The Successful Introduction of QM in Hilton, Abu Dhabi - Case Study Example

Table of Contents  Section1  1.1 Quality Management Frameworks and their Business Advantage 1.2 Quality Management Frameworks 1.2 Advantages of Quality Frameworks on Hospitality business Section 2  2.1 Implementation of EFQM at Hilton, Abu Dhabi  2.2 Application of EFQM at Hilton Hotel Abu Dhabi  2.2.1 Application of EFQM to increase Customer Focus  2.2.2 Application of EFQM on Performance management   2.2.3 EFQM focus on Employee Training  2.2.4 EFQM focus on Employee satisfaction  2.2.5 EFQM focus on Process Management  2.2.6 EFQM on Quality Control   Section 3  3.1 Introduction of Six Sigma and application of Six Sigma Quality Management at the Hilton Hotel, Abudhabi  3.2 Hilton Hotels and Six Sigma  3.2.1 Optimized Reservation services 3.2.2 Housekeeping Services 3.2.3 Front Office Services   3.3 Concerns of Implementing Six Sigma In Hilton Hotel, AbuDhabi  4.0 Conclusion  5.0 References  Section1  1.0 Quality Management Frameworks and their Business Advantage Experts have defined Hospitality industry as the provision of Food and Beverages and Accommodation to satisfy the needs of those who are away from home. It covers the supply of entertainment, leisure, travel, distribution channels and transportation in the context of travel, as well. The hospitality industry has two sides to it: Those who supply the accommodation, products and services and those who avail of these. It is the largest provider of employment per unit of money spent. The money circulates among more people in this industry as a chain effect. Besides creating direct employment in the Hotel and catering segments, it creates demand for several products like food, beverages, flowers, transport service, furniture, furnishings etc. etc. The industry is highly labour intensive. By meeting the needs of those away from home, the industry fills a need of the traveling public for accommodation, food and beverages. Since each service or supply input into the Hospitality industry is by itself an industry or service process, there is an initial difficulty in homogenizing the work culture in all these associated organizations before the Industry can implement the TQM policy. But once this obstacle is overcome, it proceeds at a much faster pace than in other industries, because now every one involved stands to gain from the policy and is equally committed.  Quality Management is a philosophy and frameworks set as guiding principles by which the organization lives by, in order to achieve the best possible results for all its clients and stake holders. Quality is critical in the competitive global business atmosphere. Therefore it is imperative for Organizations, especially hospitality organizations to strive for the best possible quality in its products, services and internal processes. Quality management offers a number of frameworks for adoption – these framework models are utilized to integrate better management practices. Some of the most quality frameworks are – the Malcom Baldrige National Quality framework, ISO 9000, European Foundation for Quality Management and the Australian Business Framework. These models have set standards that are employed by organization around the world and often serve as a comparison and evaluation of quality standards in organizations. These models are also helpful in developing a proper and effective quality management system and cover a wide range of activities. These frameworks have been highly suitable for the hospitality industry where standards of quality are significant for competing and surviving in the industry. 1.2 Quality Management Frameworks This section will briefly discuss each of these four quality frameworks. (Hendricks & Singhal, 1996) Malcom framework - The Malcom framework promotes the management to increase awareness to performance excellence. The framework lays importance towards implementing methods of performance measurement for employees for continuous improvement. This framework helps in strengthening competitiveness by improving personal performances, integrating better practices to be followed by employees, train and enhance employee abilities, share information upon the issue of managing and understanding performances in an organization. Successful application of this framework results in better service delivery to customers and improved organizational effectives coupled with personal training. ISO 9000 - The ISO 9000 quality standard are related to QMS and are designed in such a manner to help organizations to meet customer demands. The ISO 9000 standard is in the form of a business policy for the management and is linked to the marketing plan of the company and all the employees are required to follow the guidelines laid down in the organization ISO 9000 policy frameworks. Unlike the Malcom frameworks, which are concentrated around employee performance measurement and enhancement, ISO 9000 records the organizational performance as a whole and compares it regular audition and evaluation. Proper recording of procurement of materials, service levels based on customer feedbacks