I am employed for Qatar Technical Inspection Co (QTIC), a 140 employee company. It is a share holding company, classified as medium size in Qatar market, earned a monopoly contract with Qatar Ministry of Interior (Traffic Department) in Feb 2003 for ten years.
The contract is to conduct technical inspection for all types of vehicles. This serves as a mandatory requirement for road permit renewal annually. QTIC is the only company in the country authorized to perform this type of vehicle inspection services. The company is inspecting an average of 1,000 vehicles a day.
QTIC production is manpower hour. Company resources are namely, the main premises for inspection consisting of ten lanes, four of which are for vehicles above 3,000KG, and the other six for vehicles below 3,000KG; accommodation for bachelor employees; administration offices; two branches consisting of one lane for all types of vehicles, and mobile station for fleet corporate service. Inspection of one vehicle requires total of 35 minutes, 10 minutes for registration and report printing (entering vehicle information to computer database), and 25 minutes to go through technical inspection steps. Seventy three (73%) of total number of employees are in Operations Department as technical inspectors of vehicles, and 27% are spread over the administrative departments.
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Meetings are usually held in discussing excessive overtime hours and reward payouts (35-45% of total salary payment monthly), customer waiting time (which is an average of 75 minutes), data synchronization and customer service performance in branches, more facilities for comfortable working environment for the Operations Department or for company maintained accommodation.
A quick view in the balance sheet for the last three years (see Exhibit 3), it is shown that the assets are increasing (mainly for inspection equipments), and net profit growth in 2006 is 25% more than of 2005. These figures are not controlled. The single source of income is the inspection fee. The number of vehicles is increasing in Qatar as the country rapidly develops and progresses.
7-S Frame work practice on QTIC
Superordinate Goals or BHAGs:
QTIC does not have known and accepted BHAGs. The only slogan it works on is “Road safety and clean environment”. However, the purpose of the organization is actually to have “safe vehicles on the road.” In this matter, it is seen that the organization purpose for existence is not clear even to executive management.
The Traffic Department of Qatar was not using the dedicated authority to ensure the roadworthiness of vehicles on road in the earlier decade. However, the increasing rate of road accidents resulting from lack of vehicle safety standards and maintenance had resulted to a government decision to back up a private monopoly firm to conduct inspection to ensure road safety.
Without level of understanding and belief in logical BHAGs, QTIC will face the same situation of AT&T in 1970s, when competitors enter the market.
QTIC core value should be focused on customers and this may be identified by using a customer feedback analysis. Customers are not satisfied about: long waiting time, untoward treatment and poor customer service especially when it comes to explaining the vehicle inspection report in a simple “layman’s terms”, complicated procedures, and occasional mishandling of the vehicle.
Core value has to be “Service and Educate Customer” aligned with core purpose, “Be Safe on Road”. It is for my safety and theirs, driving on the same road.
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The challenge is to shift the culture of the organization from monopoly culture to a high service organization. “A monopoly provider, whether state-owned or private, faces fewer incentives to improve service than the firms operating in a competitive environment.” (Wallsten, 2002) He further mentions in relation to performance of monopoly firms, that “research finds that competition drives the biggest improvement in the business.” (Wallsten, 2002)
The strategy is more favorable to be “Safety Vehicle Inspection and Education Institution by 2013”. The aforementioned has a strategic view. As the monopoly contract ends after ten years, it is not known what the market situation will be. Furthermore, if the market allows entering competitors, the company will remain as the biggest, oldest, and most experienced education and Inspection Company for vehicle safety in the market. This strength will be a reason for QTIC to exist in the market even after the contract is not renewed.
QTIC obtained the ISO 9001-2000 certificate on 2004, which shows that internal work processes and procedures exist in the organization. However, there is a lacking in higher management objectives in the likes of operations budget, strategic planning, financial planning and reporting, strategic recruiting and selection, and training and development programs.
There is an information system running for each department separately, with no integration among the systems running. In addition, there is no data compiling and analysis although the registration and reports system is capable and collecting such data on daily basis that may be helpful in determining trends in arrivals of vehicles, heavy and slack periods during the year. This is useful for manpower scheduling and planning, prospective new inspection locations, and perhaps inspection hours adapted to customer flow.
Also, this system stores a database of details of the vehicles personal owners, the vehicle manufacture details, the usual defects appearing in vehicles. This may act as market “feel” of customer needs and be useful for future new business openings.
