end in itself, and our efforts are a 

means to an end. We call our efforts Quality Services through Partnership simply because those words mean something to us about 

our union-management partnership, but primarily what we talk 

about is we’re simply trying to become a high-performance workplace, one that both gives value to the customers and one that’s a 

better place to work, and these are just simply the best practices 

we use to try to get there. 

And learning these best practices are not hard. There’s a gradeschool teacher in Westerville, OH, who teaches kindergarten kids 

how to use parados and fish bones and even control charts to improve the process. This is not hard to do. What’s hard is to get people to change and do things differently from the way they’ve always 

done them before. 

I read somewhere that the only people that really welcome 

change are wet babies. And I’m not sure that that’s necessarily the 

case, but I saw the this great Calvin and Hobbs cartoon that I 

think sums it up. And Calvin and Hobbs are flying down the road 

in a wagon, and Calvin says to Hobbs, ‘‘I thrive on change.’’ And 

Hobbs says, ‘‘You? You threw a fit this morning because your mom 

put less jelly on your toast than yesterday.’’ And Calvin says, ‘‘I 

thrive on making other people change.’’ And I think that really is 

what makes people mad. This is about giving the people who do the 

97

work and who deal with the customers the tools and the power to 

make things better for them. And it really is a better full kind of 

tool if we can just get the powerful managers to let them do that 

and to support them doing that. 

Three quick stories I want to tell about our QStP efforts. One of 

them is the bottom line numbers, what’s been done, and the results 

we’ve achieved. Another has to do with the cultural changes that 

are needed and are still needed in some cases to make this work. 

And the last is how it affects people’s lives. 

We started out slow, but we expected to start out slow, but the 

results are really coming in. We’ve got a long way to go, but we’ve 

come a long way. We’ve trained over 50,000 employees in a 3-day 

basic training session. And I emphasize basic training because 

you’re never done learning on the principles and processes and 

tools. 

Each department has a steering committee that’s in charge of the 

transformation effort made up of half the union and half management members. We have a quality coordinator for each agency and 

a union liaison for each agency. And we do our training in partnership, both union and management, and we do our training ourselves. We think that’s important to cascade it down. 

One of the most important things we’ve done is develop a cadre 

of over 1,000 facilitators. Most of the teams that I’ve been on prior 

to this effort I would more call clumps than I would call teams, not 

getting a whole lot done. And the facilitators really step in and 

make it work. They make it happen. They follow the process. And 

you’re not just throwing people to the wolves. 

At this count, we have about 1,600 formal process improvement 

teams currently underway trying to make things simpler, faster, 

better, and less costly for the citizens. But I want to admit something that I heard from the testimony this morning, and that is we 

fell into the same trap as where we trained a lot of people and 

didn’t have much for them to do. We knew we shouldn’t do that. 

We tried not to do that. We did it anyway. 

What happened was it was just easier to train people than it was 

to get projects started. We assumed that it would take the same 

amount of effort to both. We had to go back and redevelop our 

training so that it specifically had them come up with projects during the training. We had to go out with the supervisors and help 

them through a ready-set-go process to find teams that would actually work; and finally, our Governor had to stand up in front of his 

department directors and say, ‘‘I want to see more teams. I want 

to see more teams. I’m going to be watching.’’

About 3 months after I first started the job, the Governor called 

down and said, ‘‘Where are your results?’’ He not only said, where 

are your results, but, where are your home runs? 

And I tried to explain it didn’t work that way. And I got a memo 

the next week saying, where are your results? And every week for 

the next 6 months I think I got a memo saying, where are your results? And I scoured high and low and I was able to come up with 

a one-pager with four or five fairly feeble excuses for how we had 

done things better. But a year later we put together our first results book, and that results book had 14 perfect examples that had 

been implemented that had been working well. And every 6 months 

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since then we’ve doubled in size until our most recent one, which 

I provided a copy with, has 134 different teams and accounts for 

a legitimate $47 million in savings. 

About 25 percent of the teams didn’t save a nickel. Simple things 

like reduced long, long lines; tens of thousands of busy signals not 

being answered anymore; permits that take days to get done instead of weeks to get done; snow plow blades that don’t blow up 

when you hit a bump, and bolts don’t go off into the oncoming traffic. 

Recently we had a hostage situation where someone was disgruntled, went into our Bureau of Workers Compensation and took an 

employee at gunpoint because he didn’t think they were getting 

what they were worth. Instead of knee-jerk reactions, the first 

thing the Governor did was put a process improvement team and 

a QStP facilitator to take a look at it. So things are happening. But I do want to say that I don’t think the $46 million represented in this book are the big deal. I think the big deal is the 

thousands of names in here of State employees who are thrilled 

about serving their customers better, have better skills than they 

used to before, and can’t wait to use the same process for the next 

problem and the next problem and the next problem. 

I want to go on to the cultural changes real quick and tell you 

that we also made a mistake. We tried to do it to our unions rather 

than with our unions. We had to take a step back. We had to learn 

from the private sector a little bit about how to form partnerships, 

and we still struggle with that, but I feel very good about how our 

partnership is forming. 

We got help from Xerox to begin with, and we made a mistake 

where we tried to copy them. We’re not Xerox. We don’t have the 

same culture. We had to adapt these things rather than adopt 

them. For instance, one of the first things we had to do was learn 

that we actually did have customers. That came as a shock to people 5 years ago, I’m afraid to say. It’s not much of a shock now. 

But the private sector model didn’t help us to figure out who our 

customers were. We don’t sell goods and services the same way. 

I’ll give you an example. I stay at a lot of nice motels, and they 

really do a good job of treating me well. They get me in, and they 

get me out. They do things very quickly and efficiently. They know 

who their customers are. It’s the people who eat there and sleep 

there and they want to come back over and over and over again. 

Now, let’s turn to the Government for a second. I used to work 

in corrections for about 7 years. I’m going to go to a correctional 

officer and teach him about customers, who do I tell him the customer is? Is it the people that eat there and sleep there and we 

want to come back over and over again? I mean, obviously not. I 

don’t think so. Their definition of customers was to delight and 

please the customers. I got nothing with delighting and pleasing 

them. But I’m not sure the cops or the inspectors or the regulators 

think that their job is just to say yes and delight and please. 

We had to redefine it. Our goal for customers is to help them be 

more successful. If we can delight and please them, too, great, but 

we want to help them to be more successful. 

We even had one group of people who decided that their customers weren’t even born yet, some folks from the historical sociVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00102 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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ety, trying to decide whether or not to preserve things or use 

things. It makes it kind of hard to survey customers when they 

haven’t been born yet. We had to figure out ways to adapt some 

of these kinds of techniques. 

Our mid-level managers were a serious issue for us, continue to 

be a serious issue. We spent a lot of time telling people what not 

to do; forgot to tell them how to lead, how to coach, how to remove 

barriers. And the last thing I think we did poorly that I would like 

to do over again is we tried to do everything everywhere all at the 

same time. We became a mile wide and an inch deep. 

I think it’s really critical that you focus your limited resources 

on the champions that want to make this work and leave out the 

folks who are kind of retired but just haven’t left yet, and later 

they’ll come along after they’ve seen some results. 

The final thing I want to say is that one of the best parts about 

this, I think, is how it affects people’s lives. I heard a speaker earlier talk about what motivates folks to get into it, and I guess I’m 

going to disagree. I believe strongly that it’s not the money that 

does it for folks. I’m not sure it’s even the recognition. I think it’s 

the chance to be in on things and to make a difference; to not check 

your brain at the door, but to really do something different. The 

people that are the most frustrated with the long lines and the 

busy signals and the waste are the folks who have to deal with 

those people all the time. They want to make a change. And that’s 

what this does. 

We hold an event every year called Team Up Ohio. Last year 

2,000 people crowded into the convention. People watched 130 excited, proud State employees talk about how they serve their customers better. You couldn’t pay money for that kind of enthusiasm 

no matter what you did. It was fantastic. We also have a competition where people talk about things. And at one forum, I heard one 

person say, I’ve hated my job for 23 years, but on Tuesdays from 

3 to 4:30, I love it because I get to make a difference. 

Another woman said, if they make us feel good, we’ll make them 

look good, referring to their managers who let them do things. 

I guess I want to wrap that up by describing one more cartoon 

I saw, and that was two dogs are walking down the road together, 

and they’re kind of grumbling with each other. And one dog turns 

to the other and says, ‘‘It’s always sit, stay and heel; never think, 

innovate and be yourself.’’ If we really want to make a difference 

in Government, I think that’s what we do is we get those people 

who do the job, who do the work, who know the work best, the 

power, the tools, the skills to serve their customers better. 

Thank you. 

Mr. HORN. That’s an excellent statement, confessions of where 

things went wrong, and success stories, and I think that’s reality. 

And I’m grateful to you. I thought you did an excellent job in your 

presentation also. 

[The prepared statement of Mr. Wall follows:]

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Mr. HORN. Mr. Frampton, we’re delighted to have you here. 

We’ve had South Carolina testify before this committee and the 

last Congress. The State is way ahead of almost every State in the 

Nation except maybe Oregon. You are right on the path on the 

benchmarking of various programs, and you’re way ahead of the 

Federal Government in terms of being results-oriented. So I look 

forward to hearing your testimony as executive administrator of 

the South Carolina Department of Revenue. Welcome. 

Mr. FRAMPTON. Thank you, Mr. Chairman. 

When we first started this process we didn’t really try to set out 

to make people like paying taxes. What we tried to do in the process was to make sure that when they were involved with us, that 

the process was simple. It was responsive. And the people that we 

dealt with were courteous and polite. 

I would like to quickly review our management system that we 

use. It basically involves strategic planning, total quality management, and performance measurement. And we like to convey to our 

employees that strategic planning is what we want to do, total 

quality management is how we do it and the performance measurement piece is how we’re doing, and we set those out separately 

even though they could be rolled obviously under the total quality 

umbrella. We felt like they needed showing specifically because it 

was so important. 

On the strategic planning part, we found and discovered that the 

process was really more important, or as important, as a product. 

We built in a lot of customer input and customer involvement, 

much to the amazement of people when we went out and contacted 

them that we really were interested in how they paid taxes, how 

the system worked for them. It truly involved our employees. And 

it really helped enhance our enterprise view of our organization as 

opposed to our stovepipe view. And we tie basically back from the 

strategic plan to the performance measurement piece, and the cyclical part of that process really gives us the discipline and accountability to move forward on it. 

On our total quality portion, we emphasize three major areas: 

our customers, our systems, and our employees. We do reach out. 

We ask our customers what they want. We do not assume that we 

know and we build a lot of trust, really, through that process. We 

have constant feedback systems. Our branch managers out in the 

field are required, for example, every month to visit a local CPA 

firm or visit a tax manager of a small business and say, what are 

your problems? What can we do to improve our service? What are 

the future trends that you see? 

We’ve involved people in implementation of new tax systems. We 

go out to the business community and give them some of our proposals, work with them to implement good responsive tax processes, involving industries into some of our teams and analysis. 

The trucking industry came in and worked with us on a team, a 

joint industry-government team, to improve that particular tax 

process. And we think we really do understand what our customers 

want, and we’re trying to move to customize service for our citizens 

rather than a one-size-fits-all-type mentality. 

From a systems thinking standpoint, the broader we define the 

system, we think the greater opportunity is for improvement. A 

109

very quick example is when we eliminated a lot of complexity in 

our tax filing system and conformed to the Federal Code in 1984, 

we reduced our numbers of errors on tax returns from 22 percent 

to 41⁄2 percent. That’s 330,000 rejections as opposed to 60,000 rejections. And you can guess what we were doing in that particular 

arena. We were working on nondeliberate errors that the taxpayer 

public had made and confused them in that complex process. 

Some examples of a systems perspective that I think are very encouraging, there is an initiative called STARS which is a simplified 

tax and wage reporting system that the IRS and States and Social 

Security Administration are involved in where they’re actually 

looking at reporting that tax and wage information into one source, 

and then the users of that information would go in depth and use 

what they wanted to, eliminating a lot of the cost to the public, and 

reporting to all of these various entities that we’re involved in. 

When you start looking at systems perspective, you have to start 

asking the question, how many people need to be involved in collection activities? In the State of South Carolina, we have many agencies involved in collection, the county, the cities, and we’re dealing 

with the same customers. As we redefine the enterprise, we see 

that Government really shouldn’t be stovepipe agencies, but we 

need to look at how we deliver service and the niches that our Government agencies should be involved in. 

Third element being our employees, we think we have tremendous capacity in our work force. I love Dr. Deming’s quote that ‘‘the 

greatest waste in America today is the failure to use the abilities 

of our people.’’ We believe that, and we are sobered frequently by 

looking at the Milliken Co.’s benchmark in employee involvement. 

They average 60 improvement suggestions per employee per year. 

Even though it took them 4 years to get to one per employee, it’s 

an incredible statistic that we look at very often to see how we’re 

really stacking up, and we frankly don’t stack up too well to that 

type of world class activity, trying to get management to take responsibility for employee failure and stop blaming employees and 

improving the system. 

We really are constantly pleased and amazed at the commitment 

ability of our work force. We try to focus in our organization not 

on teams as much as the natural work team. What we want to see 

organizationally is that natural work team working together every 

day, using the tools, using the process to improve that system. And 

we see teams surfacing as a by-product of that activity. 

In the performance measurement area, there’s a lot to overcome: 

fear of measuring oneself and how that measurement system might 

be used. We found that we’ve measured the wrong things. In fact, 

they’ve been driving us in the opposite direction, away from voluntary compliance, when we measure too hard on the collection activity. 

We see a lack of emphasis, so often on dollars saved the tax-paying public with compliance. We think that we’ve got an environment today that rewards mostly if you save budget dollars. We 

need to see more of a view on what does it cost the public to comply 

with your laws. If you save a dollar on the administrative cost, that 

goes to the bottom line just as fast as a tax cut does. 

110

Some of the results that we’ve seen organizationally, since, basically, 1991, we began a downsizing. We’ve had a 13 percent reduction in our staff. Workload has increased through most of our common measures 25 percent. And, basically, we decline the option to 

cut programs and decrease customer service systems. 

Our total collections are up 32 percent. Our enforced collections, 

which are a measure of our dollars which we have to chase, are up 

94 percent. We’ve put about $378 million in the till after inflation 

through those efforts. Dollars collected per employee is up. Cost of 

collection is down. Our customers think we’re doing a pretty good 

job. We survey annually through the University of South Carolina 

on April 15th to make sure that people know when we’re touching 

them with our system, and we are showing about a 71⁄2 percent dissatisfaction rate, which needs to be worked on. But we think we’re 

beginning to give people what they want out of our process. 

Some of the barriers that we’ve seen, quickly, mandates seem to 

be a problem sometimes. We think that, in South Carolina particularly, this has been done by invitation. It’s been a grassroots effort, 

and we think it should be something that should be encouraged. 

People should be persuaded to move into this process. 

Delegating to the quality department, with all due respect to 

Steve, I know he understands that it’s very, very important to keep 

top management involved in this process, and for him, for the quality departments, to serve as consultants to that particular role. Accounting teams have been a problem. We want to focus on our natural work team to make sure the improvement is going on there. 

We’ve seen soft skills being another difficulty where people are not 

really involved in process analysis and measurement of the system 

and a little too occupied with teams. 

We’re delighted to be here today. And we will certainly be happy 

to answer any questions, Mr. Chairman. 

Mr. HORN. Well, I thank you very much for that very helpful 

statement. 

[The prepared statement of Mr. Frampton follows:]

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Mr. HORN. What I’m going to do is concentrate on clarifying some 

of the testimony first, and then I’ll have questions for both of you. 

But since you just spoke, Mr. Frampton, let me start with you. 

There are just a couple of things I want to know in relation to the 

testimony. 

One that interested me and would interest all Members of this 

subcommittee is the statement you make on the bottom of page 3, 

the major quality initiatives working with other Government entities to simplify and enhance delinquent debt collection. Since the 

debt improvement collection bill was authorized by this committee 

and is now the law of the land, we’re very interested in how agencies go about structuring themselves to encourage more effective 

debt collection. I would just like to hear from you how you do it 

in terms of steps one, two, three, four, five, and let’s see where we 

are. And I’ll have a few more questions on that. 

Mr. FRAMPTON. All right, sir. We basically began with the ability 

to offset our refunds for debts from State agencies, the Federal 

Government, or the Internal Revenue Service. 

Mr. HORN. Could you speak into the microphone a little more? 

It’s not picking up up here. Just raise it a little. They’re crazy 

microphones. That should be the first total quality effort for the 

House. Go ahead. 

Mr. FRAMPTON. We began for offsetting refunds for delinquent 

debts for the Internal Revenue Service, other State agencies, county government, and city government. That’s been a very, very successful program for us. In South Carolina, we’re up to about $30 

million for other agencies. Recent legislation has allowed us to go 

into the debt collection business for other State agencies and gives 

us the ability to contract. 

Mr. HORN. When you started this effort, what was the amount 

of the delinquent debt that the State of North Carolina had in both 

the Revenue Department as well as all the other agencies? 

Mr. FRAMPTON. I do not have a figure for the consolidated debt. 

Mr. HORN. Well, if you do, let’s put it in the record at this point 

without objection if you could find the figure, because I think it’s 

a benchmark here of what did you face, and then what has this 

system done to change that picture? 

Mr. FRAMPTON. All right, sir. We move from that basic refund 

offset process. And we’re beginning today to contract with our Department of Health and Environmental Control. 

Mr. HORN. With whom? 

Mr. FRAMPTON. Department of Health and Environmental Control. 

Mr. HORN. OK. 

Mr. FRAMPTON. On some of their water fees, we’re looking at 

what is known as a second injury fund. That’s on some of their uninsured workers’ compensation claims. We’ll move into that process 

with them, and frankly, it’s on a little bit of an experimental basis. 

But we have tremendous tools available to us to collect debts that 

are not available to a lot of the private debt collection services. So 

what we’re doing strategically as an agency—a lot of our smaller 

debts that don’t require a lot of the heavier tools we’re going to 

start privatizing, pushing off. We’ll focus our tools on the major 

debts that we have from our organization and other State agencies. 

126

We have the ability to close businesses, for example, and levy on 

salaries, et cetera, which are quite effective in debt collection. 

Mr. CHAIRMAN. Let me ask at that point, in terms of dividing 

your debt into the smaller debt, which you say you will privatize, 

and the larger debt, I take it you have a State income tax, do you? 

Mr. FRAMPTON. Yes, we do. 

Mr. HORN. OK. What’s your idea of a smaller debt versus a larger debt? 

Mr. FRAMPTON. Well, we’re looking right now at our initial phase of dropping off everything under $500. 

Mr. HORN. So you turn that over to private bill collectors? 

What would they get in turn for collecting that debt? 

Mr. FRAMPTON. Our current contract is 17 percent. 

Mr. HORN. Seventeen percent. 

What did you do before you had the private bill collectors? Did 

the agency try to collect at all itself? 

Mr. FRAMPTON. We did. But what happens is you lose your focus 

on some of the higher priorities when you have the mountain of 

debt coming to you. And this is just the way of us prioritizing 

what’s important and not leaving anything on the table. 

Mr. HORN. Tell me—both pre-quality management and post are 

in your plan. How does the agency, when it handles the larger debt 

and originally handled all of the debt, how were you structured? 

