Creative Budget Presentation: Using Statistics to Prove Your Point

Burgin, Robert. “Creative Budget Presentation: Using Statistics to Prove Your Point.” The Bottom Line Reader: A Financial Handbook for Librarians. New York: Neal-Schuman, c1990. 

The fine art of budget presentation is based on a two-step process: the request for funds and the defense of that request. Although both steps use statistics, it is the budget defense that demands the creative use of statistics. 

Establishing your library’s needs and proving its good stewardship (also known as effectiveness) are the bulwarks of budget defense. First you must convince the governing body that the funds requested are necessary to meet a need. Second you must remind the funding body that the library has used effectively the money it has received in the past. In short, the library’s case is that the money is needed and that it will be well spent. 

The ideal of statistical collection can be summed up briefly: if the library does it, count it. Yet, although libraries engage in a great variety of services and activities, few of these are counted. At budget time, however, any and all of these services and activities may be called into question by members of the funding body. If you can’t produce the evidence—including statistical evidence—to justify these activities, not only is your particular argument lost, but confidence in your ability may be eroded. If statistics in a specific area have not been collected, support for budget proposals in that area will probably be weaker than it should be. 

Overdue fines are an example of an activity where few statistics are kept. While all libraries devote staff time and effort in attempts to encourage the timely return of borrowed materials and to retrieve those that are not returned on time, few keep statistics concerning the effectiveness of their efforts. These statistics would be useful in defending a budget request for increasing the circulation staff or for automating the circulation system since studies show that libraries with automated circulation systems have lower overdue rates than do libraries with manual systems. (Patsy Hansel and Robert Burgin, “Hard Facts About Overdues,” Library Journal 108 (February 15, 1983): 349-352. Robert Burgin and Patsy Hansel, “More Hard Facts About Overdues,” Library & Archival Security 6 (Summer/Fall 1984): 5-17)

At the Forsyth County (North Carolina) Public Library System, we used these data in our request for automatic circulation (see Table 1). We compared our own overdues rate with the average for computerized libraries, estimated the drops in overdues that could be expected if we automated, and translated that percentage drop into books that would be returned and available for patrons. We found that if Forsyth County were automated, 2.59% or 41,019 more books would be available for the patrons to check out rather than being overdue. 

Table 1: Percentage of books still out on the date they were due (1983)

Forsyth County	11.31%
Libraries with Automated Circulation	8.72%
Difference	2.59%
Number of Books Circulated in Forsyth County		1,583,755

Statistics for Decision Making
Realistically, few librarians have the time to exhaustively collect statistics. And so, the collection effort must be focused by the goals and objectives of the library. Statistics, after all, are tools and not ends in themselves. The connection between the library’s goals and the statistics collection process cannot be overemphasized: statistics help in the formulation of reasonable goals, goals help focus the process of collecting statistical data. At the very least, then, the statistics collected should be relevant to the goals of the library and should enable you to determine whether the library’s goals are being met and, if not, how serious is the shortfall. 

Collecting statistics requires efficient data collection methods. It should be a continuing process since collecting all the statistical data needed for a typical budget presentation would be too great a task to undertake at one time. Using microcomputers and spreadsheets, statistical data can be collected and compiled efficiently and in a time-saving manner. (Claudia Perry-Holmes, “LOTUS 1-2-3 and Decision Support: Allocating the Monograph Budget,” Library Software Review (July-August 1985)” 205-213). While the article focuses on the use of spreadsheet software in an academic library, the ideas presented can easily be translated into the public library’s environment. See also Philip M. Clark, “Processing Numbers with Spreadsheet Programs,“ New Jersey Libraries 18 (Summer 1985): 17-19). Gathered throughout the year, data should be saved on disk until needed at budget time. 

Libraries with large automated systems for circulation and cataloging also can use these systems for gathering and manipulating a sophisticated range of data for decision and budget support, as Ken Dowlin and others have pointed out (Kenneth C. Dowlin, “The Use of Standard Statistics in an On-Line Library Management System,” Public Library Quarterly 3 (Spring/Summer 1982): 37-46). In fact, this may be one of their least utilized but most exciting capabilities. 

Continually presenting statistical data to your funding board is as important as the continuous collection of the data. Funding officials should be accustomed to receiving status reports on the library regularly, as part of the monthly report, for example, and not just at budget time. Through this ongoing review you educate the funding officials, helping them to understand certain statistics by frequently presenting arguments that employ them. If this process of education has not been ongoing, it may be too late at budget time to not only present and defend a budget, but educate officials as to what theses statistics mean. 