and inquiries, orders, is done in this system. This recorded data is used during the stages of development of business plans and marketing strategies. This ISO 9000 is basically a review performance system for an organization though keeping records, regular internal audits and meetings. EFQM - The eight fundamental concepts of EFQM model are to achieve balanced results, add long term value for customers, effective leadership, integrity and vision for the company management, use of efficient processes in daily management, building long and sustainable partnerships with customers and staff, wide spread use of fact based decision making and promoting creativity and innovation in the organization. EFQM offers support for networking and shared learning within an organization, offers training and world class education to employees, identify and reward achievements and promotes best available methods and tools. The main concept of this model is that excellence in a system is not theoretical, but it is a tangible form which can be achieved and maintained in the long term to help the growth of an organization. Australian Business Excellence - The Australian Business Excellence for quality management coves seven categories – like promoting leadership qualities, specific focus on personalized services to customers, efficient business strategy, integration of information management system for process improvement and innovation. The Australian Business Excellence Framework illustrate the values and practices of high performing organizations and include combined logical principals and business understanding congregated over a span of 15 years. It helps to calculate existing performance and long-term success. The framework stresses upon improvement in management and leadership styles, assessment of these management and leadership styles, and benchmark where the organization stands in terms of competitors. 1.2 Advantages of Quality Frameworks on Hospitality business Many hotels and other hospitality organizations have enthusiastically gone ahead and adopted various frameworks of Quality management, because of the advantages they are gaining from adopting QM frameworks, (George, 1994). The adoption of these Quality management frameworks into the business enhances competitiveness and profitability, besides raising customer satisfaction level, (Bretier, and Bloomquist, 1998). It streamlines operations, reduces waste and provides the management with a control mechanism that ensures consistent good performance.  The basic advantages of deploying the above mentioned frameworks within a hospitality organization are:   • Increased Customer focus, to ensure high level of customer satisfaction  • Continuous improvement, with the involvement of every staff member, with due recognition being accorded to the contribution of each one • Value for individuals, thus raising the over-all morale of the Hotel as a whole  • continuously determine whether the Hotel’s products and services match customer needs.  • Ensure pre-delivery verification of products for quality, before actual delivery to customers  • Quality control at production stage as well as at procurement of raw materials.  • Set up quality screening of supplies by the vendors/suppliers by themselves before delivery to the Hotel. (Goetsch, and Stanley, 1995).  Section 2  2.1 Implementation of EFQM at Hilton, Abu Dhabi  An important aspect of the improvement in organizational efficiency brought about at the Hilton, Abu Dhabi has been the implementation of quality management in the Hotel. In view of this complexity, the management identified EFQM as the best option available to enhance customer satisfaction, organizational efficiency, and competitiveness. Very few Hotels had till then implemented this quality management framework; however with a number of successful cases in Europe, the management was confident that EFQM would add benefit to the hotel business.   The implementation of EFQM at Hilton, Abu Dhabi involved the top Management, the Quality Department, training wing, design of products and services, process management, collection and dissemination of quality data and analyzing these for appropriate follow up action. In order to implement EFQM at Hilton, some changes at Hilton were carried on like setting of a quality control department, which would set goals and integrate these goals into the business plan for the existing financial year of the hotel.  This department also ensures that in order to meet these goals, proper training of employees as per required quality standards is taken up by the management at regular intervals. Also, holding periodic reviews and meetings on how well the system has adapted itself to EFQM and how well the objectives are being met by the staff and management. 