Was there a telephone bank? Did you first give them sort of automated notice at all, that there was a debt and you should do it by 

X date, or did you have a phone bank in there somewhere? I’m just 

curious of the mechanics. Obviously, I’m interested in what the Internal Revenue Service will be doing on this problem. 

Mr. FRAMPTON. Our debt collection process was basically, initially a notice, a second notice, or a referral into telecollections 

process. If no results there, a lien was issued. 

Mr. HORN. What was the collection process? 

Mr. FRAMPTON. Telecollection process. 

Mr. HORN. Telecollection. OK, by telephone? 

Mr. FRAMPTON. Right. 

Mr. HORN. Three notices essentially, and then it’s the telephone. 

Mr. FRAMPTON. And if no results there, then referred into a lien 

status, and then that goes out to the field staff to work. 

Mr. HORN. And they administer the lien essentially——

Mr. FRAMPTON. Yes. 

Mr. HORN [continuing]. The field staff? And then what happened, 

did somebody actually call on the person or what? 

Mr. FRAMPTON. Various techniques, depending on what you 

might find to collect. It may be a levy on salary. It might be a levy 

on a bank account. It may be a telephone call again from the local 

people, a knock on the door. 

Mr. HORN. Now, does the State Department of Revenue have 

branches throughout the State of South Carolina? 

Mr. FRAMPTON. We do. 

Mr. HORN. Or how do you work with that people power? 

Mr. FRAMPTON. We have nine branches. 

Mr. HORN. And so that was it. And you weren’t happy with that 

because too much time was wasted on some of the smaller debts. 

And then that’s what led you to privatization of the smaller debts? 

127

Mr. FRAMPTON. Privatization was one of our efforts started initially with our out-of-State collection. Us simply not having the 

time or the resources for us to chase somebody to Michigan or Kansas to check a debt, so we began with privatization of that particular area. And I must tell you that it’s a pretty significant cultural change for an agency to move that collection off to a private 

side, and that did well for us and really was the foundation for us 

moving into privatization with some of our in-State debts. And we 

started first there with everything that was over 2 years old, that 

it was obvious we weren’t going to either get to or hadn’t been successful with. 

Mr. HORN. Do you have a law in South Carolina that would be 

a privacy law, a confidentiality law, that one cannot reveal the taxpayers form and status and so forth? Do you have such a law? 

Mr. FRAMPTON. Absolutely. 

Mr. HORN. OK. Is there any problem at all living up to that law 

when you privatize the debt to private bill collectors? 

Mr. FRAMPTON. None whatsoever. We only send to private bill 

collectors those debts that there is a lien recorded publicly, and the 

information in the lien is a matter of public record, and that’s the 

information that the private debt collectors use. 

Mr. HORN. In other words, you give them the amount owed and 

the address? 

Mr. FRAMPTON. That’s correct. Type of tax and basic information 

that would be included on a courthouse lien-type record. 

Mr. HORN. You mentioned that’s tough on an agency when 

they’ve been doing this job for years. I don’t think South Carolina 

has employee unions, or am I wrong on that? 

Mr. FRAMPTON. We do not. 

Mr. HORN. You do not. But whether you have unions or not, just 

the work force generally, I take it from your comment, was sort of 

upset that part of the agency business was being delegated to a private entity. 

Mr. FRAMPTON. Well, it was a significant change in what we 

were accustomed to, but the fact of the matter was we weren’t 

going to get any additional employees from our legislative process, 

the number of debts and liens were stacking up, and something 

needed to be done. We did bring it in incrementally and slowly on 

a trial basis and worked out a lot of the problems in that fashion, 

because we started with out-of-State, went to over 2 years old, and 

now on the verge with going to everything under 500. That’s been 

an incremental way and softer on bringing it in. The public is not 

always as pleased with this process as might be. Some of these collection processes are pretty difficult. We’ve had to manage that and 

make sure that they collect it according to our standards and our 

style and the way we treat our customers in South Carolina. 

Mr. HORN. Now, on your out-of-State do you just open for bid or 

contract, or how do you pick the person in Kansas to collect that 

debt for you? 

Mr. FRAMPTON. We will bid with a principal contractor. 

Mr. HORN. Is that a nationwide contractor? 

Mr. FRAMPTON. Yes. They have to have national ability. 

Mr. HORN. Has that contract been let yet? 

Mr. FRAMPTON. We were in our third contract, I believe. 

128

Mr. HORN. Who has the contract? 

Mr. FRAMPTON. FCA is the current contractor, Financial Collection Agencies. 

Mr. HORN. I’m not familiar with them. They are a major national 

firm, I take it, represented in every State in some way? 

Mr. FRAMPTON. That’s correct. 

Mr. HORN. That’s why you picked them. 

What about the situation of deadbeat dads? Some of your colleagues who are State commissioners say that our debt collection 

bill, although it didn’t apply to the IRS, has permitted State tapes 

to be matched against Federal tapes as to where some of these people who have skipped across State lines might be when you’re trying to enforce a court order issued by the State in a divorce case, 

and they’re leaving the State, figuring that order won’t apply to 

them anymore. Is that of concern in South Carolina? Is that a problem? 

Mr. FRAMPTON. We don’t administer the deadbeat dad collection 

process. 

Mr. HORN. Who does? 

Mr. FRAMPTON. Our Division or Department of Social Services. 

Mr. HORN. I see. And are they doing what you’re doing to try and 

track people down and privatize that operation, or what? Because 

a lot of them are in other States. 

Mr. FRAMPTON. I do not know the answer to that. 

Mr. HORN. OK. Well my staff can perhaps followup with social 

services, since you are privatizing, and we obviously had a problem 

here in Washington with the thought of it even in the Internal Revenue Service. So I’m very interested in that. When other States are 

making progress, the Federal Government isn’t making much, but 

we’ll get there eventually. 

Now let’s see if there’s anything else I wanted to ask on the testimony. 

You note here that, on page 5, through the efforts of the entire 

agency, we’ve made significant headway on our journey. While it 

is a journey that does not end, we can identify some significant 

milestones. What I was particularly interested in was enthusiastic 

frontline participants. If you could elaborate on that a little, in 

what way were they enthusiastic, and what did that do to help 

achieve the goal of total quality management or, as the Navy says, 

total quality leadership? 

Mr. FRAMPTON. Through two different sources. One, when we 

were casting our last strategic plan, we used some external folks 

from the university to come in and have some focus groups with 

our employees. They reported back to us, and almost to the person 

those individuals who were involved in the quality process, involved with teams, been through the training were much more engaged and enthusiastic about what they were doing. 

No. 2, in a recent assessment that we’ve gone through with our 

State Total Quality Forum, which is a Baldrige-like assessment 

process, the folks who came in from the private sector, one of the 

things that they reported back to us was the enthusiasm of the 

randomly sampled frontline participants and what was going on in 

the organization. 

129

And we feel like that our people really are, throughout top to bottom of the organization, real players with us. They feel that, they 

understand that, and they know that. We think the enthusiasm 

comes from the fact that they know they can make a substantive 

change to the organization. 

Mr. HORN. You also noted barriers coming down. What were 

some of the major barriers you and other agencies have faced in 

this regard? 

Mr. FRAMPTON. I think early on, the perception that we were 

moving into some type of process that this would be a democracy, 

and we would take a vote on every decision that was made. We had 

some major rejudgments in that particular area in making employees understand that they were going to participate in the process, 

but ultimately somebody had to be responsible for a decision. There 

was a lot of misunderstanding about that initially. 

Mr. HORN. That sounds like a university government system. 

And Mr. Calhoun, a citizen of your State, certainly believed that 

if one person objected, why the whole works ought to stop. But I 

take it South Carolina is beyond Calhoun’s philosophy at this 

point. 

Mr. FRAMPTON. It really is a new challenge for a lot of our leadership. We had to make sure that our people really were up to the 

task of being able to take some fairly direct criticism on their style 

and the way they’ve done business in the past. And that has not 

always been easy. 

We started early on with some surveys in our process, all employee-type surveys, and we didn’t find it to be particularly productive. In several instances we saw some agencies where the survey 

was used adversely against some of their leadership in a political 

environment. We also saw in some instances where the surveys 

would talk about the management not being up to par, and the 

management being really the group that you need to lead this effort. We haven’t seen where it really does much good to start off 

calling people names and calling processes bad or whatever. That’s 

not a good way to start a process. 

Mr. HORN. I believe you said that you have a number of collection agencies in your revenue department, or did I misunderstand 

that? Do you have one collection process within the department, or 

do you have several? 

Mr. FRAMPTON. Yes. We have a basic collection process, but it’s 

multifaceted. 

Mr. HORN. Oh, I see. So it’s directed by one operation. It isn’t 

separate collection agencies within the department? 

Mr. FRAMPTON. No. 

Mr. HORN. I didn’t think it was, because I wondered what centralization had occurred among those agencies. And on the multifaceted side, is any competition ever built in between some of the 

facets of the one collection agency, and is that helpful in achieving 

total quality management, or isn’t it? 

Mr. FRAMPTON. We don’t have the cost accounting processes that 

we need to really build a competition in yet. I think where the competition is going to come down the road is that if we don’t have 

good measurement systems in our agency and know what our costs 

are, there will be people from the private sector who will. And it’s 

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going to be very difficult if you go to the table and say, well, you 

can’t measure me, and you’ve got someone there who can measure 

their effectiveness, I think I know who’s going to get the business. 

And that’s the message we’re taking to our professional businesses: 

You better get going because there are other people out there who 

will be glad to do your job for you. 

Mr. HORN. On the collection process, with the other State agencies, where debts are incurred and maybe not paid off I take it, do 

you have a responsibility to supervise that collection, or is that left 

to the other State agencies? 

Mr. FRAMPTON. They will certify the debt to us. 

Mr. HORN. I see. They turn it over to you? 

Mr. FRAMPTON. That’s correct. 

Mr. HORN. And it then goes through your process? 

Mr. FRAMPTON. That’s right. If there’s some difficulty with the 

substance of the collection, of accuracy of the debt, then that gets 

referred back to the originating agency. 

Mr. HORN. Now, is there any incentive built into the South Carolina debt collection law or laws that would encourage agencies to 

spend more time on debt collection than perhaps they have, since 

often the agency is thinking of, gee, you know, forget the debt. This 

is national experience and Federal experience. We’re going ahead 

to do our real mission, and many of the agencies do not regard that 

as part of their mission. Obviously a debt collection agency would 

be part of their mission. But the more old line departments, I suspect—I know in the Federal Government, and with rare exception, 

in many States, they just say, well, that’s getting in my way, we 

don’t have time for that; and the debt accumulates. 

I’m curious how you deal with that. Do you give them any incentive if they collect the debt or—in other words, if they didn’t collect 

it, they wouldn’t have any money, but if they brought in some 

money to the Treasury, do you give them a percentage or anything 

like that? 

Mr. FRAMPTON. Well, the dollars usually flow back to the agencies, but the incentive really is on our side. We actually go out and 

market our services, particularly the refund offset services. We get 

$25 a match on that particular process, and it accounts for now almost 10 percent of our budget. So we’re out actively marketing that 

particular service with agencies. And you know, it’s a what-canthey-lose-type proposition. 

Mr. HORN. And do they get to keep the money——

Mr. FRAMPTON. Yes. 

Mr. HORN [continuing]. And spend it on anything they want, or 

does the legislature have to reappropriate it? 

Mr. FRAMPTON. It varies from agency to agency and the kind of 

dollars, but generally goes back into their funds available to spend. 

Mr. HORN. That’s interesting. What we tried to do in the Debt 

Collection Act was stimulate the agencies to improve their computerization that helps them collect the debt. And so in that sense, it’s 

an incentive. They get a percentage of what comes back to them. 

How much of a problem is it in debt collection when people take 

personal bankruptcy in the State of South Carolina? Does that just 

foreclose you from collecting this debt? And how much of a problem 

is that? 

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Mr. FRAMPTON. It’s always a significant problem in dealing with 

automated systems and people that fall into a bankruptcy-type position. 

Of course, that prohibits us in post-petition-type bankruptcy 

debts, but we’ve become heavily involved in making sure that the 

folks stay current, stay on the rolls with us, and don’t fall off the 

rolls while they’re in the bankruptcy process, particularly if they’re 

reorganizing. 

Mr. HORN. Well, that’s why I’m thinking if there’s a pattern and 

practice of taking personal bankruptcy and then popping up somewhere else with a new business, new name, I don’t know if you go 

by taxpayer numbers, but maybe a new taxpayer number, is there 

a way the State can get at that so—or does the judicial proceedings 

just excuse them from any collection of those debts they did under 

that other name? 

Mr. FRAMPTON. The judicial process really excludes you from 

going after a lot of those debts. But it’s not a significant problem 

for us. We haven’t seen a major change in that process. 

Mr. HORN. You mean even with the leniency of bankruptcy that 

we have now? 

Mr. FRAMPTON. It hasn’t come up as a significant change or problem for us. 

Mr. HORN. What percent of your debt is based on personal bankruptcy? 

Mr. FRAMPTON. I don’t have that number. 

Mr. HORN. OK. Well, if you could get it, let’s just put it in the 

record at this point. 

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Mr. HORN. What got me started in all this is the Internal Revenue Service having over $100 billion in uncollected debt, and 

which I regard as a national scandal, as you all know I regard it. 

And a lot of that is obviously based on bankruptcy of small businesses, individuals, so forth and so on. 

But that’s half the budget of Lyndon Johnson when he was conducting the Vietnam War, so it’s not to be sneezed at. A hundred 

billion is sitting out there, and it’s mounting still, shall we say. 

My last question to you and my question to Mr. Wall is given the 

active role that Governors from South Carolina have played in the 

National Governors Association, have some of these success stories 

ever been on the panel of the National Governors Association? And 

has the South Carolina experience and the Ohio experience been 

part of that panel? I’m just curious how Governors are getting excited in the TQM approach. 

Mr. FRAMPTON. I think Mr. Wall has a good answer for what’s 

going to happen in that. 

Mr. HORN. But South Carolina hasn’t been on a panel then, I 

take it, to share the good news. 

Mr. FRAMPTON. We’ve been on various panels, but none of that 

level. 

Mr. HORN. OK. 

Mr. WALL. Yes, Governor Voinovich is going to take over the 

chair in July, and one of the things he’s promised to——

Mr. HORN. He’s got to bring this with him. 

Mr. WALL. Well, he’ll bring the newest version with him, which 

should be twice as big again, I hope. But he’s promised that that’s 

going to be one of his major initiatives. And we’re already working 

with the NG on how we’re going to do that. 

We hosted the National All States Conference on Quality where 

he spoke to the quality coordinators of all the other States, and 

they gave him a standing ovation when he said that he was going 

to try to do that. He got kind of excited about that. I’m not sure 

what kind of events and presentations are planned, but I know I’m 

going to be real busy at that kind of thing. It’s going to happen. 

Mr. HORN. Well, that’s great, because I think the States are in 

the lead here. Justice Brandeis was right when he talked about the 

States as learning laboratories in our representative system. 

Let me just take a look at a couple of things here in terms of 

your testimony and clarify those, then we’ll get to more general 

questions. 

I take it in Ohio you mentioned the degree of union cooperation, 

and you’re heavily organized with employee unions——

Mr. WALL. Right. 

Mr. HORN [continuing]. I assume, just as the California and the 

Federal Government is. What’s the best way to get union cooperation, in your judgment, after looking at all of these different situations? Does something come to you on that? 

Mr. WALL. Well, sir, we started out thinking that we were going 

to get everything planned out and then present it to them, and that 

wasn’t the best way to do it. Learning and working together, I 

think, is the best way to do it. They’re very sensitive to us having 

a virtual partnership versus a real partnership. And we went right 

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off the bat, made sure that they had equal representation to our 

process improvement teams. 

One of the unions’ chief concerns is that we’re going to go out 

and make things simpler, faster, better, less costly, take less people, they’re going to lose membership. We put a contract provision 

right in all the contracts which said that you can’t think yourself 

out of a job. If you’re on a process improvement team, and it used 

to take eight people 15 days to do, and now it takes five people 3 

days to do, we’re not going to get rid of everybody else. You’re not 

going to have the same job, but you probably wouldn’t anyway. We 

guarantee you a job, same kind of a thing. And our commitment 

is to retrain, move people around, deploy them where they’re needed. So dealing with some of those kind of fears, I think, is the most 

important thing that we did. 

Mr. HORN. I notice on page 6 of your testimony, you noted that 

85 percent of the work force was taking basic training, up from 66 

percent a year ago. And I remember you mentioned 3-day sessions, 

I believe? 

Mr. WALL. Correct. 

Mr. HORN. So I’m curious, how long is the typical session? Is it 

3 days for the average State employee in Ohio? 

Mr. WALL. Or longer, 3 to 31⁄2. Some even go out to 4 days, depending on how they make it specific for their agency. But it is the 

full 3 days, and the Governor and Lieutenant Governor and all the 

cabinet members, all the union officials, everyone goes through 3 

days. 

Mr. HORN. Just once a year, or once——

Mr. WALL. It’s the basic training. You’re never done learning. 

You move into other kinds of just-in-time training. It’s ground 

school, basically. 

Mr. HORN. Now, does your office administer that training program, or does your personnel group in this——

Mr. WALL. Our office administers it, but we’ve developed a cadre 

of trainers within the agency, so they develop their own training 

plans. We have one centralized training so we all have the same 

jargon, same examples, so that we can all work together. And our 

trainers are made up of both union and management people. And 

we do a lot of cross-training, but we don’t do that much of the 

training. We build capacity for the agencies to do it. 

Mr. HORN. What is the typical curriculum for the basic 3-day——

Mr. WALL. There’s three things. One of them is how to work on 

a team and use interpersonal communication skills to get along 

with each other. That sounds so simple, but that’s one of the biggest things teams say is that they’ve never learned to work—in 

school, teamwork was called cheating—and so they’re not all that 

good at that kind of a thing. 

No. 2, we spent a lot of time on the actual problem-solving process, not skipping steps, starting out identify what you’re currently 

doing, what do the customers want, what are the causes of the 

problems, collecting the data. 

And the last thing is that giving them some skills and using 

some of the basic tools, how to use a flowchart, histogram, parameter. And then when they end, they go through a ready-set-go modVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00184 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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ule where they define a process improvement project that has a 

good likelihood of success. 

Mr. HORN. I notice on the later page on TEAMS chart 1 that you 

moved from the number of team essentially in 1992 to 1993, you 

had 25, and now you have 1,558. I guess I’m curious in terms of 

teams, does a self-selection occur in the sense of a really eager 

State employee who volunteers? Do you put that kind of person to 

work? And how does that person get the message up the hierarchy 

when they’re down there maybe at the entry level and have a million good ideas after a month——

Mr. WALL. Right. 

Mr. HORN [continuing]. Six months or a year? How do you bring 

that person into the network and take account of that energy and 

talent and commitment? 

Mr. WALL. And I’m not sure we do it as well as we should. But 

the way the process works is the people on the teams aren’t just 

the nice people, aren’t the people we like, aren’t the most 

interjective people. The people are who does the work and who represents the whole system. 

So the first thing you do is you figure out what the process is 

that you want to improve, and then you kind of look around and 

say, how do we make sure that the whole system is represented; 

and then you look around and you say, and who should we have 

on it? And we’re careful to make sure that we have union representation on it and want to make sure that there’s equal numbers of 

different kinds of people on it. But the key thing is who does the 

work. There’s two ways that teams get formed. 