Remember, these statistics do not exist in a vacuum. They are a reference to something else—either an internal yardstick or an external. Internal yardsticks can be goals and objectives and comparisons with historical data. External yardsticks are the performance of other libraries and library standards. 

Internal comparisons
Good data collection, guided by the goals and objectives of the library, will enable you to compare realities with possibilities. Comparing goals and statistics relates to the two arguments expressed in budget defense: need and good stewardship. As a part of the needs argument you might note that the library’s goals have not been met and cannot be met without the requested funds. For the good stewardship argument you can remind members of the funding body that the library has met its goals in the past and can be expected to spend the requested funds in an equally wise and effective fashion. 

In Forsyth County, for example, the covering sheet of our budget presentation summarized the goals and objectives of our past budget year and noted which goals had been met and which still needed to be met. The presentation was based on relevant statistics that had been gathered. 

Another approach is to compare the library’s most recent performance with its past performance in order to show that the library is improving (in order to make the case for good, efficient use of funding) or that the situation is not as good as it once was (in order to establish that a need exists). At the Wayne County (North Carolina) Public Library, we were able to show the commissioners and city council members data (see Table 2) on growing circulation as evidence that the increased funding of recent years paid off and should be continued. 

Table 2: Circulation Change 1975-1981

	Wayne County Book Circulation	Wayne County Annual Increase	State Average Annual Increase
1975-76	143,853
1976-77	166,503	15.7%	0.9%
1977-78	205,559	21.7%	4.3%
1978-79	218,979	8.1%	3.1%
1979-80	221,243	1.0%	3.1%
1980-81	225,085	15.3%	9.4%

External comparisons
External statistics—the performance of other libraries and library standards—provide a yardstick against which to measure performance. For example, book circulation statistics alone are meaningless. But they can be made meaningful by comparing them with internal data. For instance, how much has circulation increased over the past year? Even more meaning can be given to a level of activity by comparing it to the level of activity of other libraries or to an established standard. For instance, how does per capita circulation compare with other similar libraries? 

There are a number of sources of statistics and standards for external comparisons, including national and regional data. Statewide statistical reports also are issued by most state library agencies. Most important is to collect reasonably compatible statistics so that external comparisons can be made. An argument for the adoption of ALA’s output measures is that they provide a common core of statistical data for use by libraries across the country. Or, since most state libraries require an annual statistics reports, these reports can provide a shared set of data for use by libraries in an individual state and by libraries outside the state. 

Making comparisons
One way to present comparison data is to boast that the library is meeting its goals or improving its performance (using internal statistics), or to claim that the library is the best in some area (using external statistics). This approach generally serves the argument of effective stewardship—that the library has done an admirable job with funds provided in the past and can be counted on to continue the good work. There is an implied argument of need in this positive approach—the users are accustomed to this fine level of library service and need to have it continue. 

Conversely, evidence of great need may be presented to the funding body based on the fact that the library is the worst in some area. When using such data, of course, try to avoid blaming or being blamed for the situation; instead, show that in spite of the worst you and your staff are trying; and constantly report progress to your funding body. 

At the Wayne County Public Library we supported our request for additional book money by pointing out that the library was the last in the state in the number of books per capita. We were quick to note why this was the case—that until recently, the library had not had the space to house many new books. We also reminded the commissioners and council members that this was no longer the case. Our new facility could house several times the collection of the old building and we were doing the best we could without limited resources—our turnover rate was one of the highest in the state. We also shared with everyone the successful results of increased book funds: our book collection was the fastest growing in the state (see Table 3). We added more books in one year than did many libraries with larger overall budgets and we jumped out of last place in the state in books per capita. 

Table 3: Book collection change 1976-1981

	Wayne County Book Collection	Wayne County Annual Increased	State Average Annual Increased
1976-77	32,968
1977-78	41,434	25.7%	3.9%
1978-79	44,202	6.7%	2.7%
1979-80	53,255	20.5%	3.1%
1980-81	58,202	9.3%	2.8%
1976-77 to 1980-81		76.5%	12.8%

 

Presenting statistical data
While statistical data are important, the way in which those data are presented is crucial. Although the ideal of statistical collection is the thorough enumeration of all library activities, the ideal of statistical presentation is brevity. Most funding bodies do not have the time to sift through an abundance of figures; they should have only the highlights presented to them. The general budget presentation—and the defense—should be succinct, using only a few relevant, core statistics—statistics that the funding officials have been educated to understand. But, the statistical arsenal should be thorough in order to answer all possible questions and meet potential objections. You should be able to defend any specific budget area briefly and concisely. 

