GTE Supply negotiates contracts and purchases a wide range of goods needed for telephone operations. The goods range from office supplies to telecommunications fibre optics. The majority of the company's customers are part of the parent company's internal network of GTE local telephone companies (telcos). GTE Supply manages around 200 warehouses nationwide and is primarily responsible in the installation, support and maintenance of telcos.

Until the mid 1970s, GTE had managed its GTE telcos in a decentralized and, it may be said, in a somewhat disorganized manner. In an attempt to standardize and track installation and maintenance materials, the company decided centralized controls would improve consistency and also at the same time reduce costs. This led to the formation of GTE Supply, which is headquartered in Dallas, Fort Worth, Texas. Nevertheless, GTE also appreciated that centralization does not necessarily guarantee improvement, and it could easily amplify existing problems.

Soon after its creation, GTE Supply customer-contact employees began to report complaints from customers about price, delivery and employee attitudes. This led GTE Supply to systematically survey internal customers. This was done not simply as an exercise to fulfil requirements of some formal programme, such as quality, but because it was believed that there would be two benefits: firstly, improve the visibility of the group within the company and, secondly, the actions would counteract the depersonalizing aspects of the supply process automation, which had been undertaken to improve accuracy and reduce costs.

The development of the internal surveys became an instrumental part of GTE Supply's Quality Improvement (QI) process. By using the surveys to identify internal customer needs, and by publicizing the results and by keeping track of the trends over time, GTE found that it could see how well it was progressing in achieving critical aims set by leadership. The so-called critical items included such things as:

   implementing customer advocacy, education and feedback programmes;

   stocking the correct items;

   improving communications;

   improving quality;

   encouraging teamwork and involvement;

   recognizing employees;

   striving for a single efficient system;

   instituting an integrated distribution network;

   implementing a supplier management process;

   benchmarking operations.

By paying careful attention, GTE Supply was able to develop a systematic and highly effective process of obtaining and using its information from internal customers. This is very important in large organizations, where it is easy to fall into the trap of focusing on narrow physical and financial objectives that are far removed from the needs of the employees they serve. The dialogue created by the process helped GTE Supply make partners of hitherto adversarial groups, and increase customer satisfaction as well as reduce costs.

GTE Supply's internal survey instrument came to be seen as an important method for listening to the voice of internal customers in the dispersed GTE Supply network. It became a central part of the QI effort, in its ability to act as a diagnostic and motivational tool to improve the company's performance.

Internal survey instrument

The survey was constructed with care, to ensure that it was not open to internal criticism and cynicism that often goes hand in hand with such initiatives. The strongest safeguard against cynicism was the vice president's promise that actions would be taken on the results of the survey. There was a strong call to action from the top leading people to perceive it as a serious tool for driving improvement.

In designing the instrument, GTE Supply set up internal focus groups as well as conducting general internal market research to define key concepts relevant to their service environment. These concepts were then used to create a list of performance criteria against which GTE Supply's performance could be assessed. The rating uses a five-point Likert scale, with the anchors: excellent, good, average, below average, poor. The respondents rate the following parameters:

   provides complete information;

   understands customers’ needs;

   does the job right first time;

   provides timely responses to questions and requests;

   anticipates customers’ needs;

   keeps customers informed or updated about problems or solutions;

   avails itself to contact with customers;

   has subject matter expertise;

   makes it easier to do business with;

   meets due dates;

   has a spirit of co-operation;

   follows up on service;

   provides clear written communication;

   provides clear verbal communication;

   gives customers an opportunity to provide feedback;

   tells customers whom to call with questions;

   is courteous;

   initiates and approves changes.

Additionally, three questions attempt to probe a more global perspective of the company's performance. These are:

1    How do you rate the overall quality of service provided by GTE Supply over the last 12 months: excellent, good, average, below average or poor?

2    Would you say the overall quality of GTE Supply is ‘much worse’, ‘worse’, ‘about the same’, ‘better’ or ‘much better’ than 1 year ago?

3    Comparing its overall quality to the price of its products and services, how would you rate the value GTE Supply offers: excellent, good, average, below average or poor?