Mr. HORN. Well, are you saying management, except for the 

union, you’re getting in at the beginning is what I’m hearing. 

Mr. WALL. Sometimes it’s an all-union team. 

Mr. HORN. Yes. 

Mr. WALL. It would be possible to be an all-management team, 

depending on what the process was. But there’s really two ways 

that form the teams. 

Mr. HORN. Are there people right down there on the—let’s say, 

with the plant analogy, the people that are on the floor that know 

what people really do and don’t do, do they know who’s conning the 

boss and——

Mr. WALL. They would be—85 percent of the teams that are representing here are the frontline people. 

Mr. HORN. Right. 

Mr. WALL. Yes. 

Mr. HORN. So how do you get those frontline people on? Does 

management pick those in the initial stage? 

Mr. WALL. It works two ways. Sometimes the steering committee, which, remember, is part labor, part management, charters 

these teams and prioritizes them depending on what they want to 

do, and even sometimes have a role in selecting who the people are. 

As we evolve and get smarter and trust each other more, they just 

bubble up from the surface. Someone says I was on a team last 

year that did this, and here’s another problem. We want to form 

a team to figure it out. It’s just a way of doing business rather than 

a special event. 

182

Mr. HORN. How much help do you get from the union on picking 

people, then? Do you get quite a bit of help? 

Mr. WALL. Yes. And sometimes we put help in parentheses, too, 

because sometimes we get involved in who has power and control 

versus how to serve our customers better. That’s one of the chief 

things we are learning to overcome and is sometimes we have 

what’s called fair share people that are people who benefit from the 

union’s services but have not elected to pay the union dues completely, and that causes some problems. 

Mr. HORN. That is the agency shop individual. 

Mr. WALL. Right. Right. So we try to work together on that. But 

it’s not an exclusionary process in any way. It’s the people who do 

the work. 

Mr. HORN. In other words, the union steward who is on the team 

from the beginning in relation to a particular process doesn’t have 

a veto power of who goes——

Mr. WALL. Doesn’t have a veto power. But here’s what would 

happen. If I had a history of all the teams that I put together only 

having certain kinds of folks on it, the union would go to the steering committee and say, here is a pattern that we really don’t like. 

We need to do something about it. And then it would change. There 

is veto power for the steering committees, though, by the way. 

Mr. HORN. I see. On the 25 attempts that you had in 1992, 1993, 

they are essentially nonexistent now. They solved the problem. 

They were appointed to do something about crawl. 

Mr. WALL. Correct. 

Mr. HORN. They could be on other teams, but not that team. 

Mr. WALL. Hopefully they’re on other teams. Hopefully they’re 

still monitoring the process and maybe improving it in another 

area with another team. 

Mr. HORN. OK. Were there suggestion boxes in State agencies 

prior to this team effort? 

Mr. WALL. Yeah, there were suggestion boxes, but frankly, we 

looked at the suggestion box as kind of a way of controlling suggestions versus encouraging them. And suggestion boxes also encourage people to jump to solutions where the improvement process 

asks you to first take a look at the process, define what the customers want, define what you’re trying to do, look for the causes, 

and then fix what needs to be fixed; not the first thing you come 

up with. 

So we have suggestion boxes. We also have an improvement process where we pay people for the amount they saved, and then we 

have the process improvement project, and they all kind of work 

together. 

Mr. HORN. How does an idea get into the system now? Do they 

write you a letter? Where can it be cutoff, I guess is what I’m interested in. 

Mr. WALL. Oh, yes. Well, the most common place for it to get cutoff would be the frontline supervisor who just doesn’t want anything to do with it. And that’s incredibly frustrating to an employee 

who’s got a great idea and new tools and knowledge they want to 

do with. That’s one of the advantages of having our unions there 

is they serve as the conscience for us sometimes and almost an appeals process, and if something can’t get done—but it goes to the 

183

statewide steering committee. I get involved rarely. But the agencies pretty much take care of that stuff themselves. 

The other way that it gets cutoff, I guess I would say, would be 

the steering committee can do only so many things, so they have 

a process for prioritizing what they’re going to do and what they’re 

not going to do. So hopefully a lot of the things aren’t cutoff, they’re 

just put into the appropriate holding pattern sometimes. 

Mr. HORN. Well, does the plane eventually land? 

Mr. WALL. I hope so. And they’re landing faster and faster all the 

time. 

One of the things that I’m proud of, and you look at the statistics, is that over half of the teams that have ever been formed were 

formed in the last year. We’re really making progress on getting 

that rolled out. And the goal wasn’t how many teams we could do, 

but how to do it with it well. And to begin with, you just start off 

slowly with limited resources. 

Mr. HORN. And what’s the turnover on a process improvement 

team or just leaving in frustration factor, whatever you want to call 

it? 

Mr. WALL. I wouldn’t have specific suggestions to that. I do know 

that chartering of the teams takes away a lot of that turnover; that 

having a good facilitator takes away a lot of the turnover. I’m only 

aware personally of 3 formal teams where the people just disbanded out of frustration, out of 1,600. Now there may be more, 

but I’m only aware of that. 

Mr. HORN. Is there a time set for a team to finish its task? 

Mr. WALL. Usually there’s a charter developed with a general 

outline of how long it’s going to take, but that’s negotiable depending on when they start draining the swamp, what do they uncover. 

It might take a little more time. 

Mr. HORN. I found, in doing the reform business, we usually underestimate how long it’s going to take. 

Mr. WALL. And we underestimate how complicated the project we 

started on was, too. 

Mr. HORN. One of the examples I’ve got to read on your last 

page, it just was unbelievable to me. And I wondered even under 

the old system, this should have been collected, you said teams are 

doing right by their customers. And at the—and tell me how to pronounce it—Massillon Psychiatric Center. M-A-S-S-I-L-L-O-N. 

Mr. WALL. That’s pretty close. 

Mr. HORN. OK. A team looked into the process for getting new 

clothes to patients. When the team started, 55 days passed from 

when a clothing order was placed and the patient received new 

clothes to wear. Now it all happens in the same day. What did they 

do with the poor soul that’s wearing the same clothes for 55 days? 

Mr. WALL. It’s really scary when you start uncovering these 

kinds of things. And, in fact, what you almost want to do is you 

almost want to try to blame people for bad things that happen, and 

that’s one of the things you can’t do. 

We had another process that got rid of carbon paper, if you can 

imagine that. And my first reaction is why do we have that in the 

first place rather than good process improvement? I’m glad we’re 

moving forward. 

184

Mr. HORN. So you looked in the warehouses of Ohio that several 

tons of carbon paper were still being ordered. 

Mr. WALL. Three different colors. 

Mr. HORN. Three different colors. Great. Great. 

Mr. WALL. Not anymore. 

Mr. HORN. This is like when we took over for the first time in 

40 years, we found a warehouse of agricultural yearbooks that had 

never been distributed. Plus the ice. I mean, you have all heard 

about that. We don’t have ice delivered automatically every morning when a lot of us didn’t know what to do with it and wondered 

why the ice bucket showed up. Sort of like the iceman cometh, to 

say the least. 

You mentioned, Mr. Wall, a focus on the champions, those who 

embrace change and quality. 

Mr. WALL. Right. 

Mr. HORN. How can you shepherd along those organizations or 

teams so the disease spreads? 

Mr. WALL. Well, I think that’s probably one of the most important parts of our strategic plan is that we elected to really focus 

on the champions and figure out every way we can. I think this results book is a prime example of that. This goes to the press. This 

goes to the legislature. This goes to other States. We give it everywhere we possibly can. And people, the first thing they do is they 

look for their team. 

Mr. HORN. Sure. 

Mr. WALL. They look for how many they’ve got on their team. 

They brag about the whole thing, our Team Up Ohio events, our 

team competitions, our work with the private sectors. What we’re 

really trying to do is find the people who want to make this work 

and then encourage them and reward them. 

I just got a call from another State about someone from our State 

who was interested in applying. And they said what made them 

stand out head and shoulders was that they talked about their 

QStP efforts and how they had gotten everybody involved in it. And 

that to me is where we’re really going to make some progress is 

where people are hired because of not their crisis management 

skills, but their ability to develop people. 

Mr. HORN. Let me ask you both some of these questions. What’s 

the best way to get down to the nitty-gritty as top leadership has 

to run around and do other things and isn’t always there? How do 

you structure the agency when the Secretary of the Cabinet Department, or whatever, I don’t know what you call them in Ohio, 

is off somewhere else? He can’t be around. Now, there’s often a 

deputy secretary that’s supposed to worry about the nitty-gritty of 

the nut and bolts. Where do you see these teams reporting? Are 

they at a much lower level, or do they report directly to the chief 

executive of the agency? 

Mr. WALL. I think that frequently the teams ought to report 

right to their direct supervisor, who, instead of being a traditional 

manager, becomes a leader, and their job is to make them successful. A lot of the teams, it just gets reported one step up. 

Frequently teams also report to the steering committee just to 

educate people to know what’s going on, which is kind of a crosssection of folks. But regarding your question about where it has to 

185

go, we’ve got something we call—a lot of people do—they call the 

‘‘Be’’ team. You know, they were there when you came, and they’ll 

be there after you left. And the political people will come and go. 

It’s those career civil servants that have to be the champions and 

that we have to keep involved in it and that are usually considered 

the guidance teams or the sponsors. And if something just isn’t 

going well, that’s where you need the champions, and that’s where 

you need to build it into your legacy almost, so that when you’re 

gone, it will continue. 

Mr. HORN. Mr. Frampton. 

Mr. FRAMPTON. One of the ways that we dealt with that was that 

we assign a member of our senior management team to act as a 

liaison to each team, serve several functions. The senior member 

of the management team can clear a lot of brush out of the way 

if the team is having trouble. He can keep them on track, and it 

also keeps that connection into our senior management team. We 

like our teams to report up to the top-level management. 

Mr. HORN. Would the supervisor involved with the process that 

that team is reviewing and thinks they could do it a different way, 

would he be or she be in the meetings? And would that senior management liaison sit in on any of the meetings; does she sort of wander around and drop by sometimes when the team is meeting? How 

do they get the communication, what I’m after, from presence or 

from memos? 

Mr. FRAMPTON. The manager of the process is always involved in 

the team. The person responsible for the process is involved. The 

senior management team member assigned to that would serve on 

an as-needed basis. They would come to meetings and spot—attend 

meetings, or if they were requested or needed by the team, they 

would be brought in. 

Mr. HORN. We heard this morning on the Cadillac experience, 

the special office was created reporting directly to the chairman 

CEO. Have you created in some of these cabinet departments special offices in South Carolina and in Ohio? 

Mr. WALL. Yes, I guess I would be considered a special office, reporting directly to the Governor and serving on the cabinet, and 

then each agency has their own quality coordinator. The vast majority of them report directly to the director. And I think you can 

just see which agencies are progressing the most versus what kind 

of champion that person is. It makes a huge difference. 

Mr. HORN. What does the actual point in the hierarchy of the 

management connection—have you seen that make a difference in 

Ohio? Or was it strictly the personal skills of the individual who 

was committed to this rather than the hierarchial location? 

Mr. WALL. Well, I believe the skill is always critical, but it sends 

a huge message to people that this is important when they are in 

the hierarchy at the level where they’re—correct. We sort of learn 

from Xerox that you have to have a vice president in charge of 

quality, so to speak, to really make people sit up and take notice. 

Mr. HORN. So who are typically the people in your various State 

agencies that would get this assignment to quality control that 

would report to the Secretary of the Department? 

Mr. WALL. Now they are actually called the agency quality directors. They would be people who would serve on the senior manageVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00189 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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ment team, people who would be at at least bureau chief level, 

probably the division chief level. They would be the folks who sit 

in and have the direct ear of the director. 

Mr. HORN. But they are in the direct hierarchy prior to being 

picked for this assignment. Do you think this is an overload assignment or what? 

Mr. WALL. In many times, it was a brand new position that got 

created and people went outside looking for quality experts, frequently from the private sector, to come in and fill that new role. 

Mr. HORN. What series of characteristics do you think is needed 

to have a potentially effective quality coordinator? What type of 

past experience do they need? 

Mr. WALL. I think that the skills themselves are relatively easy 

to learn. However, it is important to have some experience working 

with change, primarily. Anyone can learn, I think, how to use the 

charts and graphs, and you can get other people to be facilitators. 

But to understand how long organizational takes and to have the 

perseverance and persistence to overcome some of the natural frustrations that are going to take place, I think that is really critical, 

someone who has tried to shepherd something controversial 

through the ranks, that is the main skill. 

Mr. HORN. Mr. Frampton, do you want to add anything to that? 

Mr. FRAMPTON. I would, Mr. Chairman. One of the two main 

traits an individual has to have is basic professional knowledge of 

the skill and process and how to utilize the tools; they have to 

know how to bring that to the table. Social skills need to be very, 

very good, and I think those are a risk, if you rely on the power 

of the position, rather than the social skills, it is just terribly important. They need to have an appreciation for the problems that 

senior management has to deal with in an organization, and sometimes it is a bit easy to say, well, why aren’t these folks doing this 

right now, without a real appreciation for some of the problems 

they may have to prevent them from bringing the process forward, 

like bad information systems or other things that could actually be 

tremendous barriers to an agency. So they need an appreciation for 

what top-level management has to deal with. 

Mr. HORN. One underlying assumption of total quality management is the usefulness of teams, yet teams are not appropriate for 

every problem and every process. How have you handled that? 

Have you always used teams, or have you gone down to the individual taking a look at this thing, making a report and changing 

it? 

Mr. WALL. You are absolutely right, you don’t need teams for everything. Individuals can use the tools very effectively as well, and 

we have example after example of where a person took a look at 

what they were doing and figured out how to do customer expectations and a checklist and figure out how to do things better. 

I think a team is used when you have a very complex issue or 

an issue that covers a bigger part of the system. But I would guess 

that most times you don’t find a project that runs through one person, and if you only have an individual do it, they tend to rob Peter 

to pay Paul rather than fix the whole system. 

187

Mr. FRAMPTON. What we try to emphasize is, the natural team 

is where we want to see most of the progress go on in evaluating 

the systems and using the tools. 

One issue of surface that crossed jurisdictional boundaries into 

another organization or three or four across the entire organization, that is when it is brought to the management team, the charter group to deal with that and, during that chartering process, to 

evaluate or set the team up for success, sometimes it becomes very 

clear that it just needs to be done, and it is through that evaluation. 

Mr. HORN. Is there anything, looking at the reverse, that you 

should be aware of to not appoint a team? What conditions have 

you ever had in that situation where you thought, the less we get 

into this one, the better off we are? 

Mr. WALL. For us, that includes collective bargaining issues, that 

is one of the things we decided right off the bat. Hours of pay, 

wages, those kinds of things aren’t going to be included in our process improvement projects. And sometimes we have taken a look at 

projects and said what, that is way, way too big; let’s drop them 

down into bite-size kind of margins. But I don’t think we have ever 

found anything that didn’t lend itself to this kind of process. We 

stay away from morale, communication, and world hunger, things 

that are just—you know, you just can’t deal with. 

Mr. HORN. Is world hunger above or below communications in 

your priority list in Ohio? 

Mr. WALL. They are policies that——

Mr. HORN. Well, the world hunger threw me for a minute, sorry. 

Has the size of the organization affected the implementation of 

quality management? Are there some things you just have to either 

divide it into a lot of pieces to get at it, or can someone get a global 

team for a total large agency? 

Mr. WALL. I guess it would depend on how much time and resources and commitment you wanted to put into it. I have seen examples; South Carolina has good ones; people have dropped everything and trained people for 3 weeks and really done a bang up job 

of things like your Motor Vehicle Bureau. If you are willing to put 

that kind of resources in, you can do it. Frequently we don’t have 

time to do those kinds of things to divide things up. 

Mr. HORN. Have either one of you had a chance to look at how 

much the average time is between the formation of a team to look 

at a process and when the results are in from the team, and when 

they are finally implemented, and to what degree have they not 

been implemented, even though the team might agree that this is 

the solution that management might have had another view and 

can you give us a sort of feel? Is it a 5-month gap, or 6-month gap, 

or 1-year gap, or 24-hour gap? 

Mr. WALL. We actually have studied some of that stuff, and for 

a brand new team that has never done it before and has to learn, 

it’s about 8 or 9 months. 

Mr. HORN. For the team to do its work. 

Mr. WALL. But that includes a do phase, where they have studied it to some degree, tried it to a small scale, and have the data 

to show whether it is better or worse than what we used to be 

doing. 

188

As teams get more and more skilled, it goes down, and a number 

of things are done in 3 months routinely. So if I had to give you 

a number, I would say 6 months. 

In terms of what gets implemented, it is kind of hard to answer 

that, because we tell them not to form a team if you are not going 

to implement something. But sometimes they have 37 different 

suggestions, and 29 of them were implemented. Did they get implemented or not? It is kind of a tough thing to call. 

Mr. HORN. Do you want to add anything, Mr. Frampton? 

Mr. FRAMPTON. I do. One of the things that we ran into early on 

is, the team would make recommendations, but senior management 

wouldn’t write and implement those recommendations, and that became quite a sore spot for us, organizationally. So that was part 

of the reasoning for the liaison function we had with senior management participating with the teams. 

Our expectation is, when the team brings a recommendation to 

senior management, it is ready for implementation, consensus has 

been built, that senior management is part of the team in the system to this and it is necessary to implement these issues. 

So we work toward everything being implemented and working 

that out in the process. It is not a, ‘‘Here, you all, let’s see what 

you do.’’

Mr. HORN. Let me ask you one last question. People talk about 

stakeholders. Let me name you five possible groups, and tell me if 

there are more. Taxpayers generally; the employees; the actual customers of the agency, who could be taxpayers or particular clientele 

among the citizens; unions; and perhaps the media. 

Am I missing something there, as a stakeholder, that you look 

to? And if these are the five groups that have the broader constituency, the media through its communication skills, to what taxpayers, employers, employees, customers, unions, how do you 

prioritize your efforts, and how do you get them involved with your 

teams? Are most of these teams strictly employee teams, which include unions, or do we ever reach out and try to get some customer 

off the street or taxpayer? 

They are all taxpayers, I realize, within the agency, but do we 

ever get other people from the broader world of Ohio and the 

broader world of South Carolina to sit in and provide a grass roots, 

what I would call a farmer that came to the legislature and they 

were held spellbound as he told them what was really happening 

out there? 

Mr. FRAMPTON. We think that the definition really could be expanded somewhat to include, in our case, we see the Federal Government, or the IRS, as a stakeholder, as well as county and city 

government, and we do frequently involve outside folks in our 

teams. A good example was the trucking community, on an evaluation of our taxation system of the trucking industry, and they were 

involved with us in a 12-months analysis, with strong legislative 

recommendations to improve that process, which gave them a real 

appreciation of what we have to deal with, as well as us, about our 

appreciation of what the issues were. 

But we frequently have those folks involved with us to evaluate 

whether it is the county association, municipal association, all 

189

those people who have some say, and whether or not we can effectively simplify a system. We bring them to the table, gladly. 

Mr. HORN. Mr. Wall. 

Mr. WALL. The only other stakeholders are executive or legislative branches of Government are considered to be stakeholders, depending on what we are doing, and bringing the customers to the 

table is important. 