Per capita or not
Should statistics be expressed as raw data or in per capita terms? There is a maxim in the legal profession that if the case is weak on facts, one should argue based on principle, and vice versa. And so, if your case is better presented using raw data, use raw data; if your case is better presented using per capita data, use per capita data. 

Realistically, few librarians have the time to exhaustively collect statistics. And so, the collection effort must be focused by the goals and objectives of the library. Statistics, after all, are tools and not ends in themselves. The connection between the library’s goals and the statistics collection process cannot be overemphasized. 

Especially with larger systems, the sheer volume expressed by raw data will be sufficient to make a point or to allow a comparison. At the Forsyth County Public Library, we tended to base our presentations on our being the state’s leading or second leading library in book circulation, reference services, and the like—all expressed in raw data. In Wayne County, however, the dearth of books could only be expressed adequately in per capita terms. We ranked an unexciting fortieth or so out of seventy public libraries in North Carolina in book holdings, and a deplorable last in the state in book holdings per capita. 

How much is that in service?
Budget presentation should translate everything into service—both requests for more money and potential cuts. In Wayne County, when we requested that the position of children’s librarian be upgraded to a professional position and that our programs in that area be expanded, we could estimate the number of additional children who would be served. When we requested more book money, we were able to estimate how many books that money would buy, how many circulations would result, and how many people would be served: 

In 1980, the average volume added cost the Wayne County Library $9.39. In 1980, the average volume in Wayne County was checked out 4.4 times. 

A $10,000 increase in the book budget in 1980 would have:

• purchased 1,065 more volumes
• resulted in 4,686 more circulations 

Funding cuts should also be translated into the effects they will have on services: Will hours be reduced? At what cost in circulation in materials? In people served? Talk in terms of constituents and voters. The members of the funding body are often elected officials. They understand that the individuals being served by the library are also the individuals who will cast votes for or against them or their party. 

How much is that in candy bars?
Two years ago, the Wall Street Journal ran an article that pointed to a trend among the advertisers of America’s largest corporations: “If Camel smokers had walked a mile for every Camel produced by R.J. Reynolds, they would have walked to the sun and back more than 17,000 times,” claimed one ad. “Two ships the size of the Queen Elizabeth II could be floated in the ocean of Hawaiian Punch Americans consume annually,” declared another (“If All Our Reporters Are Laid End to End … They Don’t Report,” Wall Street Journal 4 April 1983). 

Outrageous presentations draw attention to the sheer volume of success of the particular company in terms that the consumer will remember. Three trillion cigarettes may be a lot of cigarettes, but that figure doesn’t make the same impression as 17,000 trips to the sun and back. 

You can also dress up your library’s statistics in exciting terms. In reporting on the same Wall Street Journal article elsewhere, I suggested the following as examples of what could be done: “All the people who attended programs in North Carolina’s public libraries last year could fill the Rose Bowl 60 times” and “Public Libraries in North Carolina checked out enough books last year to line the road from Manteo to Murphy [the end points of the state] eight times.” 

The politics of budget presentation
The budget process is not an entirely rational one. Where one set of commissioners will be proud of the library’s standing as the best-funded in the state, another set will find this an indication that the library’s budget can be cut. Where one group will think twice about cutting the library’s budget if it means closing a certain branch, another will cut the budget and order the librarian to keep the branch open anyway. 

The data used for budget presentations quite naturally vary from library to library and, within the same library, from budget presentation to budget presentation. For example, in Wayne County we made two budget presentations each year—one to the county commissioners and one to the city council. The statistical data needed for each presentation differed because the arguments that satisfied one group differed from those that satisfied the other. 

What remains constant, however, is the need to use statistics when defending budget requests. Ideally, we should have a thorough arsenal of statistical tools and be able to use it in a flexible fashion in order to meet any contingency. We should be prepared. 

For example, be aware of statistics that might argue against a point, but don’t present statistics that won’t help, the case. In addition to being aware of them, be prepared to explain the apparent discrepancy between what is being requested and the supposed evidence against the case. 

The budget presentation and any related presentation of statistics should be rehearsed. Have a colleague play the devil’s advocate by asking for statistical justification of budget requests, by pointing out which statistics seem irrelevant or poorly presented, and by using statistics to argue against what is being requested. 

Finally, look at others’ budget presentations, especially those from nonlibrary institutions. What statistics are they using to back up their funding requests? Which statistics were the most successful? Which were best received? 

Easily applied statistical formulas
Statistics need not be esoteric or complex to be effective. In fact, to help present the case for budget support, they should be just the opposite. The most useful formulas, such as those shown below, offer the opportunity for multiple variations on a theme. 