2.2 Application of EFQM at Hilton Hotel Abu Dhabi  EFQM as identified by the Hilton hotel management is more than just a quality system. It is a complete business model framework which is run with the help of five basic criterions – leadership, optimized process management, HR management, efficient policies and long term client partnerships. The results of implementing EFQM identified by the hotel management are increased client satisfaction, employee satisfaction, higher profits and social relations. The management has to bring about a huge change in the processes, objectives, measurement criterion, improvement process and targets. Each department was required to take on self assessment audits to assess and improve their system performance. One of the main features of EFQM implemented at Hilton in order to bring total business enhancement was employee development. Enhancing employee capabilities would ultimately create a better customer experience and understanding. The management has been quick to point out key problems and identifying opportunities that may arise from these problems. The Hotel manager. Hilton Abu Dhabi stated his views that there was clear proof of a positive effect of employing EFQM model at Hilton. Advantages have been obtained on ever front – client, employees, trading partners like suppliers and investors, and the society. 2.2.1 Application of EFQM to increase Customer Focus  Along with streamlining the internal processes of Hilton hotel for dealing with customer grievances, Hilton Customers were also involved into the process by the management and were required to provide feedback and were encouraged to put forth their queries. The achievements of employees in minimizing or eliminating complaints or proactive solution of complaints or through preventive action, were duly recognized. This initiative has been replicated across the Hilton Chain, with very good results. Customer surveys, Advisory panels and personal interviews were used by Hilton to measure customer satisfaction are some of the examples of EFQM implementation. Involvement of regular customers in the Advisory Panels helped greatly in getting a clear perception of customer side perception of the Hotel’s working, (Cho, Woods, Jang, & Erdem, 2006).  2.2.2 Application of EFQM on Performance management   Implementation of EFQM in Hilton, Abu Dhabi was done through extensive and intensive training of all its personnel and securing their wiling commitment to a Quality culture. Vertical communication from bottom up was encouraged and sustained. Appraisal system and focus groups provided further feedback to the Management on employee level assessment of problems and their inputs for solving them. Reward system was revamped to link rewards to achievement and maintenance of excellence in service, (Moeller, 2006). As a result, the employee self esteem and sense of belonging to the Hilton went up. In addition to recognizing individual excellence, the achievements or impacts of teams were also recognized and this ensured that individual excellence was not pursued at the cost of team effectiveness.  2.2.3 EFQM focus on Employee Training  The focus on training staff is on the quality aspect. There are dozens of training on quality related topics, including empowerment. Another area stressed is the team training approach and a Kaizen like stress on continuous improvement of quality, (Moeller, 2006). There is lateral transfer of learning among employee teams which undergo training and their peers. Each Department was encouraged to develop and declare their own Vision and Mission statements. Department Managers and their teams owned the responsibility for creating and maintaining the Quality commitment at the work place.  2.2.4 EFQM focus on Employee satisfaction  Performance appraisal and reward system having been linked directly to Quality enhancement parameters at Hilton, Abu Dhabi and as a result, the employee satisfaction level has gone up significantly. Besides the tangible rewards they gain, there is also the intangible sense of being part of an achievement system that is enabling and giving scope for genuine pride to the employees, ((Moeller, 2006). The regularity with which tokens of appreciation like Merit certificates, Tickets to entertainment shows, Gift Certificates, appreciation notes etc are handed out further maintains the atmosphere of continuous growth in quality of Hilton hotel.  2.2.5 EFQM focus on Process Management  All processes of the Hilton Hotel were on continuous review for scope of adding value or customer satisfaction elements, work centre methods were upgraded, and operator controlled processes where scope for improvement of results or reduction in costs were possible, were identified and acted upon. Process flows were scrutinized for improving the process design to achieve optimum results. Decision making was shifted from episode one to data based and predictable pattern.  Apart from the general shift towards ensuring customer satisfaction, proactive steps were initiated by the Hilton managers to ascertain customer responses through direct interaction, Customer surveys, and panel discussions at the level of Advisory Panels. These direct initiatives paid off good dividends and gave plenty of scope for suo moto action by the Hotel to fine tune response to customer needs, (Evans, James and Lindsay, 1999). In addition, these helped in revising inventory control practices and ensured timely availability of supplies in right quantity at right time. Concurrent sharing of inventory data with the suppliers/vendors of Hilton enabled better supply chain management with the suppliers etc. Over all, these changes contributed to better financial results.  