Frequently we do have people who are just parents, for instance, 

being on a team dealing with how we are going to deal with children and those kinds of things. But probably more frequently is 

when we invite our customers in for portions of the team meeting. 

Rather than being there every Tuesday for 6 months, they come in 

when we are really looking at customer requirements or we have 

an idea and want to bounce it off people to see if we are on the 

right track or not. 

Mr. HORN. In the Federal Government, we have a law that relates to the degree to which one can close a meeting on advisory 

councils, advisory boards, that many agencies and programs have. 

Do South Carolina and Ohio have a comparable law, and do these 

teams fall under it, where maybe an advisory board would fall 

under it? But to what extent has that been a problem? 

I am assuming the teams sort of work without any posted agenda, and a lot of people could say, gee, I want to see what you are 

doing, and so forth. 

So has that been a problem? 

Mr. WALL. Actually, the teams are probably the most structured 

meetings I have been to. It doesn’t follow Robert’s Rule of Order, 

but it does follow very effective rules. They have ground rules right 

off the bat on what gets posted and where it goes. It hasn’t been 

a problem. The teams themselves determine when they are going 

to be done and how they are going to move forward. 

Mr. HORN. Any problems in South Carolina? 

Mr. FRAMPTON. No problems in South Carolina. 

Mr. HORN. I thank both you gentlemen. It has been helpful. You 

have lived on the firing line with doing an effective, impressive job. 

If you have a few of these more to spare, Mr. Wall. 

Mr. WALL. I gave her about 36 of them. 

Mr. HORN. OK. Thank you. We are going to spread that around 

in a few places in this town. 

Mr. WALL. Let me know if you need any more. 

Mr. HORN. We want the new edition when it comes out. How 

many of these did you print? 

Mr. WALL. It is interesting, because we printed about 5,000, I 

think. What we do is, our general service agency has the orders 

there, and we let the agencies buy them themselves rather than 

come out of one particular budget, and I know some agencies want 

everyone to have one, so I am not sure how many have been printed. 

Mr. HORN. That is a good idea. It spreads the disease. This is a 

good disease. Thanks so much for coming. 

We now have panel four, and that will be Mr. Thomas Carroll, 

National Director for Quality, IRS; David Cooke, Director of Administration and Management, Department of Defense, who is accompanied by Anne O’Connor, Director of Quality Management; 

190

Dr. Gerald Kauvar, U.S. Air Force; General James Boddie, Jr., U.S. 

Army, Captain Scott T. Cantfil, U.S. Navy; Lieutenant Colonel Tom 

Sawner, Air National Guard. 

If all those witnesses would come forward, we would appreciate 

it. And as I think a lot of you know, we have a tradition here of 

swearing in the witnesses, so if you would rise and raise your right 

hands. 

[Witnesses sworn.] 

Mr. HORN. Right down the line, I take it everybody is affirming. 

We will start, Mr. Carroll, with you, as National Director for 

Quality, Internal Revenue Service. Thank you for coming. 

STATEMENTS OF THOMAS CARROLL, NATIONAL DIRECTOR 

FOR QUALITY, INTERNAL REVENUE SERVICE; DAVID COOKE, 

DIRECTOR OF ADMINISTRATION AND MANAGEMENT, DEPARTMENT OF DEFENSE, ACCOMPANIED BY ANNE O’CONNOR, DIRECTOR, QUALITY MANAGEMENT; GERALD KAUVAR, 

U.S. AIR FORCE; BRIGADIER GENERAL JAMES BODDIE, JR., 

U.S. ARMY; CAPTAIN SCOTT T. CANTFIL, U.S. NAVY; AND 

LIEUTENANT COLONEL TOM SAWNER, AIR NATIONAL 

GUARD 

Mr. CARROLL. Thank you, Mr. Chairman. 

Mr. HORN. We can’t even give you a decent seat there. You are 

next to distinguished company, but you are almost out the door. 

Mr. CARROLL. It won’t be long. 

Mr. HORN. One of these days, if Congress ever has a total quality 

leadership or management team, it is redoing the hearing room 

and the idiocy with which this room was designed. But I am not 

the chairman, so be it. 

Mr. CARROLL. Thank you, Mr. Chairman. I am pleased to be here 

today to testify on IRS’s total quality management approach to the 

way we deliver products and services to taxpayers. 

I would like to summarize my statement in light of the number 

of witnesses that you have, and so just for the sake of history, to 

let you know we have been involved in the business improvement 

process since 1985, when we recognized that in order to have sustainable improvements, we needed to have a structured approach 

to those improvements. And we found, for us, the structure in the 

teachings of Dr. Juran. After working with him for sometime, we 

trained about 100,000 employees from the front lines to executives 

in continuous improvement techniques. 

One of the issues around that training, just for your information, 

was at that time, in 1985, we did not understand that the taxpayers were our customers, and it was a cultural shock for us, I 

think, to go through a learning experience about who our customers were and what were our obligations to them, and it was in 

that regard that the training was very successful. I believe everybody now recognizes the taxpayer is our customer. How well we are 

servicing them is another question, but at least we have gotten 

over that hurdle. 

In 1992, we created a plan for improving customer satisfaction 

and organizational performance, which is the basis for our TQM effort today, and it is focused on a system of partnership councils in 

each of our offices, one a national partnership council, and regional 

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and district and local councils. Those councils are comprised both 

of IRS executives and the National Treasury Employees Union 

[NTEU], representatives and officials. 

On our journey so far, we have learned some—several—lessons 

that I would like to share with you. One is that in order for this 

to succeed, you have to encourage an environment, a great environment where improvement can take place and ensure that the organization has the tools or the infrastructure and the capacity to, in 

fact, practice quality improvement on a regular basis. 

The second lesson we learned was that the management needed 

to have accountability, through establishing appropriate outcome 

measures, along with recognition programs, and just as the last 

panel showed you some books on how they publicize good things 

that are going on, that kind of activity is critical to sustain these 

kinds of efforts. 

I just want to talk about a couple of our efforts here. There are 

many in the testimony, but a couple of them, I believe, are particularly significant. One is our TeleFile program where we now have 

26 million taxpayers able to file Form 1040 EZ over the telephone. 

This year, 5 million of the 26 million in fact did that, resulting in 

greater satisfaction on their part and significant savings and accuracy in taxpayer hours. In takes about 10 minutes for a taxpayer 

to file their return that way. 

The other significant thing that I believe we have done through 

this effort is create our Internet Web site. We used a process of actually going out and benchmarking against other organizations to 

see what a good Web site would look like. 

As it turns out, folks are now coming to us to benchmark against 

us, and our Web site, because of the way it gets recognized, we 

have received over 40 industry awards. Last year, we had 117 million hits on our Web site, 4 million of which occurred April 15th. 

Taxpayers can get tax returns delivered to their home or their office directly through the Internet and answers to frequently asked 

questions. 

Another one of the programs that I just wanted to share with 

you because of its crosscutting nature is, we have been concerned 

for some time with our inability to answer the telephone as frequently as taxpayers would like us to, and as we, in fact, we would 

like to answer it. And in looking at the problem, what we really 

found is, to some extent we were creating part of that problem ourselves by the notices we were sending to taxpayers inviting them 

to call us. 

And looking through an entirely different process at the notice 

process, and revisiting the actual value that we were getting out 

of them, we were able to eliminate 21 million notices to individual 

taxpayers, with the potential for eliminating another 23 million. A 

fair number of those notices would have resulted in calls and other 

demands for services. 

The third lesson we learned was that you have to have alignment 

around a common management value. We are currently opening dialog within the Service, talking about using the Baldrige criteria, 

which you have heard quite a bit about today, as a tool to help us 

assess our becoming a TQM organization. 

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In the past, we spent quite a bit of time focusing on our business 

results. We spent less time focusing on those other aspects of the 

Baldrige Award—leadership, strategic planning, customer focus, information analysis, human resource development, and systems 

management. We believed these would be a much more powerful 

tool for us to be focusing on. 

And the fourth lesson that we learned, and as simple as it 

sounds, is you can’t delegate process ownership to somebody else 

and systems improvement to somebody else. If you are responsible 

for the system, you in fact have to be the one that is accountable 

for it and you are the one that has to be the leader who can lead 

the effort. 

In conclusion, I would just like to say that we have had a fair 

number of false starts, and just as private sector companies have, 

we viewed these false starts as opportunities. We still have a lot 

of work to do before the quality principles are practiced by all of 

our employees and all of our offices on a daily basis. However, we 

do believe we are on the road to that goal, and we appreciate the 

opportunity to be here with you today. 

Thank you. 

[The prepared statement of Mr. Carroll follows:]

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Mr. HORN. Well, I thank you very much, Mr. Carroll, and I am 

going to question you now on IRS. There are only a few questions 

I have here. You did a very fine paper, and I enjoyed reading it 

last night. 

If we might, I would like you to stick around though, because 

some of the discussion on defense, I might want your perspective 

as a Federal agency on that. Let’s start with one. 

You mentioned the need for an open environment to implement 

quality programs. How have you created an open environment in 

IRS? And I don’t say that cynically, but you have, as I mentioned 

earlier, a law on confidentiality, privacy of taxpayer returns, and 

so forth, and various advisory committee laws of the Federal Government. So I am just curious, what did you do to create the open 

environment? 

Mr. CARROLL. I don’t believe it is open enough, and I think we 

need your help. The question you asked of the last group about 

their views of stakeholders and outsiders. Internal Revenue has operated in a rather insular way in looking at its processes specifically because of the concern about disclosure and other things. 

However, I feel very strongly, and I believe the organization does 

as well, that many of our solutions exist outside the walls of Internal Revenue, not inside our walls, and that is only if we can reach 

out and participate with other parties and other folks about those 

solutions that we can readily deal with the problems and come up 

with the right solutions. So there is a fair amount of openness 

within Internal Revenue. 

But I think that you have hit on a legitimate problem and barrier we do have, that we do need more help and advice. We are 

working with many of the States, we are working with the different 

representatives of taxpayers, the ALCPA, the AARP, the environmental association, and the like. But getting them to commit to 

full-time participation on a work effort is something that we 

haven’t been successful enough at. 

Mr. HORN. OK. I note on page 1 that it says, in the case of IRS, 

you had 2 days of training for about 1,000 people. Is that correct? 

It was 2 days of quality leadership training to all 15,000 managers 

and union leaders in the organization and all employees, about 

100,000 people were fully trained? 

Mr. CARROLL. That is correct. 

Mr. HORN. So each was a 2-day training period. 

Mr. CARROLL. It was a 2-day training period for all of those folks 

around who is your customer, understanding what your customer 

values, and it was a basic introduction to what is TQM and how 

is it that we want to operate in the future. 

Mr. HORN. This was done at one time the 2 days, or was it 

spread over a long period? 

Mr. CARROLL. It was done at one time. Subsequent to that 

though, about training, we have many targeted courses for practitioners of quality activities, leadership training activities, facilitation training, et cetera, for people using the tools. 

Mr. HORN. Did the 15,000 managers and union leaders you 

trained—did they go back and do the training of 100,000, or did the 

same team that did the managers and union leaders do the training of the 100,000? 

203

Mr. CARROLL. I can’t remember. 

Mr. HORN. Could we put it in the record? 

Mr. CARROLL. Yes. 

Mr. HORN. Check with the powers that be at the time. When did 

this training occur, roughly? What year are we talking about? 

Mr. CARROLL. 1988. 

Mr. HORN. Has anything happened since 1985, any training now, 

or did they train them once and say, ‘‘We have done our job’’? 

Mr. CARROLL. The original training was sensitivity training to 

what TQO was and to what our obligations were. We have since 

conducted, at the local level, many training classes on process analysis and all the techniques in systems management and improvement. I don’t have the numbers for you as to the number of students who have attended them. 

Mr. HORN. I take it then, the IRS has been engaged for 12 years 

in total quality management? Would you say it started in 1985? 

Mr. CARROLL. We have been on that journey for 12 years. 

Mr. HORN. Did they fully utilize the trained employees of 100,000 

and put them in teams immediately, or was it something the training evaporated when nothing happened to it? 

Mr. CARROLL. I think they did not go back, all 100,000 employees, not even a small fraction of those went back and actually practiced the training, although the training wasn’t around practicing 

the quality techniques, it was sensitizing them to understanding 

who the customer was and the fact they would be learning more 

as time went on about what that meant to them. 

Mr. HORN. OK. So this was sort of a human relations training 

and attitude changing training for the total quality management. 

I mean, is that what I am hearing? 

Mr. CARROLL. Right. It was training about what total quality 

management is, not training on how to do it. 

Mr. HORN. Now the National Partnership Council, you say on 

page 3, established additional fiscal year 1997 goals to move us toward an improvement-focused organization. Now are you the repository of these recommendations for this group as well as other process-oriented total quality management groups? 

Mr. CARROLL. I am on the National Partnership Council, and I 

am the repository, I guess, of their activities. The activities that go 

on around the country, though, at the local partnership council levels are not fed back up to me or to the National Partnership Council on a routine basis. 

Mr. HORN. Now are those on a regional basis of the IRS? In other 

words, does every regional director have a National Partnership 

Council for his or her region? 

Mr. CARROLL. Every regional commissioner has a regional partnership council, and then every district director has a district partnership council. 

Mr. HORN. How many districts are there now? 

Mr. CARROLL. Thirty-three. 

Mr. HORN. And how many regional commissioners? 

Mr. CARROLL. Four. 

Mr. HORN. I knew you would reduce the size of some of those, 

but I think you are right on the organization, you can spread it out 

a little more with the responsibility. 

204

I am curious, though, in terms of those recommendations, and 

now the question I am going to ask you, I don’t ask you to answer 

it as an official of IRS, I ask you to answer it simply as a human 

being who has been around there and seen these reports come to 

you in these recommendations. 

At this point, do you as an individual, not speaking for the IRS, 

feel that IRS should undergo major structural changes? This isn’t 

related, necessarily, to total quality management, it is related to 

the tremendous size of IRS. 

You are, what, third most Government employees, with the Pentagon and Department of Defense overall would be No. 1. Forget 

the Post Office. We don’t have anything to do with them now, or 

very little. And we have HHS, I suspect, in there, but I would 

think you are about third, aren’t you? 

Mr. CARROLL. We have 102,000 employees. 

Mr. HORN. Then you lost 4,000 since last week because I have 

been having 106,000 in my mind. 

You say it is down to 100,000. 

Mr. CARROLL. 102 is my understanding. 

Mr. HORN. Having dealt with all this paper and processes and 

partnership councils, is it obvious that IRS should undergo certain 

major structural changes? 

Mr. CARROLL. As a practitioner of quality techniques, I think to 

jump to the solution, without having the data about what is driving 

you there, wouldn’t be appropriate. But I would say that it is the 

right question to ask, but I really don’t have the data to give you 

an answer to that, either as an IRS official or as a human being. 

Mr. HORN. Well, I am not asking as an IRS official. I think the 

President has made a very good selection in terms of the proposed 

potential commissioner, and he comes with a lot of executive experience, which is what, in my humble opinion, IRS has sorely needed for about 50 years. He comes with an understanding of management, and modern techniques, and computerization, and so forth. 

So I will let you off the hook on that, but I would think you 

ought to have some view, based on all the things you see from 

quality management improvements, it ought to either be obvious 

that the IRS should split its services and look at different aspects 

and maybe even have a different relationship to Treasury, or 

maybe just have a different relationship within itself. 

I will give you an analogy of another agency, almost with the 

same initials, INS, Immigration and Naturalization Service, that 

has been argued for years that maybe they ought to separate their 

enforcement responsibility from their service responsibility. That is 

what I am thinking of. 

Are there missions within IRS that really lead to great confusion 

and great time to—because of that confusion—versus a cleaner way 

to set up the agency to do its prime mission, which is collect the 

money from taxation? 

Now here, as you know, there are numerous ideas you can have, 

a consumption tax, and they think they can exist without IRS. I 

don’t see how that is possible. You still have to check, is the gross 

you are turning in the right percent in the consumption tax, and 

you have all the wonderful ideas from the Democratic leader at 11 

percent, the Republican leader at 17 percent, of the across-theVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00208 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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board bit that Mr. Forbes made so famous, and presumably that 

will limit what IRS is doing. 

Again, how do you know they paid the 17 percent? To me, it is 

off the wall to think you are not going to need IRS when you 

change the tax laws. Granted, it won’t be as complicated. That will 

be the day, I will be on Medicare plus by that time, and we will 

have some sort of cleaner way to do our job. And I just wondered 

if anything comes to mind, since you have seen all these ideas on 

how we can improve this process and that process? 

Mr. CARROLL. Nothing particular comes to mind. 

Mr. HORN. Nothing comes to mind, OK. 

Now you say at the bottom of 3, ‘‘To support the commitment to 

using systems management, we have tools in place (e.g., training 

and improvement methodologies) to ensure IRS employees have the 

capability to apply total quality management principles.’’

Well, let me ask you, the commitment to using systems manage- ment, was that commitment focused prior to the $4 billion spent 

on computing that is going nowhere? And it seems to me that the 

first thing you would do in any human organization is figure out 

the systems and the logic of the systems before you start computerizing, so you know what it is you are computerizing. 

So I was excited when I saw that you have all that support for 

using systems management and would assume that some of the 

systems were untangled, so that we didn’t have to spend $4 billion, 

or was there no relationship between all the systems management 

and the expenditure of $4 billion on computer investment that is 

going nowhere? If the papers are correct, and if it is in print, well, 

then, it must be true. 

Mr. CARROLL. My intention in the testimony was to talk about 

what we had today as opposed to what we had some time ago, and 

I do believe today that the—although Arthur Gross, our CIO, could 

better address the issue, I do believe the way we are attacking the 

modernization activity today is, in fact, around a TQO systems 

management environment where, in fact, we have a high level of 

success. 

Mr. HORN. I notice on page 6 that you say, with notices reengineering team, ‘‘Notices are computer generated to taxpayers 

about a variety of outstanding issues (e.g.,) miscalculation, missing 

signatures, missing schedules.’’

As I read your reaction, I thought that was terrific. Did any of 

that notices reengineering team get into debt collection, by letters, 

and what the timing is on that? 

Mr. CARROLL. Yes, they did. I don’t have the information. 

Mr. HORN. Could you furnish that report for the record? That 

will be included at this point, without objection. 

Mr. CARROLL. Certainly. 

Mr. HORN. And, let’s see here. That is really it. Just a few little 

things I wanted to clarify in that. 

Now we are delighted to have Mr. Cooke here, the long time Director of Administration and Management, Department of Defense, 

and those that accompany him. 

We will have questions for all of you. And, Mr. Cooke, please proceed. 

Mr. COOKE. Thank you, Mr. Chairman. 

206

I would like to introduce the Defense members who have joined 

me today. Anne O’Connor is Director of Quality Management for 

the Department and reports to me. Dr. Kauvar is Deputy Director 

of Manpower Organization, quality, for the Air Force. Particularly 

privileged to have with us——

Mr. HORN. As long as you are going to go down the line, you will 

save me from asking five different questions if they are not only 

introduced but I would like to know to whom do they directly report. 

Mr. COOKE. I directly report to the Secretary of Defense. 

Mr. HORN. Right. 

Mr. COOKE. Ann reports directly to me. 

Gerry. 

Mr. KAUVAR. I report to the Deputy Chief of Staff for Plans and 

Programs in the Air Force. 