Since there are physical limits to the amount of statistics that can be gathered, the library’s goals must give direction to the statistics-gathering effort. The goals should help determine what data are collected and the statistics should help formulate the goals. Finally, of course, the library’s goals should determine the development of its budget request. 

Six Very Easy Statistical Formulas 

1. Annual % Increase = 

This Year’s Figure – Last Year’s Figure
Last Year’s Figure 

Example: Forsyth County Library

1982-83 Operating Expenditures	$2,661,991
1983-84 Operating Expenditures	$2,782,764

Percentage Increase: 1982-83 to 1983-84 =

$2,782,764-$2,661,991

$2,661,991

Annual % Increase = 4.54%

2. % Increase

Over Several Years	Final Yr’s Figure-Beginning Yr’s Figure
	Beginning Yr’s Figure

Example: Forsyth County Public Library

1978-1979 Operating Expenditures	$1,463,907
1983-1984 Operating Expenditures	$2,782,764

Percentage increase

1978-1979 to 1983-1984	$2,782,764-$1,463,907
	$1,463,907
% Increase Over Several Years =	90.1%

3. Service Level Per Capita

Service Level

Population Served

Example: Forsyth County Public Library

1983-84 Book Circulation	1,583,755
1983-84 Population Served	249,172

Book Circulation Per Capita=	1,583,755
	249,172 =	6.36

4. Service Level Per Unit

Service Level Per Unit =	Service Level
	Units Under Consideration

Example: Forsyth County Public Library

1983-1984 Book Circulation	1,583,755
1983-1984 Staff (FTEs)	.953

Book Circulation Per Staff Member =	1,583,755
	95.3	16,618.6

5. Collection Turnover

Collection Turnover =	Circulation of Collection
	Items in Collection

Example: Forsyth County Public Library

1983-84 Book Circulation	1,583,755
1983-84 Book Circulation	355,550

Book collection turnover =	1,583,755
	355,550 =	4.72

6. Cost to Circulate an Item

Cost to Circulate an Item =	Operating Expenditures
	Items Circulated

Example: Forsyth County Public Library

1983-84 Operating Expenditures	$2,782,764
1983-84 Book Circulation	1,583,755

Cost to Circulate an Item =	$2,782,764
	1,583,755 =	$1.76

Budgeting and statistics

Types of budgets 

• Line-item 
• Most familiar, money allocated for each item 
• Lump sum 
• Formula
• Usually used in Collection Development 
• Depends on the number of users 
• Program 
• What is it going to cost? 
• Planning Programming Budget System 
• ZBB 
• Zero basis budget 

Line-item 

• Expenditures are divided into broad categories Advantages
• Easy to prepare 
• Easy to understand and justify 
• Disadvantages
• Difficult to shift funds between categories
• Not related to services
• Assumes what you are doing is essential 
• Assumes you are cost-effective 

Example of line-item

Salaries	$80,000
Fringe benefits	$35,000
Books & subs	$6,000
Binding	$3,500
Office supplies	$51,000
Travel	$2,000
Total	$131,600

Lump sum

• An amount is allocated to the library and manager decides how it will be spent
• Advantages
• More flexible than line-item 
• Disadvantages 
• Money allocated first rather than costs determined 
• Hard to justify 

Formula budget 

• This is most often used for acquisitions budgets in college and university libraries
• Standards are set for the number of volumes per capita for students, graduate students, faculty, etc. 

Program budget 

• Library’s activities are highlighted and the costs given for each activity 
• Steps 
• Define program objective
• Delineate major activities
• Determine nature and level of resources
• Develop budget requirements 
• State the requirements 
• Advantages
• Gives estimate of cost of provision of each program or service 
• Helps to decide whether to continue, modify or drop a program or service 
• Disadvantages
• Complex and time consuming 
• Especially first time around 
• Hard to estimate actual costs 

Planning programming budget system (PPBS) 

• Same as program budget, only woven into the total strategic planning process of mission and goals 
• Advantages 
• Emphasizes cost of accomplishing goals 
• Often gives you a unit cost of service
• Disadvantages 
• Disadvantages are the same as program budgets 

Example of PPBS 

• Goal: To manage a resource library collection 
• Resource required
• Librarian (1/4 time)
• Library Technician (1/3 time)
• Serials budget 
• Book budget 
• Library management software maintenance contract
• Library supplies 
• Cataloguing utility charges
• Document Delivery charges 

ZBB

• Concerned with future needs
• Requires justification of each unit of work 
• Units of work must be assigned levels of importance 
• Steps 
• Identification of decision package
• Ranking of decision packages 