Currently front line workers handling inspection reports and customer service are having the skills required for data entry and customer service technicians, but they are not performing to a quality standard due to the lack of clarity of roles. Their role is to serve, educate and communicate the company message to the customers. “The role of frontline co-workers is often crucial, because customers are in direct contact with them. These co-workers are the one who can register problems that customer experience, and who should come up with ideas for new services. Besides, frontline co-workers are necessary for effective implementation.” (De Jong et al, 2003)
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On the other hand, operation workers are not aligned with the system. Every department is delivering the requested functional objectives, without moving towards a goal. In general, the employees are willing and able to do, but it is not clear to them what and how to achieve.
“A lack of highly qualified and experienced development staff is a major barrier to many innovations. High expertise refers to the availability of detailed knowledge about the firm’s basic technologies, customers and delivery processes. This factor is a critical for the development of new services.” (De Jong et al, 2003)
QTIC employs a diverse workforce. Employee ages range from as young as 20s to as old as 50s. There are 16 nationalities in the employee roster. Female employees are a minority, and thinly spread from the ranks to management. Being a male-dominated organization in a patriarchal society, there is evidently prevalent behavior of pushing over the females, especially those in authority, including the Asst MD herself.
Employees come from different races and color: Arabs, Asians, black or brown. Each race, each nationality brings with them their cultural differences, tendency to miscommunication due to language problems, and their prejudices and preconceptions against other nationalities and races.
Such diversity is not put to good use, when it comes to creativity and innovations. Each group puts down the other. When it remains unchecked by management, such behavior grows, resulting to an extremely unfriendly and almost hostile working environment, adding more conflict, and frustration on the Managers and Supervisors.
QTIC is beset by high level of unhealthy politics. An employee can submit a complaint or requisition directly to Asst MD, bypassing all procedures, and obtain her approval for it. Those who politically harasses her, gets what they want.
Since the startup, QTIC tries to observe an open culture. This is attributed to the fact that according to Johne and Storey as cited by De Jong et al, “senior managers play a key role in stimulating an open culture. It is important that they share their ideas with employees, stimulate communication within the organization and provide leadership to motivate employees to move into uncharted areas.” (De Jong et al, 2003)
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While the open door management style is a very good method, there is a limitation for it. First; the authorities given to department managers must be recognized and must respect chain of command and if applicable a grievance mechanism. Second, top management must refrain from giving out exceptions to the company policies and the procedures.
When implementing a change initiative like an ISO 9001-2000 standard, the commitment of executive management is required to ensure that things get done, in alignment to the agreed strategy, and not give exceptions more often than necessary. Otherwise the wasteful outcome is “one step forward and two steps backward.” such behavior from top management “drives the employees crazy as they could not get a good read of the seriousness of the change initiative.” (Shinn, 2002).
Aligning the Ss
After the 7-s frame work analysis, it is very clear that QTIC has employees with skills, partially with a structure and fragmented systems, running operations on a day to day basis with no clear target or goal. Employees do not know how an ISO certification makes a difference in their work in QTIC. The vision and planning is missing, and the outcome is a group of employees, skilled but frustrated and confused.
After setting up the required Ss in QTIC, alignment will be a hard task. It must start with a clear vision and sense of purpose. The employees have to believe in credibility of the goal and the impact of this goal on themselves. Recruitment and selection must follow standards for skills and competency sets. Training and continuous development must be enforced as part of retaining qualified and skilled employees. A total rewards scheme must be in place as a retention scheme. Managers require strategic management training. Supervisors need coaching so they will be more proactive in their work.
Action Plan and area of change
Reorganizing the structure
QTIC organization existing organization chart (see Exhibit 1) is a mix between simple structure and mechanistic structure, and it might be beneficial to migrate to mechanistic structure. This problem occurred at the startup of QTIC when the Asst MD was handling everything, from recruitment, finance, legal, and purchase. In time, the organization grew and the need for specialization came. Departments were created. However the cycle was not finalized by re evaluating the existing structure and arranging the remaining functions.
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Selecting the Mechanistic model for QTIC structure (see Exhibit 2) is based on departmentalization by function, stable structure, reconciliation for each level in the hierarchy, communication between superior and subordinate, and adopting of loyal value. (Burns et al, 1961) It may involve splitting Public Relation & Customer Service Department into two Sections, one for Individual Customers, and the second for the Corporate Services. It would help to combine the two sections under Operations Department and use job swap methodology to mix the technical skills and knowledge. The target here is to maximize established procedures in inspection processes (check lists), to select trainers to train inspectors, to inculcate the family culture within the department / organization, and prevent the individual feelings of holding back unique knowledge.
There is a difficulty in recruiting skilled, experienced individuals, with a character to fit the organization spirit. Accordingly one of the objectives behind this idea about creating a small education centre will be creating a pool of skilled, educated, and with the competencies and characteristics required to be recruited later in the company.
Based on Systems thinking model (Garrett, 2005) the model includes the following components, namely Systems, Process and Linkage, Improvement Model, Tools, Teams, Business Planning, and Measures.