Mr. HORN. Deputy Chief of Staff, Plans and Programs. OK. 

Mr. COOKE. Our next two witnesses, we are particularly privileged to have two commanding officers of DOD field activities, both 

of whom have earned Presidential recognition in the Presidential 

Quality Awards Program, because, in our judgment, quality management is not an office structured someplace, reporting to the Secretary or the Deputy Chief of Staff, it is not an end in itself, it is 

really not a program. It is an approach, a means, and statistical 

tools to optimize organizational performance, to meet customer requirements, and if quality management works, it is going to be the 

people in the field who undertake it as part of the responsibility 

for field command. It is not a separate thing that can exist in and 

of itself. 

And these two gentlemen, General Boddie, who is Commander of 

the Army Research Development Engineering Center in Picatinney 

and Captain Cantfil, who was the Commander of the Naval Station 

Mayport, two of our military leaders who have gotten recognition 

for what they have done in quality control and their commands, 

and, again, I suggest to this—if this works for Defense, it is going 

to work because of the quality of leadership in the field. 

And finally, we are pleased to have Tom Sawner, who is Deputy 

Director of Productivity and Quality Center at the Air National 

Guard. 

Tom, who do you report to? 

Lieutenant Colonel SAWNER. I report to General Sheppard, Director of Air National Guard. 

Mr. HORN. Sheppard? 

Lieutenant Colonel SAWNER. Yes, sir, Director of Air National 

Guard. 

Mr. HORN. Based here in the Pentagon? 

Lieutenant Colonel SAWNER. Yes, sir. 

Mr. HORN. Just so I have it straight Captain Cantfil, which 

naval station was it that you were in charge of? 

Captain CANTFIL. It was Mayport Naval Station in Florida. 

Mr. HORN. M-A-Y-P-O-R-T? 

Captain CANTFIL. Yes, sir. 

Mr. HORN. Where is that located? 

Captain CANTFIL. Greater Jacksonville area of northeast Florida. 

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Mr. HORN. And I wasn’t quite clear; General Boddie, to whom did 

you report? 

General BODDIE. I report to Major General Andrews, the Commander of the Tank Automotive and Armaments Command in 

Warren, MI, which is a subcommand of the Army Materiel Command, the General Wilson command here in Alexandria. 

Mr. HORN. I just want to get the hierarchy straight. 

All right. Proceed, Mr. Cooke. 

Mr. COOKE. Defense began using quality management theories in 

the mid-eighties, particularly in the Air Force and the Navy and 

depot operations, and over the next several years its application 

spread from our manufacturing processes to service processes, such 

as hospital and travel pay, and eventually quality management 

theories were even applied to our headquarters processes. As a 

matter of fact, the Joint Staff in OSD have used the tools and techniques in the development of policy and guidance in the Department. 

Today, most elements in the Department have integrated some 

aspects of this philosophy into their daily operations. Some organizations limit their use of quality management to activities, such as 

strategic planning or the use of teams to resolve problems, but others use the full range of quality theory, including baseline and followup surveys, strategic planning, metrics application, and team 

activities we have. And all these quality activities are based primarily on Deming, Dr. Deming, with his essentially four interrelated components he called System Profound Knowledge, and his 

famous 14 points were based on the four points. 

Now we will say that we have heard, at least since I have been 

here, the IRS saying we followed Dr. Duran. I don’t think anybody 

has mentioned Crosby, at least as long as I was here, but of the 

four leaders in quality management, many of their thoughts and 

principles are remarkably light. But in Defense, we are basing our 

defense quality management on Deming. 

My statement gives you a whole series of examples of quality 

management in the field. I think you may wonder, why did they 

all come from the Pacific area? The reason for that is, a couple 

months ago, when we first gave you an example, many of them 

came from Europe and elsewhere. Anne O’Connor got back from a 

swing through the Pacific Rim and came up with these current examples of how the commands and activities in the Pacific are implementing quality management. 

Very frankly, we tend to focus on the CINC’s, HATCOM, UCOM, 

and the rest, and the theory that if we can get the CINC and his 

staff involved in quality management, the subordinate component 

commanders will come along as part of the CINC’s activities, and 

that today has worked. 

I will not go through each example listed in the statement. However, we are available to respond to questions on any and all of 

them. 

How is our program doing? Well, over the years, I think one important measure of that program, there are awards in the President’s Quality Awards Program. There are two types of awards in 

the program, the Quality Improvement Prototype Award, the QIPS, 

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and then the Nation’s highest quality award in the Federal Government, the Presidential Award for Quality. 

Mr. HORN. Let me just interrupt there, if I might. Just so I am 

clear, who grants these awards? Is it the White House? Is it the 

Department of Defense? What is the body that does these? I was 

rather fascinated by them. 

Mr. COOKE. These are not Defense awards. These are awards 

covering the whole executive branch of the Government. 

Mr. HORN. Who administers them? 

Mr. COOKE. They are administered now by the Office of Personnel, the quality office, which is now part of Jim King’s OPM operation. 

Mr. HORN. OK. 

Mr. COOKE. Applications for the awards are carefully screened by 

panels, just as the counterpart awards are in the civilian sector. 

And I want to boast a little that since the inception of this program, DOD units have earned 59 percent of the Quality Improvement Prototype Awards and 83 percent of the Presidential Awards. 

That is the highest award that can be earned in the Federal Government for quality. 

You have asked what are the factors that contribute to a good 

quality program. One certainly is a commitment of leadership, from 

the top down. Unless we get the commitment of leadership up the 

CINC, General Joulwan in Europe, for example, it is not going to 

work. Another is the commitment and empowerment to the people 

in the field, who, as you have heard from our other witnesses here, 

have any number of good suggestions to make, if they are free to 

make them. Then, finally, we found that a facilitating office, in 

OSD, Anne O’Connor’s office, is very useful in pulling these things 

together, and there are similar offices like that in the military departments and also in the Joint Chiefs. 

Now for all of this improvement, we still have a long way to go. 

There is a change in the Department structure, and now the Quadrennial Defense Review, combined with increasingly high 

OPTEMPO, have added new challenges. We are trying to meet 

them in adjusting our implementation approach to them. 

I could go on. We have a wonderful 90-minute video tape on 

quality we use in quality awards, but somehow I forgot to bring 

that. 

Mr. HORN. Well, send it over sometime, and I will be glad to look 

at it. 

Mr. COOKE. We work hard at it; we have. And I would like to 

offer for the record our Federal Quality Conference coming up 

about a month from now. This conference is here in Washington. 

It started out relatively small, and now there are only a few hotels 

in town that can handle the conference. It is a good program. We 

get large inputs from the field, and, again, I am not talking Defense alone, I am talking the Federal Government. 

[The prepared statement of Mr. Cooke follows:]

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Mr. HORN. OK. We thank you for that testimony. 

Let me ask you a few questions. Remind me of what is the current budget of the Department of Defense. 

Mr. COOKE. The current what? 

Mr. HORN. Budget of the Department of Defense. 

Mr. COOKE. $259 billion. 

Mr. HORN. $259 billion. That is good. Let’s round it off at $260 

billion. It is probably in there somewhere. 

What is the total budget of the total quality management efforts 

made within the Department of Defense, both the services as well 

as all the supporting agencies? Out of the $260 billion budget, how 

many have been affected by the total quality management? 

Mr. COOKE. Mr. Chairman, we do not have a single line item in 

the budget. I can tell you how much my own operation is costing. 

I don’t know how much the service is, nor do they have a single 

item. 

Mr. HORN. Why don’t we get an answer by coordinating through 

your office with the services, file it at this point in the record. Is it more than $1 billion? 

Mr. COOKE. I don’t think the services here at the Washington 

level would have a total figure either. 

Dr. Kauvar. 

Mr. KAUVAR. I agree. We don’t have a program. 

As Dr. Cooke said, quality is not a program in the Air Force. We 

look at it the way we look at safety. It is something you think 

about all the time. We can give you the budget for the number of 

people, for example, employed at the Air Force Center for Quality 

Management and Improvement. 

Mr. HORN. That is nice, but I am not interested in that. I am interested in what degree has total quality management permeated 

the life of the Department of Defense, both civilian and military. 

Let’s face it, folks. You have a fine bunch of projects here; but 

it has nothing to do with the degree to which the Department of 

Defense, and the services under that Department, are really serious about total quality management. Now what it sounds like is 

that, gee, we are concerned about quality, just like we are concerned about safety. Everybody that says that shows me they really 

aren’t doing much on quality. Otherwise, you could put your finger 

on it. 

If somebody gave a hoot about quality in the Department of Defense, they would say, you show me annually where this approach 

to management has been implemented in the Department. It is the 

first thing I would ask if I were Secretary. In fact, I will share 

some of this with the Secretary and say, you know, if we are serious about this, you ought to be able to tell me we have $20 billion 

worth of the Department of Defense investment in a total management, quality effort. 

I don’t think you can tell if it is $1 billion. I am not saying you 

should have it here, but please file it for the record in the next 2 

weeks or 3 weeks and work with our staff to get a figure so we 

know to what degree is this actually taken seriously in the Department of Defense. 

Mr. COOKE. Mr. Chairman, I think the examples we gave you, we 

can triple the number of examples we furnished to your staff in 

235

this statement or prior without our figures. The fact we have one 

in open competition throughout the executive branch with a great 

majority of quality awards is a demonstration of the fact that Defense is committed to quality and is taking it seriously. 

Mr. HORN. Well, that is nice to say. The proof in the pudding is 

how many billion dollars has been affected by the process, and if 

it isn’t more—you have been at it for—what—8 years, I believe. Is 

that correct or am I wrong on that? 

Mr. COOKE. I think probably a little longer than that. 

Mr. HORN. Let me put it to you another way. I want at this point 

in the record, without objection, the amount of the total budget affected by the processes of TQM, whatever you want to call it, total 

quality management. 

I can ask this question. Implementation of total quality has been 

a policy, as I understand it, for 8 years. How many commands, organizations have genuinely learned and adopted TQ as a way of 

life? In other words, what percent of the total organization? I think 

we need to know that to see if we are being taken seriously on this. 

As I said earlier this morning, I am sure it got reported to you, 

we have known for several years there were two agencies that will 

not be able to make the mandate of Congress to show us a balance 

sheet by the fall of 1997, the Internal Revenue Service and the Department of Defense. So we have known that around here for 5 

years. In the 103d Congress, under control of the other party, I sat 

on a relevant committee when the IRS was examined on that point. 

It is just that we have had 5 years now elapse? Are we any closer, in terms of total quality management, in those particular processes? 

I am not saying you are not doing wonderful work in these examples. That is wonderful. I give you credit for that. The question is, 

there are huge problems that also need this approach; and nothing 

in that testimony convinced me that the Department of Defense 

was doing anything about it. So I would be glad to have it and put 

it in the record. 

Now, what I am curious about now, if you heard the testimony 

from the State of Ohio, the State of South Carolina and with the 

experts, it is key if we are serious about an effort that that person 

report to the chief executive. So I would ask, if you have a total 

quality office, why isn’t that structure to report directly to the Secretary of Defense, not through the Administrative Assistant to the 

Secretary of Defense or the Director of Administration and Management? I guess I want to know, if they are serious, the boss has 

to permeate that through the organization. 

Mr. COOKE. Mr. Chairman, total quality management is not a 

line function that you can order any more than you can order the 

Congress to follow total quality management or, for that matter, 

the Speaker could do that. Total quality management is an approach to a problem that we have been following assiduously. 

We can give you the percentage and estimates; and we have 

given you the percentage of Army, Navy, Air Force, and Marine 

Corps who have had some quality training. The Marines, last time, 

I think, said 100 percent. The Air Force said 83 percent have been 

trained to some degree. 

236

Now when I heard the other witnesses, you did not say, how 

many are doing diagrams? How many of this? How many of that? 

Mr. HORN. No, but what you did here is training, isn’t enough; 

and what you heard from the witnesses was that if you are doing 

training and then you have no teams to put these people on, in essence, you are doing nothing. You can have a lot of training, but 

unless you have a process to feed that training into, you have a 

command—and now we are talking Ohio, South Carolina, where 

they have accomplished these things. 

Mr. COOKE. I heard South Carolina say there is a quality office 

for each subordinate unit of the State, so it doesn’t quite sound—

I certainly don’t want to demean the very fine progress that the 

State of South Carolina and Senator Thurmond—I have a son who 

graduated from Clemson, by the way. But what I am saying is that 

we will stack up our quality program—we will try to get the figures 

against any in the country. 

Mr. HORN. OK. How do you go about determining—and the other 

services can get into this—determining those that have and those 

that have not adopted total quality? Do we know which parts of the 

organization have not adopted it and which parts have adopted it? 

Ms. O’CONNOR. We do regular reviews in the field to look at who 

has adopted quality and who has not. It might be helpful to give 

you background on how we structure this inside the Department. 

At the OSD level, we have a group called the Joint Quality Network, composed of the Army, Navy, Joint Staff, and myself. 

Mr. HORN. Who sits on that committee? 

Ms. O’CONNOR. That is someone from the Army. 

Mr. HORN. Who is the someone? 

Ms. O’CONNOR. The quality management folks. Tom Kislawski 

right behind me represents the Navy. 

Mr. HORN. What is his title in the Navy? 

Ms. O’CONNOR. He is director of the TQL office. 

Mr. HORN. That is one who reports to the Under Secretary of the 

Navy. 

Ms. O’CONNOR. I believe so, yes. 

Mr. HORN. So we know the Navy has an office where there is a 

quality office and it reports directly to the Under Secretary, and 

this is the deputy to the person that reports to the Under Secretary 

of the Navy. 

Ms. O’CONNOR. Correct. 

Mr. HORN. Presumably, I take it, no one is there from the Chief 

of Naval Operations’ Office. Or is the Under Secretary’s Office expected to deal with that? 

Ms. O’CONNOR. No, that is correct. The Under Secretary’s Office 

coordinates with Chief of Naval Operations’ Office. 

Mr. HORN. Give me the next person, and to whom do they report? 

Ms. O’CONNOR. The next person would be Lieutenant Colonel 

Dennis Falencort, who reports to the Air Force office, who reports 

to Mr. Kauvar. 

Mr. HORN. We have to whom you report. That was, as I look at 

my notes, you report to the Deputy Chief of Staff of the Air Force 

for Plans and Programs. 

237

Ms. O’CONNOR. Then the third person is Randa Vagnerini, who 

reports to the Director of Management for the Chief of Staff of the 

Army. 

Mr. HORN. Director of Management for the Chief of Staff of the 

Army. 

Presumably—in all these somewhat distant relationships with 

the major people that make a decision, presumably there are staff 

functions here—we aren’t talking line functions—where they can go 

back and get something done. 

Ms. O’CONNOR. No, they go back and get quite a bit done, in fact. 

Mr. HORN. Well, I would like to hear about it. 

Ms. O’CONNOR. Good. 

The fourth person is Christine Cavel, who represents the joint 

community. She reports to the Comptroller on the Joint Staff, who 

reports to the Director of the Joint Staff. 

Mr. HORN. We are talking about where? 

Ms. O’CONNOR. The Joint Staff, as in the Chairman of the Joint 

Staff. 

Mr. HORN. OK. 

Mr. KAUVAR. Let me give you examples from the Air Force which 

may clarify that. 

You asked how many people were trained, and the answer is 100 

percent. You asked how can we determine who has adopted quality 

management. 

The answer is twofold. We have a system where every unit does 

a unit self-assessment at least every 18 months, and those scores 

are brought together so we can see not only how they are spread 

across the Air Force, but how individual units have improved. Until 

this year we have had a system of sending the IG out to do quality 

Air Force inspections. 

About 2 years ago, the Chief of Staff of the Air Force asked me 

to come to work for him, because we recognized that the Air Force 

had reached a kind of glass ceiling, a crossroads that many companies had reached on a quality journey. After a year of work, we 

made some major changes in the Air Force quality program. 

The first thing we did is link it more directly to mission outcomes. So we were less interested in evaluating the process than 

we were in enhancing mission accomplishment in the Air Force. 

Second thing we did is take a look at the entire spectrum of assessment and inspection and award in the Air Force and determined 

we were spending way too much time on auditing when we had the 

quality indicators in place through the unit self-assessment that 

gave us the answers as to how well individual units were doing. 

We just established the Air Force Quality Institute, which was 

our primary schoolhouse and was responsible for, essentially, justin-case training to the application level for every individual in the 

Air Force; and we stood up the Air Force center for quality and 

management innovation in its place. At the same time, we merged 

two career fields, manpower and quality, because we wanted to 

have, at every single unit and center, an office responsible for quality management and process reengineering. We made a decision 

that that should report to the Director of Plans and Programs in 

each major command or unit, rather than to the Commander, because we wanted to have symmetry throughout the organization 

238

and an individual whose full-time job it was and who does report 

to the Commander to have quality management as a task. 

For the sake of symmetry, we moved it to the newly created position of Deputy Chief of Staff of Plans and Programs in the Air 

Force. We have had Baldrige judges and both the Chief of Staff 

Unit Quality Awards and the Secretary of Air Force Team Award. 

We rely heavily on civilians to come in and help us with our quality 

program. 

It is pervasive in the Air Force. It is radically different from 

what it was a year and a half ago. We think we are on the springboard to more success than we have had in the past. 

The Chief was intimately involved in every single one of these 

decisions and the direction to operationalize quality in the Air 

Force, so I don’t think it lacks for senior leadership attention. 

The difficulty I would have in trying to tell you how much money 

is spent is that I would have to go back and try to track in on every 

team chartered on every single base and how much instruction 

they got and how much time it took them to accomplish their mission. That is literally thousands of teams over a period of years. 

What is fairly easy to tell you is how much money we are spending 

on the overhead process. 

Mr. HORN. I don’t think I am interested in the 8 years or 10 

years or whatever service thinks it has been engaged in this. What 

I am interested in is, where are we now? What percent of the military command, what percent of the Air Force support systems, be 

they under the military command or directly under the civilian 

command. I am interested in how far this is going now. 

Mr. KAUVAR. It is pervasive in every command in every unit of 

the Air Force. 

Mr. HORN. See, when they say pervasive, my suspicions get 

aroused. Because I have never seen it pervasive in much of anything, even in the private sector. The way we sort of nibble at it 

in this and many agencies—and there is nothing wrong with that. 

Over time, you expect more. In other words, incrementally, you 

move step by step. I am not knocking that. But what I am saying 

is if we had 8 years in this, we must have accomplished at least 

25 percent of the organization, I would hope; and that is setting a 

very low goal. 

But I realize the world is complex. People sit in Washington and 

think there is something happening and if they go to the field and 

keep their ears open they will know nothing is happening or they 

are just filing the paper. We have all been in human organizations 

where that has happened, and usually that is what happened. Nobody wants to tell the boss the bad news. 

You mentioned Inspector Generals. It is one of my questions 

here. Are we learning something from the Inspector Generals about 

where some of our shortcomings are? And don’t tell me the organization has no shortcomings or I will say good-bye. The fact is, they 

have a lot to contribute. 

And I just wonder are we taking advantage of what the Inspector 

Generals are saying——

Mr. KAUVAR. What I tried to do——

Mr. HORN [continuing]. During the process analysis on those 

problems? 