Preparing budgets 

• May be a set amount and you must work within it 
• You may only have control over acquisitions and supplies budget 
• Staff and capital expenditures often outside your responsibility
• Statistics kept to determine average costs and to predict future demands 

Libraries as cost centres 

• True profit centre 
• Profit making segment of the business
• Library sells its services outside the company and is held accountable for making a profit 
• Must make money 
• Library no longer serves the internal information needs for the company 
• Must provide information to the outside world
• E.g., ALA’s library for retired persons creating database for aging articles, end up selling these through Dialog, becoming a business venture 
• Protected profit centre 
• Primarily services the needs of its own organization 
• Some services are offered outside the company
• Sales profits are put back into the library operating budget and offsets portion of costs 
• Self-sufficient cost centre 
• Charges back for services 
• Objective is to recover all or part of operating budget 
• Library not seen as burden, but part of the cost of other areas doing business 
• Cost-justified centre 
• Operates on own budget
• Requests for services recorded and a value is placed on the services often in terms of savings for the company 
• e.g. patent search seen as saving $100,000 worth of development of a product which has already been patented.
• Strictly for special libraries for profiting business 

Some specifics 

• Find out how you are to handle exchange rates 
• How are taxes handled, especially GST 
• Differs from libraries, for estimating book costs 
• Follow same accounting system as parent organization 
• Keep your own records the way you feel necessary 

More on statistics

•  Why do we keep them?
• Record of activities in library 
• Planning tool to show growth, decline 
• Peak periods
• Hire more people 
• Benchmarking against other libraries or standards 
• See what comparables are doing 
• Can you improve? 

What type of statistics should we keep? 

• National Core Library Statistics Program (NCLSP) 
• LAC has determined basic statistics which should be kept in all libraries and reported to the National Library 
• All types of libraries except schools have participated 

Categories of statistics kept by NCLSP

• Staffing 
• Expenditures on staff and collections 
• Collections (books, other, serial) 
• Services (informational transactions, circulation) 
• ILL stats (both received and requested) 

Problems with NCLSP 

• Very broad statistics
• Very traditionally based 
• Doesn’t take into account electronic resources 
• Not useful in special libraries
• But since stats can no longer keep stats on libraries…. 

1999 report 

https://web.archive.org/web/20050519081926/http://www.collectionscanada.ca/obj/r3/f2/02-e.pdf

Procedures Manual Activity

Note in every library and/or different circulation system, procedures may vary. 

Charging out a book in an automated circulation setting 

1. Click Borrower Services. 
2.  Search for the borrower’s name or their student number. 
3. Press Enter to initiate search. Their library record should appear.
4. Scan the item barcode.
1. If barcode is worn, key in the barcode. 
5. Item is added to the Check Out Items list. 

Opening procedures in a library

1. Arrive 30 minutes before opening. 
2. Turn on lights, computers, photocopiers, etc.
3. Check drop off 
4. Check phone, fax, e-mail messages
5. Check interlibrary loans; send, receive, process
   **If time available, contact interlibrary loan recipients 
6. Collect/send mail
7. Return books
8. If time, shelve returned books 
9. Unlock public door just before library opens; rotate open/closed sign 

Closing procedures in a library

1. Ten minutes before closing, warn any patrons in library they must be prepared to leave
2. Ensure all computers are logged off and turn off monitors. (Turn off computers if there are no classes the following day) 
3. Push in all the chairs and dispose of any garbage.
4. Close all doors that need to be closed.
5. Lock any safe keeping drawers. The drawer should be locked at all times. 
6. Turn off all lights. 
7. Ensure that the main library door is locked before exiting.

Policies and Procedures

Policy vs. Procedure

• Policy manual describes the why of an operation 
• Procedure manual describes the how of an operation 
• Blueprint of how library functions 

What should policies be? 

• Consistent
• Reflective of objectives and plans
• Flexible
• Distinguished from rules and procedures
• Written 

Advantages of policies 

• Available in same form to all staff 
• In manual
• Online 
• Can be referred to 
• Clarifies any potential misunderstandings 
• Indicative of honesty and integrity 
• Readily disseminated 
• Available to new employees 
• As part of training process 
• Process of written focuses thoughts about policies 
• Generates confidence in leadership and fairness 

Why have a manual? 

• Orient new staff members 
• Help in performing duties consistently
• Gives assurance
• Makes sure it’s done properly 
• Assist substitute or short-term workers 
• Help explain procedures to patrons 
• The manual must be a reasonable size. 