3.2.1 EFQM on Quality Control   Utilizing EFQM has helped to measure the quality control with the help of statistical methods. This facilitates comparison of different processes and operations that are a part of the Hilton Hotel Service. Such comparison will facilitate the Hilton management to take corrective action where deviations from expected quality standards are noticed, and also prevent recurrence of such cases.  Section 3  3.1 Introduction of Six Sigma and application of Six Sigma Quality Management at the Hilton Hotel, Abudhabi  Ever since Bill Smith of Nokia, advanced the concept of Six Sigma in 1986, the concept has undergone several revisions in its definition. It was called”a program aimed at the near elimination of defects from every product, process or transaction”. Two years later, the definition was revised and six sigma was defined as a premeditated initiative to improve productivity, augment market share and develop higher client contentment, with the help of statistical tools that can lead to break through quantum gains in product or service quality. Drawing from their experience of Consulting on Six Sigma in numerous cases, Experts have come to the conclusion that Six Sigma represents a new paradigm shift in Innovative Management for a company to survive in the 21st Century, (Ying Shiau, 2005.)  Six Sigma as a management tool has three implications namely Statistical measurement, Management strategy and Quality Culture. Six Sigma assists the management to verify the consistency of good quality of a company’s products, services and business processes. This is achieved through Statistical tools for measurement of Quality levels. This innovation has the involvement of all levels of the company from top Management down and ensures commitment to total satisfaction of the customers. Also, it implies a culture of total quality in the company. Those aspects which are critical-to-quality are closely monitored, leading to the high popularity of this system. Six Sigma has also proved to be a good substitute for Quality Control practices like TQC, TQM and others, popular earlier, are sought to be replaced by this newer method, (Cook, and Velma, 2002). Frustrations at not being able to effectively implement TQC or TQM have made Six Sigma attractive to the concerned companies. It is considered as an approach that is more systematic and scientific, since it integrates customer, process, personnel and policy strategy.  3.2 Hilton Hotels and Six Sigma  As owners of various international properties in the hotel industry, Hilton Hotels is a fit candidate to follow the example of Jack Welch from General Electric Co. and effect significant changes in the way their hotels perform. Effective application of Six Sigma can help the Hilton Hotel management to target around 15% increase in revenue over the coming five years, (Ying Shiau, 2005.). Six Sigma earns its name from the strict criterion of 3.4 errors/failures per million transactions. In the case of Hilton, reckoning its current customer strength, it would translate to not more than ten dis-satisfied customers in a year globally at each of their Hotels, from the top end to the budget range hotels. At Hilton, the immediate priority is to find out the relevance of existing work processes and practices. For example, there scope to determine whether existing industry practices and those in the Chain are essential for achieving customer satisfaction of the first order, and effect changes wherever necessary, (Spencer, 2007 ).  The Benefits of Six Sigma Application in Hilton Hotels –  3.2.1 Optimized Reservation services –  Reservation systems can receive a re-look to see how resources already available in the Hotels can be best utilized through innovative approaches to the Reservation process. For example, idle capacity in the SPA or massage therapy services can be offered as up-sell items at discounted prices, thus converting losses into revenue. Among other proposed benefits with the implementation of six sigma quality management is at the reservation systems could be improved. Offering free or discounted spa related services like message therapies and personalized customer treatment during reservations to customers, will definitely be beneficial in the long run to the hotel company. This will also help the visitors to mix and enjoy during these friendly sessions, which also increases client satisfaction.  3.2.2 Housekeeping Services –  The focus in some other Six Sigma Projects may be on house keeping or service process, while it may be on the laundry department or transportation or just about any of the aspects of the business, (Merdekah, 2005-6). Application of Six Sigma in Housekeeping at Hilton, Abu dhabhi, can focus around - trimming down of the turnaround time of preparing a room for a new customer and standardization of hygiene across areas, rooms, departments of Hilton Hotel.  