239

Mr. KAUVAR. To help clarify that, let me submit to you, I will be 

happy to get you more copies of the report of the Chief of Staff ’s 

Blue Ribbon Commission on Organizational Evaluations and 

Awards which we started last year. And you’ll see what the responsibilities of the Inspector General are. 

I think another way to answer your question might be, and I’ll 

be happy to provide this for you, is a, across the Air Force, listing 

of the unit self-assessments and the scores over a few years so that 

you can see for any particular unit, for example, a wing at Dyess 

Air Force Base, how it scored on the standard Baldrige criteria 3 

years ago, last year, and this year. 

Mr. HORN. Right. That would be fine. 

Mr. KAUVAR. I would be happy to do that. 

Mr. HORN. OK. I realize different services treat things in different ways and there are a lot of ways to achieve the goals without all following the cookie cutter way. Yes, Ms. O’Connor. 

Ms. O’CONNOR. To go back to what the joint default network 

does, that network, the folks around that network are the people 

who work this full time. They know the nuances of it. We get together every couple of weeks when we’re in town, which is more 

often than not. And we discuss what is the best way to set policy 

for this across the department? Is it a directive? Is it a support letter? Is it a videotape? Is it going out to the field? Is it a data call? 

And over the years, we continued to look at this on an ongoing 

basis, because we think that it will change over time and we will 

need some additional structure as time goes on. But currently we’re 

very pleased with where we are right now. 

Now, in addition to the joint quality network, we also have what 

we call the defense quality network. There’s some, a number of defense agencies in field activities as well as the unified commands 

that will come in for that meeting. Because of the number of the 

people that have to come in we’ll hold that every 2 or 3 months. 

We’ve also, to help us in defense, but also the rest of the Federal 

Government reestablished the Federal quality network, which has 

a representative from each of the Federal agencies on it. And that 

meets about quarterly as well. We wondered when we brought that 

back up if anyone was really interested in the rest of the Federal 

Government in continuing this on. And we had 35 or 40 people at 

the first meeting we had. And they’ve continued to stick with us 

through this. So that’s a great vehicle for networking back and 

forth, finding out who is doing what and what new ideas there are 

out there. 

What we found has worked best for us inside the department is 

more of a central support setup but with a decentralized implementation. For example, the Air Force has a system by which they do 

this. The Navy has their system. The Army has their system as 

well. And we try and cover on the OSD staff the unified commands 

because we think they’re the linchpin to the operation here and 

also defense agencies and field activities. 

What we have tried to do is set up a facilitating mode as opposed 

to a directive mode, because what we found over time is that this 

succeeds based on leaders in the field wanting to do this, not because we necessarily set up some program. 

240

So when they tell us that they need something we try and respond to that, and then we also go out into the field, as I said, and 

we do a review, because, as you just mentioned, you get data calls 

up in Washington, and you’re not really sure what that data means 

to you by the time it goes all the way up the chain of command 

and shows up here. So we actually go out to the field, and we pay 

particular attention to the overseas areas because they tend to be 

at the far end of the supply line for assistance, and have gone over 

there, looked at what they need, asked them if we could do anything for them, particularly looking at the unified commands. And 

in fact, we worked with special operations command for a couple 

of years now. They’ve had some great successes. 

We just started working with European command about 6 or 8 

months ago and they’ve got their strategic plan now. And we’re just 

starting to work with Pacific command. It is a slow implementation, but it’s a slow implementation by design because we think 

that’s the better way to do it in a department that is this complex. 

We do a lot of implementation differently than the private sector. 

For example, in the unified commands, we won’t send these folks 

off on their 2, 3, 4, or 5-day offsite somewhere, because they simply 

cannot by operational realities be away from the office for that 

length of time. So what we’ll do with them is we’ll have strategic 

planning sessions that last no longer than 4 hours, and they can 

do them Monday, Wednesday, and Friday morning, or they can do 

them Monday, Tuesday, Wednesday, Thursday, Friday, whatever 

they choose to do. So that the senior folks that are sitting around 

that table from the CINC on down can get back to that in-box, get 

back to those phone calls, get back to the operational mission. 

So what we do, and in fact Dr. Kauvar coined this term maybe 

a year ago, is we wedge it in where we can find the minimal 

amount of time that they have in their schedule. We attempt to 

wedge it in to get them started on the things they need to be doing, 

and then move them continually down the road. And one of the examples, with the OPTEMPO that we’ve had, we’ve occasionally just 

had to stop. We’re working with the United States, the admin folks 

in U.S. NATO, and we had gone down the path with them and we 

started to develop their strategic plan and then the NATO Summit 

was announced. Well, they’re going to be dedicated full-time making sure that that summit goes off, so we will just back up from 

them and we’re totally on hold until September, the summit will 

be over, and then a whole bunch of people take, use, or lose leave 

and readjusting and clean out in boxes, and then we’ll go back in 

September. So the key to the implementation in the department 

with our OPTEMPO is really flexibility, to keep the aim in mind 

but be flexible about how we get there. 

Mr. HORN. Does your office have the responsibility for the defense agencies such as Defense Logistics and others such as that 

which aren’t under a command and aren’t under one of the services? Do you have responsibilities with these agencies to——

Ms. O’CONNOR. We don’t have direct responsibility but we will 

help them out. We’ll help people——

Mr. HORN. Who has responsibility for those? 

Ms. O’CONNOR. That’s the responsibility of the Commander of 

Defense Logistic Agency. 

241

Mr. HORN. Yes and that Commander reports to whom? 

Ms. O’CONNOR. The Under Secretary for Acquisition and Technology. 

Mr. HORN. Mr. Kaminski. 

Ms. O’CONNOR. Yes, that’s true. 

Mr. HORN. OK. To what degree has Mr. Kaminski’s people been 

educated in this area? 

Ms. O’CONNOR. A number of years ago they were very well educated. The quality function was located there. We had some pretty 

good successes. In fact, Dr. Kauvar was located in that community 

at the time. And he had some very good successes there. They still 

were—what we will do on the OSD staff is we will get—they know 

we’re there. We send out a periodic memo that tells them what 

we’re there for, what we do, and to give us a call if they need anything. We do get frequent phone calls from staff members who are 

attempting to work on processes and to improve the processes, and 

normally that will be either linking with, say, their subordinate 

commands as DLA or going to the Army and the Navy and the Air 

Force to form up process action teams to look at some significant 

processes. 

Mr. HORN. And has much of that occurred since the function 

now? I am not quite clear. Was it removed from the Kaminski shop 

over to——

Ms. O’CONNOR. It was shifted. 

Mr. HORN [continuing]. To Cooke’s shop? 

Ms. O’CONNOR. It was shifted several years ago. And it’s expanded tremendously. 

Mr. HORN. Why was it shifted? 

Ms. O’CONNOR. I don’t know. 

Mr. HORN. Maybe Mr. Cooke can say. 

Ms. O’CONNOR. I think it was just a better location for it, because 

under ANT, it was really an acquisition initiative, and we didn’t 

want it to have a particular flavor that it was the acquisition community, the comptroller community, or the policy community. This 

way it covers the entire department. 

Mr. HORN. OK. Do you feel that since the shop has been moved 

that the acquisition shop has lost interest in total quality management? 

Ms. O’CONNOR. Absolutely not. We have worked with them 

through the acquisition reform effort. We’ve provided the facilitation for that. And we worked with Colleen Preston from the time 

she come on board all the way through. 

We also get regular phone calls from the folks in ANT requesting 

assistance, and we will provide that, but the effort has expanded 

tremendously since it’s moved, because people realize it’s not just 

an acquisition initiative anymore. This is an initiative for the entire Department of Defense. So it’s expanded across all of the elements of the OSD staff. 

Mr. HORN. Is it your office that will be able to survey the defense 

agencies such as logistics as to the degree to which they are involved with total quality management teams and success and so 

forth? 

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Ms. O’CONNOR. If we were to do a survey, we would normally 

survey everyone in the department, including the military departments and ask for feedback. 

Mr. HORN. Yes, well fine. 

Ms. O’CONNOR. That is excessive. 

Mr. HORN. However you do it, that is your business. I am confident the military department has got the data. I am just wondering who will get the nonmilitary department data, which are a 

whole series of agencies? 

Ms. O’CONNOR. That’s correct, sir. 

Mr. HORN. OK. 

Ms. O’CONNOR. We would coordinate that as we did for the data 

call you sent us. 

Mr. HORN. Fine. OK. Now that will include who has and who 

does not have any emphasis or projects, however you want to define it, on total quality. 

What I understand the original strategy was to build total quality organizations command by command with the commanding officer being responsible for the success. Then the effort was shifted 

to randomly training individuals at schoolhouses, if you will, remote from operational commands. 

What percentage of those trained do we know, and this I ask of 

the services but I guess you are not necessarily, except for Mr. 

Kauvar, probably able to answer that. What percentage of those 

trained are still on active duty? How many were ever used in total 

quality billets? And has this strategy really worked? In other 

words, at one point there was—and this is certainly true of the 

Navy. I know from my own experiences years ago with some people 

that the commanding officer was properly pinned with responsibility for this. And then the effort was to just randomly train a lot 

of people, but there was no place for them to go and practice those 

new found skills, whether they be 2 days, 4 days, 6 weeks, 2 weeks, 

whatever. 

So we are just curious as a committee with oversight on economy 

and efficiency the degree to which this operation is still running 

somewhere. And I would be interested in what you have to say, Ms. 

O’Connor. 

Ms. O’CONNOR. Part of the answer to that rests in how quality 

management started in the Department of Defense. Normally when 

we have an initiative, either you on the Hill or the OMB or someone else will say to us, this is what we’re going to do, or we get 

an idea to do something at the OSD staff. And then hopefully we 

work with the military departments to refine that policy before it 

goes out. 

In this case, I was in the field when we started implementing 

quality, and what happened was some of the folks in the depots 

with Navy and Air Force saw this MBC white paper of Japan ask 

why can’t we feature Dr. Deming. And they wondered, why can’t 

we? And so they starting working on trying to implement some of 

those things. 

Now at the time, not just in the Department of Defense but even 

in the private sector, people said, well, this is great, it works for 

manufacturing and that’s about the only place it applies. So the depots started to work this and they saw some very good successes. 

243

They didn’t say very much to other folks even inside the command. 

And then the command found out that we had some successes out 

in the field and they went out and then they created a commandwide program. And so instead of this being an implementation that 

started at the top and went downward, it actually started more in 

the field. A couple of years after the field started, then the folks 

up in OSD formed up an office at that point under the Under Secretary for ANT. So we had a lot of existing groups in the field and 

that’s where you probably heard that we had commands that did 

this. 

Well, Naval air systems command was one, because they’ve got 

a lot of depot operations. The old Air Force logistics command, of 

which I was a part at the time, we had a lot of depot operations. 

And when we went through this development in the field, first 

we started with, it can’t be done anywhere but on a shop floor. And 

then we said, well, really is that true. And the Wright Patterson 

Air Force Base hospital actually revised the way they did entire 

prescription refills. And that may sound like a very small thing, 

but it used to be a 45-minute wait for a prescription, and there was 

never any place to park up front, and they were only open during 

duty hours, and it was really quite tedious to get a prescription 

filled. So when they did that, it really sent you, as—it was the shot 

heard around the base, because so many people got prescriptions 

filled and thought this was great, but let’s do this in more places. 

So that proved it can be done on the service side of the house. 

Travel voucher processing, it was an instant process at AFLC 

headquarters. You could hand it in, wait 10, 15 minutes, the folks 

in back would add it all up, and you would get your money. It was 

a great setup. 

So that’s where it spread. 

Mr. HORN. This was which area? 

Ms. O’CONNOR. Wright Patterson Air Force Base. 

Mr. HORN. Yes, but what was the subunit there? 

Ms. O’CONNOR. It would be the headquarters of Air Force logistics command. 

Mr. HORN. The finance office or whatever, the travel or——

Ms. O’CONNOR. It would be the payroll office at the headquarters. 

Mr. HORN. Payroll? 

Ms. O’CONNOR. Yes, the travel office at the headquarters. 

Mr. HORN. I just wanted to get that straight. 

Ms. O’CONNOR. And then what we saw in the long run after applying this to various service processes, we started looking at applying it as well to headquarters processes. Well, a lot of things 

that the headquarters don’t measure as easily, and things in the 

services, in the service don’t measure as easily as the shop floor. 

But we did find that the very process of getting all the inputs 

from the military departments, working the policy, putting the information back out, and the tools, the techniques that we used in 

the process action team were invaluable. Even at the OSD level 

and the military department level and the major command level as 

well. 

Mr. HORN. So you printed some of these success stories and got 

them first throughout the Air Force; was it? And did the rest of the 

244

Department of Defense see some of these, what could happen with 

a little thought that would take a couple——

Ms. O’CONNOR. Early on, it was more of an informal system. And 

I was on the IG Air Force logistics command, and we were sort of 

the people who spread the word, which is one of the reasons why 

the Air Force used the IG in this implementation, because people 

respond to what they’re graded on to a great degree. 

And the IGs were everywhere. Those were the folks who actually 

went out across the command and could see all of this. And then 

they would share the ideas. 

But one of the things we have wrestled with over the years is 

we’ve got a lot of installations out there. And some of them have 

common processes. And how do we get it from Misawa Air Base 

Japan to—well even to Yokosuka Air Base, or Yokosuka Naval 

Base Japan, or over to the European theater, to Aviano Air Base. 

I mean, how are we going—because the folks at Misawa Air Base 

Japan don’t have the travel money to go to Aviano Air Base. 

So what we’ve done is on our web page, we’ve set up what we’re 

calling a best practices data base. We went out with the initial 

data call for folks to send information back up through the chain. 

And we are subcategorizing those under topics such as maintenance, and then we’ll have a subcategory eventually that says 

flight line maintenance, F–16 maintenance, et cetera, to share 

those ideas back and forth. Because that’s one of the key issues 

we’re working on is how do we share the ideas. 

Mr. HORN. Yes. And that’s a good thing to work on. 

Mr. COOKE. Mr. Chairman. 

Mr. HORN. Excuse me a minute. Since you served on an Inspector General’s staff, do you get the various Inspector Generals into 

the Pentagon on an annual basis or something and sit down and 

talk out what are the things they are finding that are still not 

straightened out regardless of service and then try to encourage 

teams in this area? How are you doing that? How are you using 

that Inspector General’s knowledge and how do you hear about it? 

Ms. O’CONNOR. Well, actually a couple of years ago there used 

to be an IG network forum that reported to the Federal Quality Institute that had IGs from across the Federal Government on it, and 

we looked at that. But that has since been disbanded as the FQI 

was disbanded. So at this point, we don’t have an internal structure, but certainly I work with the DOD IG on any issue that they 

feel that is necessary. So we coordinate as necessary with them. 

But we do not get the IGs together specifically, no. 

Mr. HORN. Do they ever come together in a conference within the 

Department of Defense, whether you are there or not? 

Ms. O’CONNOR. Do we have an IG conference? 

Mr. COOKE. I’m sure there’s an IG conference, Mr. Horn. 

Mr. HORN. I would hope so. 

Mr. COOKE. Yes. 

Mr. HORN. OK. Mr. Cooke, sorry to interrupt you. 

Mr. COOKE. I was going to say that the story about quality started from the depots and particularly the Air Force and the Navy 

were a little like the same story of how it started in the Federal 

Government, where the word came through, and I was then a 

member of the President’s Council and Management Improvement. 

245

And the council established—in essence, a pool of quality experts 

came. We contributed people from each of the departments, which 

eventually metamorphosized into the Federal Quality Institute. 

And now, of course, have moved over to OPM exclusively. 

But I think Anne is quite right. It started because of the good 

things that we were learning about, not only in some of the departments, but also in industry, which led to the emphasis that the 

PCMI put on quality training, so it’s the same process. 

Mr. KAUVAR. One of the things that we’ve done in a number of 

years in the Air Force is to hold an annual quality symposium in 

Montgomery, AL, that’s attended by about 2,000 people and all the 

four-star Commanders in the Air Force. And that’s one of the ways 

that we used to share the experiences and the lessons learned. The 

Department of Air Force Inspector General has just finished a 

worldwide swing to take the results of the Blue Ribbon Commission 

directly to all of the Air Force commanders. 

Mr. HORN. OK. How about the Army? General Boddie, do you 

have any thoughts on how the Army does this on a system-wide 

level in terms of either using the IG, having an annual conference? 

General BODDIE. Sir, I’m a field soldier but I can tell you——

Mr. HORN. I know you are. 

General BODDIE [continuing]. But I can tell you that General 

Reimer, Chief of Staff of the Army, General Wilson. 

Mr. HORN. You might pull that microphone closer, it is a little 

hard to hear you. 

General BODDIE. OK. And General Wilson, the AMC Commander, and my boss are all very much supporters of total quality 

management, supporters of training for total quality management. 

General Wilson has used his IG and AMC to go around to see all 

of those Commanders that are talking about teaming, how are they 

really doing. So he’s had the IG look at the teaming aspect to make 

sure that that’s truly happening. So from my experience, and I’m 

a big believer in total quality management, I’ve been very fortunate 

to have my chain of command totally supportive of what I believe 

very strongly in. 

Mr. HORN. Captain Cantfil, are you aware of how the Navy 

spreads the word throughout the Naval establishment? 

Captain CANTFIL. Well, Mr. Chairman, I’m actually further down 

the food chain than the General to my right here. But from a field 

activity level, Dr. Doherty, who is the Navy’s TQL director up in 

Washington, her office-to-field activities, where I was when I was 

still at the Naval Station, was active in terms of sharing information, passing information back and forth. So we had a real 

connectivity back and forth along those lines, both in terms of how 

we set our program up, if we needed any help along those lines and 

stuff. 

Did I ever attend a symposium that the Navy held on quality? 

The answer is no. I don’t know that the Navy does it annually like 

the Air Force does or not. Was I ever inspected on quality management techniques? I would say the answer is no on that also. 

Mr. HORN. Where was your assignment before this current assignment at the Naval Station? Where did you have an assignment? 

246

Captain CANTFIL. My current assignment is the Deputy Director 

of the Joint Interagency Task Force East in Key West, FL. 

Mr. HORN. I see. 

Captain CANTFIL. And that——

Mr. HORN. I met with their group a few months ago on their 

drug eliminations. 

Captain CANTFIL. Yes, sir. 

Mr. HORN. Very interesting group. 

Captain CANTFIL. That’s my current assignment, is a deputy 

down there. Prior to that, I was a CO of the Naval Station at 

Mayport. And prior to that, I was a navigator on the U.S.S. Abraham Lincoln, a nuclear carrier out of Alameda, CA. 

Mr. HORN. How much did you hear about quality management 

in those various roles in the Navy? And did you ever go to any 

courses they had on the subject? 

Captain CANTFIL. My first experience in TQL was as the CO of 

Naval Station Mayport. That was my first experience with it. And 

I had training prior to getting to the Naval Station back in 1994. 

Mr. HORN. Now was that at your initiative or was that at the 

command’s initiative to which you reported? 

Captain CANTFIL. At the time it was at my initiative. And subsequent to that, the Navy has directed that to take command of any 

major installation, you would have to go through senior TQ training. 

Mr. HORN. How about you, Lieutenant Colonel Sawner for the 

Air National Guard? What can you tell us about the National 

Guard spreading the word on total quality leadership or management, whatever you would like to call it? 