Writing tips 

• Break down tasks into chronological steps 
• What do you do when? 
• Use consistent terms 
• State instructions in plain language 
• Brief short sentences 
• Use positive language for instructions
• Tell people what to do 
• Use negative language for warnings
• Must have dire hard consequences 
• Write procedures in second person imperative
• “Do this” not “He or she does that” 
• Straight forward instructions 
• Pictures really are worth 1,000 words
• Screen shots are really helpful 
• Flow charts give a visual guide to decision making
• Really helps, forces to ask right question 
• Make the most of white space and headings
• Must be easy to focus on 
• Reinforce items with use of font or layout (e.g. Box around important element) 
• E.g. Boxes around warnings 
• If terms repeated frequently, think of short form which can be used consistently 
• ‹ Enter › rather than Press enter key 
• Have procedures read by lefties, sometimes we are too right-hand oriented
• Use page protectors for items consulted often 

Sample manuals 

Roger Williams Library https://web.archive.org/web/20040223192022/http://library.rwu.edu/circmanual.pdf University of Wisconsin-Madison Library http://college.library.wisc.edu/cpm/intro.html

What is Total Quality Management and What is it doing in my library?

Warnken, Paula N. “What is Total Quality Management and What is it doing in my library?” The U*N*A*B*A*S*H*E*D Librarian, no. 85, pp. 9-10.

PART I: What Is Total Quality Management?
Everyone is talking about Total Quality Management (TQM) and its earliest and most well-known spokesperson, W. Edwards Deming. In the past year the media have focused considerable attention on this management phenomenon. Public television has featured several programs on the “Quality” movement, including an hour program profiling Deming’s life and career. In 1991 Business Week devoted an entire issue to Total Quality Management, and the cover story of May, 1992 issue of Nation’s Business was also about TQM. That same month Library Journal published an article by Terry and Kitty Mackey about applying the Deming approach to libraries. There’s even a journal, Quality Progress, devoted to the principles of Quality Management. So Total Quality is moving toward total coverage – from manufacturing to health care to education and libraries!

Although this widespread attention has been relatively recent, the concept of Total Quality Management has been around at least since the 1940’s, shortly after World War II. It was then that W. Edwards Deming went to Japan and introduced to the Japanese his 14-point management system that is the basis of today’s Total Quality Management principles.

What is Total Quality Management? In its simplest terms, it is a management approach that assumes long-term success comes through making decisions based on facts, and with the goal of ensuring customer satisfaction. The success of such a program is based on the participation of all members of an organization in improving processes, products, and the culture in which the members work.

The term “Total Quality Management” was initially coined in 1985 by the Naval Air Systems Command to describe its Japanese-style management approach to quality improvement, but the ideas have been advocated and practiced since shortly after World War II.

Although Deming is the best known advocate of Total Quality management, there are several others who have contributed to the ideas of quality. Dr. Joseph Juran has been influential in quality improvement since the 1930’s. Juran offers a ten-point management system to improve quality, one step at a time.

Dr. Kaou Ishikawa was the most influential quality advocate from the 1940’s through the 1960’s. He advocated the use of simple statistical and graphical tools and he developed the concept of Quality Control Circles, which is the basis of “empowerment” that we hear so much of today.

Dr. Armond Feigenbaum was the first American to look at quality as a company-wide effort, and his approach served as the fore-runner of today’s Total Quality Management.

Dr. Genichi Taguchi developed the Taguchi Loss Function, which determine factors that can be altered to ensure the best and most predictable quality. This Loss Function is the theoretical basis for Continuous Improvement, integral to the Total Quality Management philosophy.

Philip Crosby, the fifth person closely associated with today’s Quality Movement, began his quality career by advocating Zero Defects, a thesis imploring workers to make fewer mistakes. Crosby’s theories measure quality by determining the cost of defects. Crosby, lik many of the other Quality advocates, streses the importance of employee training.

So, just what does it mean to practice Total Quality Management? It means you must be committed to the process of developing an organization based on your customers’ needs. It means you must give employees the responsibility of making their own decisions – with the purpose of continually improving. They in turn will analytically evaluate how well the processes they are involved in do contribute to meeting customer needs. There are five basic elements involved in the development of such an organization.

1. A systems approach is an integral component of TQM. Deming places most responsibility for Quality on management and the overall “system”. The “system” is what delivers what the customers want. A systems approach looks at individual departments in the context of the entire organization. You must break down barriers among departments. A problem in circulation may well be related to a policy in technical services.

You must look at the library’s mission and relate all department goals to that mission. Departments in your library must work as a team – or at the very least teams in the same league.

Deming has an “80/20 rule.” 80% of an organization’s problems are “system” problems. Only 20% of the problems are due to employees. In recent years he has changed that to the “95/5 rule.” You cannot address problems involving individual employees or departments without thinking of the system as a whole.