To make sure the company will have better customer oriented service, the strategy for recruitment and selection will be as follows:
In Public Relation & Customer Service Department, the skills required will be data analysis, sales, marketing, customer service oriented, and ability to work independently, to be able to bring into the company new ideas in enhancing the relations between the company and the customers / general public. Time frame for this task will be immediately aligned with the in-house training, with consideration of recruiting new manpower to prevent frustration and confusion from work load.
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Skills required in Operation Department are; high technical knowledge, ability to work with less supervision, ability to follow procedures, and hard working. This is a skill already shown by existing manpower, and it needs to be standardized and imitated by new recruits. This will align the employee’s behavior with the organization culture
Moreover, the Human Resources strategy shall actively focus on performance management based on balance score cards, compensation analysis, and a cost-effective reward system.
It is evident that there is high politics in QTIC. This problem cannot be terminated completely, but at least it may be limited and positively managed by clear objective setting for each position and an effective performance appraisal system. However, a leader has to understand the diversity inside the organization, and accordingly control and manage the level of politics within the organization.
It is recommended to have meetings more frequently and presenting to the employees the new way of working, explaining in simple language, where we are, where we want to be, which track we will use to reach our goal. It is also important to implement a plan on how to track progress and results.
“Employees don’t like surprises; they want to know what progress is being made, plus when, where and how the change effort will impact them” (Shinn, 2002).
Area of Focus
Although the job is temporary and short, it can be a good time to show potential leadership and strategic thinking ability by presenting this assessment, and expressing my recommendations to executive management. This involves issues like focusing on policy development, structure alignment, using communication and evaluation as a tool, instilling family culture and values and a professional working environment, planning and measuring the action taken and achievements in reaching the planned organization goals. Not to forget the feedback cycle both upward to executive management and downward to the employee ranks. Feedback forms have to be part of the data collection and analysis. Note that feedback comes from both employees and customers.
In government-backed monopolies, some strategies to compete presented by Accenture Postal Project are optimization that is maximizing the efficiency and effectiveness of existing processes; innovation, that is introduction of new services designed to respond to needs of the customers; and diversification that is entering new lines of business to expand services. (Bacon et al, 2004)
However, in any change initiative, “employees are often reluctant to become involved in development activities as new products may increase their workload.” stated further that “managers therefore also need the skills to sell an innovative idea to front line employees. This is critical to gain their involvement and support.” (De Jong et al, 2003)
“Structure does make a difference, but it is not the main point of achieving success. Transforming the culture – changing the way we do things around here – is the main point. .. It does not mean adopting innovations one after another.” (Fullan, unknown)
QTIC has to withdraw from the complacency brought by monopoly, and start to create the market, and lead it, set quality standards for it. There will be no assurance of safe vehicles on the road, if the inspection services do not attain excellence.
New Market potential
Aligned with the organization goal, QTIC has to make use of the bond between the company and the government, to increase the chance of having the contract renewed after 10 years. This bond and relation may be about the following new service proposals;
•Garages evaluation and certifications, under Ministry of Municipality. Currently, there is no audit done on vehicle repair garages, no certification, no categorizing, and no trade tests for their technicians. Doing this categorization and certification will be very effective for controlling and enhancing a high service attitude in the market in this area. This is expected to result to better customer satisfaction.
This an area where we can make use of the QTIC education centre to educate the technicians working for this garages, and in a later stage certify these garages to do the official technical inspection, aiming to reduce the waiting time inside the company and the like.
•Opening internal repair workshop for major problems, again for customer service enhancement. If QTIC is having its own repair garage, not for repairing all type of problems, but for repairing the major problems that the customer failed to repair exhausting all resource in the market, the technical skills and knowledge is available within QTIC manpower. What is required is a good location to put the equipments. This will be a career path where QTIC can raise the ceiling of its human resources policy, as one of the major problems in QTIC is to have a clear career path for the huge number of technicians working in Operations Department.
•Selling the data base available with QTIC, after categorizing the data base, and covering the legal issue behind selling this data, QTIC can market for selling the vehicle owners information’s same as Yahoo! Website is doing where it is mentioned in the website www.yahoo.com that they are selling data of the same type.
The main problem in the situation of this company is the monopoly contract earned in 2003. Monopoly does not require sustainable competitive advantage. There is no competition. There is no effort required to market customers. QTIC is a service company, but there are too many complaints from general public on service delivery, especially customer waiting time. There are also complaints about the aggressive standards the company is implementing in vehicle inspections. The customers do not have an appreciation of why the standards are so strict.