Lieutenant Colonel SAWNER. Forgive my cold. We’re hooked in 

tight with the Air Force. And because the Air National Guard, in 

Federalized reports to all the different gaining Air Force major 

commands, as we have gone through the last 3 to 4 years of quality 

Air Force assessments, our Air Force Baldrige-based assessment, 

we were tied in with all the different variants with this and the 

different major commands, all very similar but at the same time 

enough differences. And so we ended up forming teams that went 

out to assist our units doing a previsit when the commander requested. And during that process we brought people from other 

units that had previously been through an assessment or were very 

knowledgeable to share the wealth back and forth. And it would 

not be a pre-inspection. It would be a here is what this means to 

us, is that what you meant to say. And, oh, by the way, most likely, 

you’re doing this and this and this, so that that assessment, that 

unit self-assessment was the best possible instrument it could be. 

And so that was one thing that helped a tremendous amount. 

And Tyson’s Corner is where the quality center is located. It’s 

our schoolhouse. And academic instruction is about 25 percent of 

what our organizational energy is focused on. We taught about 160 

courses last year for about nearly 5,000 students from all over the 

Air National Guard. Students come in from——

Mr. HORN. How many in all? How many students, 5,000? 

Lieutenant Colonel SAWNER. About 5,000 in the last year. 

Mr. HORN. If I heard it right. There is an echo over here. 

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Lieutenant Colonel SAWNER. We teach those both at the quality 

center. But the majority of them are taught at the unit. We’ll send 

a mobile training team out to do that. But in the process of doing 

that, we’ve developed a cadre of adjunct instructors that are people 

from the field. They’re from the operational unit. Most all of the 

team, they’re operationally oriented, some line function, and they 

do this as an additional duty because they have an interest in 

doing it and because they like to. 

I wish I was smart enough to say we planned it that way. But 

what’s been created is all of these, now over 300 of them, and they 

range in rank from staff sergeants up to major generals, that come 

in and teach with us in a teaming mode, and they’re fully qualified 

to teach just as well or in many cases better than my staff. That 

has created a center of expertise at the unit level to embed this 

throughout the organization. And it gives that Commander an internal resource. And because one of the things that we found early 

on is a lesson learned was that you really had to avoid a concept 

that I call ‘‘doing’’ quality. ‘‘Doing’’ quality is characterized by how 

many folks you got trained over how many teams you’ve got without focusing on what’s actually being improved, how are you helping embed this and change a culture of an organization. 

So by putting those centers of expertise out there, that’s really 

helped us. And it also shares the wealth big time. Because they 

will go to the different States with us and see what’s going on there 

and take it home to their home unit. And it’s worked very well. 

Mr. HORN. Now, are you full time with that center as a regular 

Air Force officer, or are you part of the Air National Guard? 

Lieutenant Colonel SAWNER. Sir, I was initially hired as a regular Air Force officer. I spent 18 years in the regular Air Force. 

And 3 years ago, General Shepperd invited me to join the Air National Guard. So I’m an Air National Guard officer on full-time stat 

tour now. 

Mr. HORN. I see. Let me ask you. It seems to me if I were running an organization, as I have run one on the civilian side, among 

the criteria that I had for promotion would be the degree of which 

somebody took care of matters such as quality leadership, quality 

management, whatever word you want to use in the improving of 

one’s work force and improving one’s system. 

To what degree does the Air National Guard have anything to do 

with quality management, quality leadership? Well, I realize that 

is an out—the leadership—obviously, you won’t promote without 

some leadership. I am talking about doing for the organization they 

have had the responsibility to head. Is there any recognition in the 

promotion system that, yes, you ought to get a few points for that, 

not just your ability to fly a plane, not just your ability to lead a 

company, your battalion or whatever it is, and I realize there are 

different terms in the Air Force, but where is that? Is it in the promotion system somewhere that we should give a hoot about quality 

management, quality leadership? 

Lieutenant Colonel SAWNER. Well, I can answer that two ways, 

sir. One, we have the same officer rating system that the Air Force 

does. It’s identical. And it is weighted. There’s a specific block in 

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formance and on teamwork. And that is a relatively recent change 

in the last 4 or 5 years. 

Mr. HORN. Yes. 

Lieutenant Colonel SAWNER. More——

Mr. HORN. On that point, if the services, and coordinated by Ms. 

O’Connor and Mr. Cooke, would give us the actual criteria on promotion of all the services so we can see to what degree this is a 

factor and is it weighted, let us know what the weighting is. I have 

seen some of that in some organizations, not the services that have 

been off the wall in their weighting some time, it is like 2 percent 

or something, which tells you something. But go ahead. 

Lieutenant Colonel SAWNER. Let me give you a little more real 

world actual, and this is what I use, because it’s more than just 

anecdotal. 

I mentioned a minute ago that we had right now on the books 

approximately 300 fully qualified adjunct instructors. We’re constantly growing new ones; we’re grooming them all the time, anyone that has an interest. It’s a pure voluntary kind of a thing with 

their commander’s permission. The commanders like this. They 

think this is a real good deal that they’re sharing their wealth in 

other places and growing. It’s almost classic Malcom Knolls adult 

experiential learning for the instructor. And we’ve discovered in 

many cases that the instructor gets more out of it than the class 

does in building this functional expertise. 

But what I have noted is that my biggest turnover in adjunct instructors is they get picked for command. 

Mr. HORN. They can what? 

Lieutenant Colonel SAWNER. They get picked up for command 

within their unit. 

Mr. HORN. I see. 

Lieutenant Colonel SAWNER. And they don’t have nearly as much 

time to be an adjunct instructor then. And so if I’m losing adjunct 

instructors because they are being selected, they are being promoted, they are being put in increased responsible positions, well, 

I’m doing my job. And I’ll take all of those. And I keep getting 

those calls every day, I’m sorry, Tom, I can’t come teach for you 

again, I’m now the support squadron commander or this supplier 

or whatever. And that’s the proof in the pudding that we’re embedding this the right way. 

Mr. HORN. Excuse me. That is good news. But then the question 

is 1 year, 2 years, 3 years down the line has it made a difference 

in how they conduct themselves and how they analyze and help develop the organization that they are now leading? 

Lieutenant Colonel SAWNER. I can only give you an anecdotal, 

but my gut is absolutely. Because what we talk about a tremendous amount is that the task here is not to do quality, it’s to 

change organizational culture. It’s to embed in that culture systemic and continuous improvement as a mind-set. And the only 

people that can change culture and our literature supports this, 

consciously, is the senior leadership of the organization. And so

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their task is to embed that culture. And for the record, if it could 

be submitted, we sent a statement. 

Mr. HORN. Without objection, that will be put in the record at 

this point. Hand it to the fine reporter right next to you. 

[The prepared statement of Lieutenant Colonel Sawner follows:]

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Lieutenant Colonel SAWNER. But we think that that task of leadership—and that gets into a little bit of—Dr. Mangrately talks 

about self-organizing systems. And if the role of the leader is to 

model the behaviors and to model the core values that we want 

that organization to have, so if these commanders, these new commanders that have been instructing this, they aren’t going to instruct it unless they believe it, unless it’s part of their daily activities. So I would say that’s what they’re going to model. They’re 

going to model, and we’re doing the right things. 

Now, in the process of doing that, those behaviors are the ones 

that are going to be picked up by the people that are working for 

them. We talked to commanders about signals are really critical, 

because you’re sending them all the time. People take mental snapshots of every single thing that you do as a senior leader. And they 

watch you all the time, whether you’re intending to send or not. So 

you have to be very conscious to send those right signals. And the 

only way to do it is to model the behaviors that you want replicated. So we think that’s working real, real well. And that’s a key 

piece of some of our training. 

Mr. HORN. Well, it is very helpful. 

Captain Cantfil, what can you say on the various commands you 

have been through? How serious did the commanding officer at 

some of your previous commands take total quality management? 

Captain CANTFIL. Well, like I said my first real experience is 

when I came in as the commanding officer myself, but I didn’t walk 

in blindly because you asked me, ‘‘Did I get training on my own 

or was it mandated?’’ And actually I initially got it on my own because the previous commanding officer had started the quality initiatives at Mayport to this point that by the time I had taken over 

Mayport it had won a quality award from the State of Florida. So 

clearly he had fully embraced the concepts and stuff. And I had 

hopefully slipped in behind it and continued the continuous improvement that we’re looking at. 

A lot of the premises in quality management have been 

PRECIPS of solid leadership, PRECIPS of really a long time ago. 

So I think the Navy really under—you heard Admiral Schriefer 

earlier this morning. I think it was really Admiral Kelso that fully 

embraced total quality leadership, is how we’re going to be doing 

business in the Navy. This is the methodology in which we’re going 

to adopt and embrace those ideas. 

And since Admiral Kelso started that, like I said initially, the 

training came into place. And they think that that’s really started 

to permeate all the commands as it goes along. Again, that’s a cultural thing. It’s a change and adjustment on how we’ve done business and stuff to date, but I think that’s clearly been looked at. 

I couldn’t have been as successful at Mayport as I was unless I 

had leadership above me that supported me. Clearly, the Rear Admiral that I reported to when I was there embraced that philosophy also, because it’s all synergistic, it’s all related. You really 

can’t do it out in a void and stuff like that. So it’s all part of a larger system. 

How quickly we came out of the shoot; I’m not really qualified 

to make a comment. I can tell you, though, that certainly in this 

269

decade, my experience has been that’s how we’re attacking issues 

and stuff as we go about it. 

I’m in a joint command now. And certainly the concepts of 

PRECIPS we followed at Naval Station Mayport that I was first exposed to, we embrace those and use those as we go about an operational command which is counternarcotics at this stage of the 

game. 

Mr. HORN. So when you were at Mayport and you inherited what 

a previous commanding officer had done, did you find some of your 

staff that you inherited also wanted to backtrack on the effort? Or 

did they take it seriously? 

Captain CANTFIL. No, absolutely. That was probably one of the 

most difficult aspects to the thing, because initially everybody is 

looking to queue from the new leader. There were clearly some that 

were giving what we used to call TQL, total quality lip service. 

They were really hoping to outlast the current commander. I mean 

how change is. 

Mr. HORN. Right. 

Captain CANTFIL. So one of the most difficult aspects of that 

transition, which we’ve shared our lessons strongly with our TQL 

office, and I know Dr. Doherty has shared them in many forums 

in the public and private sector, was the fact that you had to spend 

a very hard amount of time taking a look at how the organization 

is really structured; who is really participating in the quality management and who wasn’t. I had to spend a lot of adjustment time. 

Because actually my inexperience led me to believe as I took it on 

face value that we were fully committed to total quality, and actually I found out it was more my senior leadership and my middle 

management level that was really fighting the concepts and really 

paying the lip service, hoping to outweigh the previous commander 

before we came in. 

Mr. HORN. And did the previous commander brief you on what 

he had done and that is how you knew about at least a partial commitment of some of the staff? 

Captain CANTFIL. No, actually he said, ‘‘Hey, we won the award 

from the State of Florida, we’re good to go, don’t mess it up.’’ And 

that’s really about the way it unfolded. Probably about what I did 

to my relief. 

Mr. HORN. Yes, if you want your own flag, do it again. 

What did you do to get your middle management on board? 

Captain CANTFIL. Well, it just goes back again to you heard a lot 

of the testimony earlier. There’s nothing magical about anything 

that we’ve talked about here. Obviously, it starts at the top and 

leadership is a key and I could just talk about it. It has to be your 

behavior activity and things along those lines. If you’re talking 

team building, you’re talking training, you’re talking about all 

those specific issues and stuff like that, you have to embrace really 

what you’re taught in the quality management forums and training 

before you get there. 

A couple of things we did, again this is getting into the nitty-gritty, initially opened a quality academy. You’ve heard training. If you 

don’t train and you don’t embrace that, you can’t start anywhere. 

I was very suspicious because I had never really been exposed to 

total quality before I got to Mayport, is I need to get everybody on 

270

board with this concept. So we opened a quality academy. And everybody who came to the Naval Station, the entire tenure I was 

there, I’m sure it was continuing at this stage again, it doesn’t matter if you were a captain, a commander, the youngest airman or 

seaman or a new hiree from the civilian work force, you went the 

very first week you spent on board Naval Station Mayport, you 

went through the quality academy and the fundamentals of the 

TQL course. So you went and did that sort of thing. 

Mr. HORN. Was that 1 day or a whole week? 

Captain CANTFIL. No, actually it was 5 days. 

Mr. HORN. Five days. 

Captain CANTFIL. It was 5 work days. So we spent that. 

The quality academy established—you heard a lot about just-intime training. We spent a lot of time during that, also. For instance, when you built teams and you established teams and you 

charter teams, you absolutely had to provide training before they 

went there. And more specialized training, whether it was managing variation, whether it was team building. So when we went 

to charter a team, we placed people on that. If they hadn’t been 

trained before, they would go on and receive training 2 or 3 days 

right after they were chartered. So they would go on the team and 

be off into the running. 

But a large part of it again revolved around you know people 

watched me. I established the executive steering committee on the 

base, which was a cross functional team. That was a major decisionmaking body on the base. That was the No. 1 team we chartered. I forced all major policy decisions and resource decisions also 

into that body. That was met once a week. 

From that body, they organized quality management boards 

which looked at the critical processes throughout the base. They 

were, in turn, chartered to establish process action teams as they 

went along. 

So you heard about team building. Team building was crucial. I 

don’t share the one comment from the distinguished Representative 

from the State of Ohio who said, I believe it was him, said, hey, 

we didn’t go after tough decisions on teams. I found that when you 

had to do tough issues and quality management, that’s when you 

wanted to put your cross-functional teams on. If you weren’t willing 

to attack morale issues, if you weren’t willing to attack tough budgetary resource issues, it wasn’t going to work if you just picked the 

simple low hanging fruit. Those were good too initially as you dabble along. 

Again, I didn’t take anything from its infancy. I took an organization that was already going. So in order to make everything work 

you really had to pay attention to the signals and stuff that you 

gave out as a leader that you were fully embracing the principles 

and stuff that you were taught. Because if you didn’t follow them 

yourself, it didn’t make any difference. 

Mr. HORN. Now, in your new responsibility, I take it the deputy 

director on the Key West group, I have forgotten, remind me the 

name of the team down there, it was about 15 different agencies. 

Captain CANTFIL. Yes, sir, it’s very painful. 

Mr. HORN. I just wonder, how do you give a group like that the 

quality message? 

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Captain CANTFIL. It is no different. Culture are things changing. 

Had I not had my experience at Naval Station Mayport, I think I 

would have been ill-equipped as a deputy commander down there, 

because, as you said, now that you have a Naval culture, you have 

all four services, you have the Coast Guard, you have DEA, Customs, FBI. 

Mr. HORN. CIA. 

Captain CANTFIL [continuing]. CIA, the whole organizations. And 

so you have different cultures as seeing there. But there’s nothing 

that’s really dramatic about all this. Again, it starts at the top. If 

you get everybody in and you build teams—and you look at strategic planning is a key. The establishment of cross-functional 

teams are a key. The fact that you empower individuals to do these 

sort of things, and you bring everybody together and you’ve got to 

train them. If you don’t train first before you do any of this stuff, 

you might as well——

Mr. HORN. But when you did train them, you had a mission for 

them to carry out. It wasn’t just training where they could forget 

it and go back to work and go to their area and do whatever. 

Captain CANTFIL. Actually not. The teams again are very critical. 

Inside Mayport, every department, there were 27 departments that 

we had. If it was an intradepartmental effort, each department was 

told, you have a quality council and you need to build teams. That 

just really is established inside your individual director or department. 

So everybody who went to the initial training, fundamentals of 

TQL, as they got to the Naval Station at Mayport, then it went 

into—and their department, each of their department heads and directors there were told, inside your quality councils you need to establish some small teams. 

So as people come out of the training, they were given projects 

and stuff to work on. Some are very simple tasks as they went 

along as they go there. But that built the cadre so that when you 

got to these tough cross-functional issues you had a lot that was 

already there. And some experience already established. 

But despite the experience levels, you really had to provide training. And we spent a lot of time training. The executive steering 

committee once a year did a self-assessment and was provided—we 

spent money on outside facilitators and trainers that come in so we 

could take a hard look at what we were doing, how we were conducting business. 

Mr. HORN. Now, in dealing with the joint teams there, and you 

see sort of the representation of the cultures of various other agencies, services, whatever we want to call them, on a scale of 1 to 10, 

with 1 being nonevident and 10 being certitude, where would you 

put the Navy in that particular command of 15 different operations 

that you are now deputy director of? Where would you put the 

Navy in terms of total quality management and these other teams 

in terms of total quality management? Give it a 1, a 10, a 5, what? 

Captain CANTFIL. Mr. Chairman, I don’t know if I would break 

the Navy out specifically when you ask. Because we don’t actually 

look at the command as this is a Navy, and this is an Army, and 

the guy here is a Marine. And the teams again are built on the—

does a person have a piece of that process? I mean, does he have 

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a piece of the process, and should he be part of that quality action 

team or not? And again, I find that the individuals that we bring 

to the team. It’s really a function. Did they get the proper training 

before they were in there? We have a lot of really talented Naval 

officers and chief petty officers that handle the teams exceedingly 

well. 

I don’t actually notice any variance between the different groups 

if they’ve had prior training. It didn’t matter if they had Air Force 

training, Navy training, or any other agency training. If they had 

produced training and they were experienced and you reiterated 

that training, they have no trouble working on teams. 

Mr. HORN. Well, let’s take the civilian agencies only that you 

have to deal with. You mentioned the drug enforcement, the FBI, 

so forth. 

Captain CANTFIL. Right. 

Mr. HORN. To what degree do you think they have had some 

training in this area? Have they, the time they get to your level 

and that team level of——

Captain CANTFIL. My experience is they did not have the training. But I didn’t specifically ask them. So we made the assumption 

they didn’t have training. 

Mr. HORN. OK. 

Captain CANTFIL. So typically, when we needed to take a look at 

our own strategic plan, because we had representatives from DEA, 

because we had representatives from Customs and those services, 

we provided training to everybody, making the assumption at the 

baseline nobody had it. 

Mr. HORN. And when you put them to work on the processes, do 

you find you can get some action there from those since they are 

representatives of their agency, they aren’t in command of their 

agency? Or am I wrong on that? Have you got the key people in 

that region coming to those meetings? 

Captain CANTFIL. Well, we’re an outgrowth of the old Joint Task 

Group Four. And one of the reasons I think we went to the Joint 

Interagency Task Force was the fact that DOD used to be the one 

entity. DEA would be an entity, and this counternarcotics business, 

you had all these different agencies out there. And they came back 

to say, hey, really a wave of the future ought to be a joint interagency approach to the things. And there’s no reason why you can’t 

have civilian and military organizations blended together. 

I was not there when they had JATF Four. I have been told with 

people who have overlapped the two organizations, because, really, 

Joint Agency Task Force, or Jatafiest, is embryonic. It’s only been 

around a couple of years now, is that is a heck of a lot better, because embedded inside one organization are representatives from 

all the agencies that are involved in the drug wars as opposed to 

each of the agencies are separate and they interface on the exterior. So the fact that we have a true interagency with the people 

embedded inside the organization has been tremendous. 

As we’ve had each of the other countries come through who are 

basically collaborating with us and trying to be cooperative in this, 

and it’s really this scourge of drugs there, most of them are impressed that we have civilian agencies embedded with the military, 

and it works quite well. So I would say it’s a success story. 