3.2.3 Front Office Services –  In the case of Front Office, Six sigma can notably assist in enhancing the Productivity levels and reducing costs significantly.  1. decrease the wait time for the customers during peak check-in and check out hours  2. get rid of billing faults and develop accuracy in cash dealings  3. increase room occupancy  4. best possible utilization of the current rooms and services to boost profit  5. provide better services to customer delight at hotel clubs  6. Reduce/eliminate any form of loss calls in the Operators section  7. provide and retain information with accuracy  These efforts can be repeated at all the properties of the chain, with scope for generating new revenues and plugging recurring losses.  3.3 Concerns of Implementing Six Sigma In Hilton Hotel, AbuDhabi  Resist Change – it might be possible that the executives of Hilton Hotel who had been working in a particular environment and set of rules related to performance / quality might not like the change initiated by the Six Sigma principles of absolute quality and zero error. At this point it is necessary to educate them of the advantages of the Six-sigma system and the profits that can be obtained with its help.  Resist High Level Commitment – Six Sigma requires consistent dedication from the member of the Hilton Hotel. High level commitment levels might pose a concern in some employees who may tend to loose their interest in the Six Sigma system after a while. This may hamper the functioning of the Six Sigma implementation at Hilton, therefore its required to keep the motivation of the Hilton employees high.  High Cost and longer Time period - The increased cost of implementing six sigma concepts at such a large scale can pose a concern for the Hilton management. Since the results of six sigma take comparatively longer time period than other methods to show up, so the management might think it as a waste of time.  4.0 Conclusion  The introduction of QM in Hilton, Abu Dhabi has proved to be of high potential for enhancement of customer satisfaction, employee efficiency, corporate image and financial results. The Hotel and its Company have benefitted from introducing quality management framework – FEQM and it has proved as an opportunity to inculcate the culture of excellence among all the personnel and to revamp all processes to ensure continuous upgrading of customer experience and the resultant economic benefits as a reward for the efforts put in. By opting to implement the EFQM approach in enhancing value to customer and upgrading professionalism and self esteem of the personnel, and in the process strengthening the bottom line of the business, the Hilton Chain has done an important service to all service industries and the Hotel Industry in particular. First and foremost, this experience de-mystified EFQM in the eyes of service industries. It was for long held that methods like Statistical Quality Control, quality management frameworks and Six Sigma were meant only for nut and bolt industries where mass production occurred. It was argued that service organizations dealt with live human beings and could not be asked to adopt system based approaches in their operations and processes. In the case of the Hotel industry, it was further claimed that it was a maze of myriad processes and could not be fitted into one system. However, with the successful implementation of EFQM, perceptions in the hospitality industry have changed.  5.0 References  1. Bretier, D., Bloomquist, P. (1998), "TQM in American hotels", The Cornell Hotel & Restaurant Administration Quarterly, Vol. 39 No.1, pp.26-33.  2. Cho, S., Woods, R.H., Jang, S., & Erdem, M. (2006). Measuring the Impact of Human Resource Management Practices on Hospitality Firms' Performances, pp 262-77  3. L. S. Cook, R. Velma, Exploring the linkages between quality systems, service quality, and performance excellence: Service providers' perspectives, 2002 , pp 44-56  4. Evans, James R., and William M. Lindsay. The Management and Control of Quality. 4th ed. Cincinnati: South-Western, 1999  6. Goetsch, David L., and Stanley Davis. Implementing Total Quality. Upper Saddle River, N.J.: Prentice-Hall, 1995  7. George, S, Total Quality Management: Strategies and Techniques Proven at Today's Most Successful Companies, John Wiley & Son 1994  8. Moeller J. The EFQM Excellence Model. German experiences with the EFQM approach in health care. Int J Qual Heatlh Care 2001; 13: 45–49 10. K. Hendricks & V. Singhal, Quality Awards and the Market Value of the Firm: An Empirical Investigation, Georgia Tech, Management Science , Vol. 42, No. 3. March 1996, pp. 415-436.  11. Brown, J. R., & Dev, C. S. (2000). Improving productivity in a service business: Evidence from the hotel industry. Journal of Service Research, 2(4), 339-354.  12. Ying Shiau, Measuring Benefits of Six Sigma at Starwood, Six Sigma Conference: Service and Transactional Environments, Scottsdale, AZ, 2005.  13. Merdekah Ybanez-Delid, “A Six Sigma Experience,” June 24, 2005, www.sixsig.info/six-sigma/date/2005/06/.  14. Spencer E. Ante, “Six Sigma Kick-Starts Starwood,” Business Week, August 2007 Read More