2. Empowering employees is another aspect of the TQM management philosophy. The word “empower” literally means to give power to, to authorize, to enable. People are born with intrinsic motivations to learn, to be innovative and creative, to develop positive relationships and self-esteem. Deming believes that traditional management grinds these motivations out of people by making decisions and establishing priorities for employees, and by creating competition through rankings, ratings, and personnel appraisals.

You must give people the responsibility and authority to solve problems at the level at which they arise. If there’s a dispute over a fine, let the circulation assistant attempt to resolve it. This approach builds self-esteem and motivates employees to make their best efforts.

In order for such delegation to work, there must be adequate training, which is an important part of empowerment. People require the resources necessary to do their jobs well. This includes not only relevant training, but also sufficient staff, work space, equipment and supplies.

Another key factor in successful empowerment is communication. Managers must communicate to know what employees’ needs and concerns are, and to let employees know what management’s priorities are. Good communications involve both group and one-on-one interaction, and are essential if employees are to be motivated to work at their highest potential, or to be empowered.

3. Total Quality Management challenges us to make decisions based on facts. It is important to collect and analyze good data. Ishikawa and Deming both advocate the use of statistical and graphical tools. Juran pioneered the use of Pareto charts, which are a graphic way of looking at the frequency of problems and factors. TQM also recommends use of statistical tools such as cause-and-effect diagrams, check sheets, control charts and flow charts to help organizations understand and improve processes.

4. A Quality organization must know its customers and their needs. That is not to say a library will be open every hour its patrons request, or purchase every requested book or journal. It does mean that libraries find out from their customers what their needs are, and make decisions based on a thorough understanding of who the customers are and what they have expressed as their needs.

5. Finally, Total Quality Management challenges organizations to continuously improve. TQM is not a project that has a beginning and a definable end. TQM is a process that continues. Policies and procedures constantly need to be reviewed and revised. We must get away from the “because that’s how it’s done” mentality.

TQM practitioners often use something known as the “PDCA Cycle,” sometimes referred to as the Deming Cycle. PDCA stands for Plan, Do, Check, Act. Using this cycle, an organization plans for changes, does the changes on a small scale, checks on the results to determine what was learned, and acts to apply the lessons learned, making them permanent. The PDCA cycle continues, incorporating changes from the previous cycle.

That’s an overview of Total Quality Management. Many of the principles are based on commonsense, and many practices have been around for some time. Xavier University Libraries had actually been implementing TQM for some time, without labelling it as such. The Dean of the Business College, hearing of some of the libraries activities, commented on how impressed he was that Total Quality Management was being implemented in the library.

What the library has been defining as a “customer approach” to services, and its subsequent efforts to identify and determine how we were meeting customers needs, was indeed Total Quality Management.

---Paula N. Wanken
Director of Libraries
Xavier University
Cincinnati, Ohio
(9/92)

Administrators’ Update. Library Administration and Management, v. 11 (Summer 1997): 130-131.

Administrators’ Update. Library Administration and Management, v. 11 (Summer 1997): 130-131.

President's Column
In my final article in the series “High Performing Teams for the New Millennium,” I’d like to discuss the necessity of providing highest quality service to library customers. Satisfying and delighting our customers must be our number-one priority. While libraries may offer comprehensive collections, inviting buildings, and access to the information superhighway, if our customers are not pleased it really means nothing. To be successful, quality service must be perceived from the customer’s point of view and not the library’s.

Customer service has been an important issue to libraries since Hardy Franklin adopted customer service as the “heart of a library” during his term as ALA President. Franklin suggested that libraries identify users’ needs and provide them service with a friendlier attitude. He recommended that libraries eliminate terms such as patrons or users because of their negative connotations and call customers (because library patrons are “paid-up customers”) customers.

Making “quality service” work depends on having staff who are willing and trained to deliver this service, and who have the power to satisfy customers. Staff must be empowered, and management must allow them to take risks without punishment. They must be given the tools to build their self-confidence if a customer service program is to thrive. I think that libraries should follow the example of Nordstorm’s, which has only one rule for staff in making customer service decisions: “Use your good judgement.” We need to make heroes and sing the legends of librarians who “break the rules” and do something extraordinary to satisfy our customers.

Technology has probably raised customer expectations. Even though people grumble about navigating through voice message systems, technology has given customers the taste of instant gratification. It has also enabled librarians to deliver a higher level of information and services than was delivered previously. Today when a customer comes to the desk in search of a book not on the shelf he may hear, “The book is not on the shelf? My terminal tells me that it is on loan for another four days, and we can put a hold on it for you. You will be automatically notified by telephone when the book becomes available, and the book will be waiting for you at the reserve desk. May I do anything else for you?”