Actions immediately after the meeting;
After the meeting, I will prepare my plan in a presentation, start communicating the message of change and why, phasing the new organization strategy, gathering the motivated individuals, selling the need for change to stakeholders, implement the planned training and development study, and monitor the results for any modification on strategy that can facilitate reaching the goal, or enhance company performance.
Communicating the massage of change is a critical task, as I have to understand my old peer’s expectations from me, and I have to observe the company respond to the massage of change which has to be communicated in a creditable manner through the leader face to face. “Messages with potential emotional impact were delivered face-to-face by someone the audience trusts” (Wagnecz, unknown)
After challenging and motivating the employees to achieve the new goal with believe that it can be achieved we need training and development program aligned with policies implementations.
Coaching the mangers and the supervisors to implement and maintain the new organization behavior has to be my main issue, as without the internal proactive spirit nothing will be accomplished.
Existing Organization Chart
Planed Organization Chart
Financial Balance sheet
Dec.31, 2006Dec. 31, 2005Dec. 31, 2004Dec. 31, 2003
A S S E T S Qatari Riyals Qatari Riyals Qatari Riyals Qatari Riyals
Cash and banks8,622,057 3,557,7423,815,5886,361,833
Stock – at cost17,155 6,1609,4204,855
Advance payments for suppliers582,058 16,194,27713,203,7219,559,701
Accounts receivable and other debit balances2,300,489 2,619,2131,093,598976,409
Total current assets11,521,759 22,377,39218,122,32716,902,798
Cost of fixed assets54,327,329 36,834,52836,179,80435,470,006
Less: Accumulated depreciation(12,745,505)(8,923,972)(6,129,264)(2,799,168)
Net fixed assets41,581,824 27,910,55630,050,54032,670,838
Total assets53,103,583 50,287,948 48,172,867 49,573,636
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable3,417,608 1,741,766550,455952,702
Accrued expenses120,000 96,26267,95756,208
Other credit balances1,279,140 1,186,639424,708230,307
Total current liabilities4,816,748 3,024,6671,043,1201,239,217
Founders’ accounts615,510 975,8891,951,7785,406,095
Statutory reserve1,268,739 420,172292,832
General reserve18,653 757,796235,492
Net profit for the year (Period)6,383,933 5,109,4244,649,6452,928,324
Total shareholders’ equity47,671,325 46,287,39245,177,96942,928,324
Total liabilities and shareholders’ equity53,103,583 50,287,948 48,172,867 49,573,636
1Article from InternetScott, Wallsten (2002) “Does Sequencing Matter: Regulation and Privatization in Telecommunications Reforms” World Bank Research Development Group. //ideas.repec.org/p/wbk/wbrwps/2817.html (accessed 11 April 2007)
2Article from InternetDe Jong, J P J, Bruins A, Dolfsma W, Meijaard J (2003) “Innovation in service firms explored: what, how and why?” EIM Business and Policy Research. //www.eim.net/pdf-ez/B200205.pdf (accessed 11 April 2007)
3Article from InternetShinn, S Gregory. (2002) “15 Waste Scenarios” //www.asq.org/pub/qualityprogress/past/1202/6715wastescenerios1202.html (accessed 11 April 2007)
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6Article from InternetShinn, S Gregory. (2002) “15 Waste Scenarios” //www.asq.org/pub/qualityprogress/past/1202/6715wastescenerios1202.html (accessed 11 April 2007)
7Article from InternetBacon, Sylvain & Michael, Coughlin S (2004) “Achieving High Performance in a Competitive Postal Environment” The Postal Project Vol. 1. //www.postalproject.com/documents.asp?d_ID=2443 (accessed 11 April 2007)
8Article from InternetDe Jong, J P J, Bruins A, Dolfsma W, Meijaard J (2003) “Innovation in service firms explored: what, how and why?” EIM Business and Policy Research. //www.eim.net/pdf-ez/B200205.pdf (accessed 11 April 2007)
9Article from InternetMichael Fullan, (Book Summery) “Leading a Culture of Change” //administration.ucok.edu/booksummaries/pdf/LeadinginaCultureofChange.pdf (accessed 11 April 2007)
10Article from InternetMichael Fullan, (Book Summery) “Leading a Culture of Change” //administration.ucok.edu/booksummaries/pdf/LeadinginaCultureofChange.pdf (accessed 11 April 2007)
11Article from InternetGarrett G. J.(2005) “Organization, Systems and Culture” at //www.moderncasting.com/archive/WebOnly/1105/WebOnly1105.pdf (accessed 13 April 2007)
12Article from InternetWagnecz E Lorlee Manager – ITO Communications BellSouth Telecommunications “Communicating Change to a Technical Organization” at //www.stc.org/confproceed/1998/PDFs/00034.PDF (accessed 14 April 2007)