TOTAL QUALITY MANAGEMENT AT ALLIED SIGNAL

Since Lawrence Bossidy took over as chief executive at allied signal operating profits have increase by 28.5 percent, return on shareholder’s equity jumped from 8.0 percent to 17 percent, and the stock price has risen from 29 ⅜ to 55 1/2. How did this turnaround take place? Bossidy has implemented a total house cleaning and culture change, in which HR has played an important role.
First, Bossidy develop a statement of corporate vision (“one of the world’s premier companies, distinctive and successful “) and values (e.g., customers satisfaction, integrity, team work and speed). Although this statement seems to be standard fare for corporate vision/value statement, it has galvanized people.
Second, he immersed the company in total quality management as a means of turning the vision and values into reality. For example, to implement the total quality management program, all 90.000 employee will attend a four-day course in total quality management concepts, procedures, and applications.
Finally, he implemented a top-to bottom change in human resources pool, teams of top managers developed detailed plants for revamping college recruiting, staffing, career development and training and education. These teams studied top companies such as corning, Bechtel, Hewlett-Packard, and Johnson & Johnson, using them as benchmarks. In addition, they held focus group with employee to identify how HR could better serve the needs of employee. Their Masters plan is to develop a deeper pool of human capital through career patching, rotating managers across businesses, and management education. Bossidy believes that this investment in people will help allied signal achieve its ambitious growth goals.