To get individuals to elaborate on these questions, each is followed by ‘Why did you say that?’

Finally, individuals are asked: ‘What improvements, if any, could be made by GTE Supply?’

The survey is administered by an outside company, which is experienced in conducting internal customer surveys by phone. At the beginning, the survey was run annually, but it then moved to a quarterly run. This enabled GTE Supply to be more responsive and serve the needs of those responding. Since the survey is internal, the response rate was high. Over time, the survey has become part of the job responsibilities of managers, indicating the level of support for the survey process.

Data into actions

The collected data are presented and examined under two formats:

   Quantitative data, which are used to compile longitudinal trends, and compare performance differences across telcos and different subgroups.

   Qualitative data, which are used to provide more detail and substance. All managers are required to read the qualitative responses.

The quantitative data help define priorities, while the qualitative data help to identify motivations and highlight any unusual or unanticipated issues.

At year-end, detailed reports are given to senior management, who use the information to define future objectives. Regional managers then use these to develop action plans. Once all action plans have been prepared, these are checked to see that they align with strategic objectives. Next, employees are then made responsible to implement the plans, and the outcomes of the implementation effort are tracked and evaluated. Plans are adjusted if they do not deliver to expectation.

GTE Supply has managed to get a great many benefits from the internal survey. It has improved communication between management and staff, which has consequently led to increases in efficiency and effectiveness. The enhanced flow of information has helped to decrease costs by:

   improving forecasts of customers’ supply needs – allowing GTE to plan ahead;

   decreasing inventories – telco managers seeing higher responsiveness from GTE Supply no longer need to stockpile;

   eliminates unnecessary or inappropriate supplies;

   improves economies of scale.

Additionally, the improved communication and sense of higher empowerment leads to higher levels of customer satisfaction because:

   telco employees have a channel to express their dissatisfaction, highlight their needs, etc.;

   new products are developed and introduced in a timelier manner;

   contact is established between GTE Supply staff and telco staff, such that if problems do arise they are rapidly communicated and addressed.

Lessons learned

GTE Supply's internal survey and associated QI actions transformed it from one of the worst performing to one of the best regarded companies within GTE's portfolio. On the way, a number of valuable lessons were learnt.

On management of quality, GTE Supply learnt:

   The QI process does not have to be driven by a formal quality programme.

   Commitment and involvement of leadership is critical.

   Centralized HQ does not necessarily interfere with employee empowerment. Quite the opposite, it may enhance it, by providing aggregating and standardizing information, and then encouraging local units to create their own action plans for improvement.

   The depersonalization part of automation can be countered via a good communication process.

On the improvement side, the company found out that:

   Effective communication can lead to outstanding performance outcomes.

   Combination of formal communication processes in which the internal survey is a focal point helps the assimilation of new organizational units into the company's quality improvement culture.

   Shared aims are facilitated between suppliers and internal customers, so benefiting strategic alignment.

On the mechanics of the process, GTE learnt that:

   Satisfaction surveys should be geared toward the respondents rather than the sponsors.

   Quantitative information must be supplemented by qualitative information to draw more rounded conclusions and assessments.

   A survey is effective only if actions are taken. Just collating data is never sufficient. Action must be preceded by objective setting and clear communications.

GTE Supply also learnt that there are differences between external customers and internal customers, and these differences must be taken advantage of:

   Partnership with internal customers is greatly facilitated by closeness, frequent meetings and common organizational aims.

   The ease of identifying and the long-term availability of internal customers should be used to build a stakeholder constituency to improve performance.

   External customers are concerned with matters other than those of the company, so the data collected need to be translated inwardly via processes such as Quality Function Deployment (QFD). For internal customers, on the other hand, the survey is just the beginning of a dialogue.

The biggest and most important lesson that GTE Supply learnt from their effort was that listening to internal customers is very important if real improvements are to be realized in external customer satisfaction. Internal listening is complementary to external focus.

Source: Drew, J. H. and Fussell, T. R. (1996). Becoming partners with internal customers. Quality Progress, October, 51–4.