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Mr. HORN. Good. 

General Boddie, in terms of your previous commands, how much 

was total quality management a factor as you worked your way up 

to Brigadier General? 

General BODDIE. Sure. Sir, since 1987, it’s been a big part of 

every one of my jobs and every one of my chain of commands. 

Mr. HORN. Where were you in 1987? 

General BODDIE. 1987, sir, I was commanding the largest ammo 

depot in the Army at McAlester, OK. 

That was when my commander a two-star gave me a copy of Mr. 

Deming’s book, Out of Crisis. I probably wouldn’t have read all the 

way through that, but the examples Mr. Deming used in the book 

were exactly how we were not doing it. So I thought I better read 

the book. And it had a major impact on me. It was a great opportunity to read that book when I was commanding an ammo plant. 

Mr. HORN. What was your rank at that time? 

General BODDIE. A full colonel, sir. 

Mr. HORN. A full colonel in a slot held for a higher officer, I take 

it. Or was it? 

General BODDIE. No. It was a colonel, sir. 

Mr. HORN. It was for a full colonel slot. 

General BODDIE. Then my next job was commandant of a school 

in TRADOC. And I had to go through a lot of the cultural change 

part of the TQM business, which is the toughest up-front part. 

Then I went back to where I had all the plants and depots under 

me. 

But the current job has really been an interesting experience, because I got there and the cultural change had been made. And so 

I had to learn what to do next. And very much like the Captain 

was talking about, I had an executive committee that met every 2 

weeks. I was always there to chair it or my civilian technical director. That constantly put the emphasis from the command on TQM. 

When we started the training business, I had all my supervisors 

go through 31⁄2 days of training. I exported the training into the installation. But I reserved the last hour and a half of the training 

to personally pass out the graduation certificates and to share my 

personal views on total quality management. And I did that with 

the deputy commander filled in a couple of times when I was not 

there, but made every one of those. 

And then we had every employee go through 21⁄2 days of training 

that we brought in. And I also went and did the graduation for 

them. However, that was a little more frequent, and it was myself, 

the deputy and the chief of staff that did it. But again to put the 

emphasis from the command because you are in that spotlight. 

But I would like to share what it did for us. I think partly the 

downsizing that we’re going through I had a choice, we could fight 

with my four unions over cutting spaces, or I could have them sit 

at the table to help us figure out how to run the organization and 

solve the problem. It was much better to have them sit at the table 

and help me. The command was cut from 1990 until today, 34 percent or over 1,700 people. And I cut the headquarters by 62 percent. But the good news is in that whole process, I’ve returned over 

$30 million to my customers through reduced rates just by improved processes. 

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Let me just share one last thought with you. I have a different 

definition of TQM. I call it to do the right thing, do it right the first 

time, continuously improve focusing on the customer. 

We also found out some of the things we were not doing were not 

the right things. We found that in some cases other services were 

doing it, doing it better than us, or private industry was. Well, we 

quit doing those things. And that all helped us meet the 

downsizing requirements that we had. And—but it took a focus—

every one of my development programs is done with an integrated 

product team. Chartered, sign charter, and it sounds like a lot of 

work from the top. But one of the advantages, when I was high 

ranking visitors, I had the Assistant Secretary for Research and 

Development, Mr. Decker, in; I had the Secretary of the Air Force 

in; I did not have to prebrief the briefing. Those teams are so empowered and they’re so proud of what they do, I don’t need to see 

what they’re going to say. I might need to share with them some 

political things that I might know about their program that they 

need to be incorporated in, but I save a lot of time by that empowerment. 

Mr. HORN. Let me ask you, a good part of your laboratories have 

civilian personnel I assume. 

General BODDIE. It’s mostly civilian, sir. 

Mr. HORN. And they have a fairly high level of education, I 

would think. 

General BODDIE. Yes, sir. But I also have an installation to run 

where I have the blue collar workers, also. 

Mr. HORN. Yes. Do you find any differences between the eagerness of each group to move forward in a total quality management 

approach between the blue collar and the fairly highly educated 

laboratory people? What has been the difference and experiences? 

General BODDIE. The blue collar, sir, are so eager to go out and 

really play a bigger part, a bigger role in what they do. They’re almost more eager than the scientist and engineer. They’ve been 

hungry for this sort of change a little bit more than the scientist 

and engineer who is often sort of empowered in his own way anyway. So I would say just from my R&D center, the blue collar 

worker is very eager for this. 

Mr. HORN. Very good. 

Let me ask a few closing questions here so we won’t keep you 

all night. In view of the huge cost and time required to train a TQ 

professional, as well as the high turnover rate in some areas and 

the lack of a TQ career path, it would appear to be a great advantage to outsource TQ training to high qualified professionals. 

Would that not both reduce the cost and enhance effectiveness of 

the effort or would that simply mean there wouldn’t be an effort? 

I would just be curious what you feel on that. 

Mr. COOKE. We use a number of high cost professionals in our 

training. And they’re really good. They come very, very high; I’m 

talking several thousand dollars a day. But Anne, do you——

Ms. O’CONNOR. It varies across the department. On the OSD 

staff, we’ve outsourced all training and facilitation. And we’ve done 

that for a couple of reasons. We have very, very senior people that 

we’re dealing with and we need to bring in folks that have cutting 

edge experience and actually worked directly with Dr. Deming. And 

275

we have done that over time. So that’s one of the reasons we do 

it. 

The second reason we do it is you know there’s that old saying 

about, you know, if you come from more than 100 miles away and 

you carry a briefcase, you’re an expert, and a prophet in our own 

land is never heeded. So that helps quite a bit, too. 

But in different situations it’s handy to have different types of 

setups. For example, overseas you won’t necessarily find people to 

outsource this with. So you really do need to have that expertise 

in-house. 

The other thing is it is important for us to maintain a level of 

expertise inside the department on this, because I remember the 

first time we were listening to a contractor’s pitch on quality management, he gave his spiel, he left and the boss said, ‘‘Well, what 

do you all think?’’ And I said, ‘‘The only problem with this is we 

don’t know what we’re doing.’’ So how do we know if he knows 

what he’s doing? So we decided to keep that in-house, because we 

just had a more comfortable feeling that the tax dollars were going 

to be better spent if we embedded it personally. 

In many of our operations, as General Boddie alluded to, the 

commanders play a key role in a lot of this training, too. And we 

have situations where the supervisors train subordinates. And that 

again, there’s no faster way, as I’m sure you know, to get familiar 

with material, that they have to teach it. So this really helps perpetuate the learning inside of the Department of Defense. So in 

certain cases, we outsource it; in certain cases, we keep it in-house, 

and that’s really kind of a commanders prerogative to make that 

call. 

Mr. HORN. Let me ask you, Ms. O’Connor, you came to the Pentagon under, what, Secretary of Defense? 

Ms. O’CONNOR. Oh. 

Mr. HORN. Dr. Cooke could answer that. 

Ms. O’CONNOR. He’s got a lot more than I do. It would be Secretary Carlucci. 

Mr. HORN. OK. 

In the annual commander’s meeting that the Secretary has with 

the key commanders around the world, in any of those Secretaries 

you have served with, did they ever mention their concern and 

their commitment to total quality management? Did any of them 

ever mention that? 

Ms. O’CONNOR. Commanders in the field? 

Mr. HORN. Did any Secretary of Defense ever mention it to commanders in the field in his annual meeting? There is an annual 

meeting where the Secretary usually meets with them, as I remember, over the years, unless they have stopped that, and the Secretary runs around the world on a plane enough. Did anyone ever 

make a personal commitment at the Secretary’s level? 

Ms. O’CONNOR. At that time, when I came to the Pentagon, I 

worked under the ANT infrastructure when we had quality in ANT 

and I moved over. So that would have been Secretary Aspin when 

I moved over. 

There’s a lot of information that goes up to the Secretary about 

this. And the Secretary has put out policy letters and is there 

whenever we ask him to be there, frankly, for anything we ask him 

276

to do with regard to quality management to show his support. But 

with regard to that particular meeting, sir, I just don’t know. 

Mr. HORN. OK. 

Mr. COOKE. I can show you, though, starting with Frank Carlucci, because that’s when Anne came, a memo to the building, 

signed by Frank Carlucci and taken up through John Doyte, John 

White, Bill Perry right now. 

Mr. HORN. OK. 

Mr. COOKE. So to that extent, in written communications, they’ve 

strongly supported it. 

Mr. HORN. Getting back to what I mentioned on promotions, but 

putting it another way, it is generally considered essential that systems be established to reward leaders who were successful in creating a total quality culture. What have the various services done 

to recognize those who have led this effort successfully? I got a feel 

from one service. Why don’t we ask the Air Force now. 

Mr. KAUVAR. Let me elaborate on what Colonel Sawner said who 

told you that there is, in fact, on a promotion form, a specific recommendation for that. I want to tell you that the enlisted force is 

equally crucial to our success in quality management, because most 

of the force is enlisted. That’s where most of the adjusting time 

training takes place and where most of the teams are comprised. 

Last week we got the promotions for staff sergeant and technical 

sergeant, and the career field foreman power and quality got more 

than the average share of promotions. 

I can also just tell you anecdotally some information that you 

will probably find interesting. At the outbreak of Desert Shield in, 

what was it called, in the mobility commander, mobility command, 

Four-Star Commander General H.T. Johnson had scheduled 2 days 

of senior level quality training for his leadership. And they went 

through with it. The people that I worked for the most directly, 

General Handy, who is a director of programs and evaluation, and 

Assistant Vice Chief Three-Star General Newton were both promoted this year. And they were among the leaders in the quality 

changes that I described to you earlier in my report. Brigadier General Quarter, whose installation won the Installation Experience 

Award for the last 2 years, was just given a new assignment as the 

XP in Air Force Materiel Command. And of course in that he will 

be in charge of quality for the entire command. So I think we do 

have a record here. 

Mr. HORN. Translate those initials you gave me. XP, was it? 

Mr. KAUVAR. Yes, that’s the director of programs. And that’s 

where the quality function is lodged in the Air Force. So he’s gone 

from running an installation with a superb quality program to taking over the program for the whole command. 

Mr. HORN. So you say in the enlisted promotion also, you called 

it what, manpower end quality? 

Mr. KAUVAR. Manpower end power. It’s a combined career field 

now. 

Mr. HORN. And what does the manpower group do? Is that the 

personnel people? 

Mr. KAUVAR. No. Personnel is separate. Manpower is authorizations and personnel is individuals. But the manpower people have 

always been responsible for process reengineering in the Air Force. 

277

Mr. HORN. Yes. Because I would worry if it is the personnel people. Based on the civilian sector, I find they sometimes fight these 

proposals, so I am curious in what the manpower slot does in the 

Air Force. Pardon my ignorance, but I am not quite clear on it. 

Mr. KAUVAR. It is the management of manpower resources and 

authorizations, as opposed to individuals, that is a determination 

of what is the requirement for manpower at a particular location 

or for a particular function. 

Mr. HORN. So these people operate at a higher command level 

than the ordinary personnel would be. 

Mr. KAUVAR. No, you will find them at the wing level and the 

center level as well. 

Mr. HORN. I will have to get familiar with it. If you can send me 

something over on that, it is whatever the description is in the Air 

Force. 

Mr. KAUVAR. Absolutely. 

Mr. HORN. General Boddie, do you want to say anything else on 

this subject, in terms of the incentive systems? 

General BODDIE. No, sir. 

Mr. HORN. If it isn’t promotion, what is it? 

General BODDIE. The Army has been very good to me. It is a 

privilege and honor to serve as a general officer, and I think my 

report cards have had mention of total quality management in 

them, for the last number of them; and they got me promoted to 

Brigadier General, which is way past what I ever thought I would 

do. 

Mr. HORN. Captain Cantfil. 

Captain CANTFIL. I can only put in a personal sense. When I was 

the commanding officer of the naval station, those who were superpractitioners of quality management were my top-graded people 

that I personally graded. 

Mr. HORN. Colonel Sawner. 

Lieutenant Colonel SAWNER. The other thing that is a major motivation, besides the potential for promotion, which is a little different in the Air National Guard, is several different witnesses 

have spoken of the opportunity to change something, to make a difference, to improve it and actually see it happen; and that is a 

huge reward system. I think that goes across the board. 

Mr. HORN. I think you are right on that. 

Let me close with a couple questions to both the IRS and DOD. 

What should Congress do, if anything, to encourage more widespread application of quality principles throughout the Federal 

Government? Mr. Carroll, do you have any thoughts on that? 

Mr. CARROLL. I hesitate to give you any advice, other than I 

think that hearings like this, keeping these kinds of things on the 

table, is an important issue. Because, as I mentioned earlier, agencies, particularly agencies like Internal Revenue, have the possibility of being insular in their view about what is going on; and the 

more that we can get advice and guidance and other views presented to us, I think that what we are finding is that is of value 

to us. 

Mr. HORN. OK. Any suggestions from the military panel on what 

Congress might do, if anything, to get this further spread throughout the executive branch? 

278

Mr. COOKE. I can hardly improve on Mr. Carroll’s answer. 

Mr. HORN. Anybody else have a comment on this? Don’t let Mr. 

Cooke shut off all the discussion. 

Mr. KAUVAR. Let me try one suggestion for you, sir. The Congress took a great step forward with the Government Performance 

and Results Act; and although the implementation of GPRA has 

been different among the different agencies in Government, I think 

that moves the whole process in the right direction. The more support we can get for GPRA, I think you will find the more support 

you will have for quality management as well. 

Mr. HORN. I think you are right on that. There is a close interrelationship here. 

One last thing. You have heard from every panel today and I 

heard from dozens of panels before today, before I came to Congress and while I have been here, that one of the great problems 

any person that wants to accomplish something in this area faces 

is the so-called culture of a particular institution. And, I guess, how 

would you encourage workers to embrace change? Do any of you 

have ready experiences where you felt some reluctance in the start 

and what did you do now since you are the operators over here in 

uniform. 

Tell me what happened. What is the key? What would you advise, if you had 5 minutes to talk to your successor—after going 

through doing the job in a particular command, what would you 

tell your successor that he ought to watch out for if he is getting 

a new part of the operation that has been untouched by total quality management? 

Colonel Sawner, do you want to start that? It is like the Supreme 

Court. We start with the newest justice. 

Lieutenant Colonel SAWNER. Yes, sir. 

Sir, what I would say is the senior leadership, as I mentioned, 

but, to elaborate, everyone has talked about some kind of executive 

council—well, just having a council doesn’t make any difference. 

The council must do something. They must charter teams. They 

must sanction the training. They must support this within the organization. 

Now what happens, in my experience, is what the teams accomplish is much less important than the process which becomes, in 

effect, an adult experiential learning process for the council as well 

as for the members of the team. So if you don’t model that and put 

the process in action in your organization, you are never going to 

embed it; and you will end up doing quality, not improving what 

you do. 

Mr. HORN. Captain Cantfil. 

Captain CANTFIL. I don’t think you can really improve too much 

upon the fact senior leadership is always the key. It is not just 

words. It is your behavior. We have heard enough examples of that. 

Clearly, the only constant is change. My relief, when he took 

over, they said, I found that quality management principles and 

methodologies is the way I could manage change; and I thought 

that was the best way to go. So if you embrace those things 

through your actions and words, you will get the job done right. 

Mr. HORN. General Boddie. 

279

General BODDIE. I go along with the same thing, walk the walk, 

but I think you really have to work hard in the communications 

business. I have breakfasts with the boss, breakfasts with the old 

man, open line TP call-in questions. Because the biggest part of the 

cultural change piece is to communicate, and let’s see the work 

force understand you are serious. 

But I would also say, once you have done that, it would be hard 

for a commander to come in and change it. Because once the people 

have tasted empowerment and the things, the way we do business 

in total quality management, it would be more difficult to bring 

them back to the old way than it was to turn them around to the 

new way. 

Mr. HORN. I think you are right in the mixed civilian military 

operation that you had, but if you were in an exclusively combat 

arm of the military, do you think if a new officer came in that 

wasn’t quite a believer in total quality management and would just 

like giving orders, that they wouldn’t respond to that and go along 

with it and say this, too, shall pass? 

General BODDIE. They would have to respond, but I think they 

would change the new commander over time. I think people are 

people whether they are wearing a green suit or civilian coat and 

tie or blue jeans or whatever. I don’t think it makes that much difference. 

Mr. HORN. Dr. Kauvar, have you got anything to add to this situation in this particular question? 

Mr. KAUVAR. I think it is a matter of just saying yes. 

Mr. HORN. Ms. O’Connor. 

Ms. O’CONNOR. I would just like to expand upon what General 

Boddie said. 

When we face a lot of change in the Department, when we have 

gone out to the field units and talked to them, communication is 

the key. Because the folks that work in the organization are convinced that the boss knows something and he is just not telling and 

most of the time the boss really doesn’t know all that much more 

about the changes coming at them than the workers do, so we encourage everyone to keep the open lines of communication. 

Those lunches with the boss are a fabulous, informal way to get 

information to the employees and also for the boss to get information back up. Because it is always amazing, the sort of things you 

hear from the work force when you are sitting in an informal setting. 

Mr. HORN. Mr. Cooke. 

Mr. COOKE. I share that observation. I think most people in uniform, civilian, in Defense, in Government or not, want to do a good 

job. They really want to come home at night and be satisfied with 

the work they have accomplished. I think TQM helps supply that 

job satisfaction if it is carried out. 

What you do thunders so loudly I cannot hear what you say to 

the contrary. I forget the name of the poet. That is to say the leader, if he is serious about it, has to act, not just talk. Communications is a physical act, not just a verbal, if you will. 

We have demonstrated here that we are serious. We may not 

have all the information you have asked for—we are going to try 

to provide most of it, Mr. Chairman—but we do take quality manVerDate Jan 31 2003 10:13 Apr 02, 2003 Jkt 085676 PO 00000 Frm 00283 Fmt 6633 Sfmt 6602 W:\DISC\45403 45403
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agement and defense seriously, and we do invest a considerable 

amount of time, time well spent, I will say, on implementing and 

carrying it out. 

Mr. HORN. Mr. Carroll, we are going to give the tax collector the 

last word. 

Mr. CARROLL. Thank you. That doesn’t happen very often. 

The change is all about resistance and comfort, and we have to 

make it more comfortable to change than it is to stay the way we 

are. It is a hard thing to do; but, until we do that, people are going 

to be continuing to resist. 

Mr. HORN. We thank you all for coming. Sorry to keep you so 

late, but it has been very instructive. I suspect when the hearing 

is published it will be a best seller. Since it is free, it will probably 

run the budget up of this committee. 

Thank you all for coming. This hearing is adjourned. 

Oh, wait, on the staff list, I need to say thank you to—and we 

have it here somewhere. Let me say, before we have adjourned, 

that we want to thank the following people. 

Russell George, staff director and chief counsel, in the Government Management, Information, and Technology Subcommittee; 

Matt Ryan to my left, the professional staff member who put the 

hearing together; John Hynes, professional staff member; Andrea 

Miller, clerk; Mark Stephenson, professional staff member of the 

minority; Jean Gosa, clerk; and interns, Michael Presicci and Melissa Holder; and the court reporters, that is Katrina Wright and 

Vicki Stallsworth. 

[Whereupon, at 5:01 p.m., the subcommittee was adjourned.

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