Organizational structure needs to be designed to create teams that work together to satisfy customers. Organizational communication and decision-making networks should guide behaviour that reinforces customer satisfaction.

Once excellent customer service has become part of the organizational culture, the staff is quick to correct those employees who do not share the common service standard. Over time this causes the culture of service to be reinforced. The beliefs, values, and assumptions of the library can create an organization where extraordinary customer service is the normal operating procedure.

Following are some things to keep in mind in developing a customer-driven organization:

• Make sure that commitment to quality service is etched in your library’s mission statement.
• Identify both your internal and external customers. 
• Find out what your customers want and expect from the library.
• Make sure that everyone in the library is committed to quality service. If commitment does not start at the top, it won’t take place at the service desk.
• Provide training so that staff can provide excellent service. Do roleplaying, videotape service interactions, provide supportive feedback after a difficult customer interaction. Skills need to be reinforced and training should be ongoing. Continuous staff training will always be needed. Indeed, many people enter librarianship because they feel they will be buffered from some of the unpleasantness of dealing with difficult people (which we know isn’t true)!
• Make sure that library staff have the authority to make on-the-spot decisions to ensure customer satisfaction.
• Serving customers needs to be built into tasks or work assignments. Put library customer needs ahead of your own at all times. Look like you want to be “bothered.” Customers are often reluctant to bother staff working at a service desk reading a journal. Staff need to recognize customers, smile, and provide a service interaction that is pleasant. Librarians are people who bring people and information together, and the process should be joyful for both sides.
• Every once in a while check to see how you are doing by taking a fresh look at the service you are providing from the customer’s point of view. Walk around your buildings and watch what is happening. Listen to and respond to customer letters and phone calls. 
• Visit stores and agencies that provide both good and bad customer service. Ask what the key to god service is, and what should be avoided. There are many excellent organizations that libraries can use as models.

Thomas L. Brown, in an article in Industry Week entitled “A Job for Management: Eliminate the Hassles,” (Thomas L. Brown, “A Job for Management: Eliminate the Hassles,” Industry Week 242 (Sept. 20, 1993): 23) summed it up well: Don’t make me wait, especially when you’re ready to do business right now. Don’t make me work around your cumbersome processes. And don’t make me slog through pages of rules and regulations if I just want to get a simple answer.” Good advice for us all.

I enjoyed my term as LAMA president. LAMA is a great organization because of the people who participate and the staff who support it. I have made many new friends and learned a lot during my term, which is what we should desire and expect from life. I hope that these four columns help you develop “High Performing Teams for the New Millennium”—Bill Sannwald.

MBO by any other name is still MBO

Romani, Paul N. “MBO by any other name is still MBO.” Supervision; Dec. 97, Vol. 58, Issue 12, p. 6, 3 p.

MBO philosophy
MBO by any other name is still MBO
In the literature on management science there are few concepts as frequently mentioned and, simultaneously, as widely misunderstood as management by objectives (MBO). Most who come upon the phrase for the first time invariably say, “Is there any other way to manage?” Yes, there is. Even the “inventor” of the term ‘management by objectives’ is misidentified more often than not. Most persons give credit to Peter Drucker. Others, George S. Odiorne, who authored a text with that title in 1965. But the term was coined first by Alfred P. Sloan in the early 1950’s. Drucker’s contribution was to place the term in a central position and add flesh to its bones by emphasizing the results of managerial actions rather than the supervision of activities. Thus, he introduced the present conceptualization of MBO to the world. His vehicle: the 1954 classic The Practice of Management.

First, it is important to remember that MBO is a philosophy. It is not a step-by-step prescription for running any business. Secondly, MBO encompasses the idea that a business has many objectives and all businesses do not have the same objectives. There is only one common to all – “the customer is king.” That is, the core purpose of a business is to satisfy the customer. Third, MBO shifts the focus of management though to productivity – output – away from work efforts – inputs. The key question then becomes: “What is the objective toward which we are working?” Expressed differently, Drucker saw management that concentrated on processes – rather than goals – as inadequate to meet today’s challenges from foreign and domestic competition. Process-oriented management, dating back to Adam Smith’s 1776 volume The Wealth of Nations and extending beyond Frederick W. Taylor to the Hawthorne studies in this century, was adequate for that 150-year span. Old-time managers were expected to learn the ins and outs of a business and to keep people busy. MBO shifts the focus to goals, to the purpose of the activity, rather than the activity itself. The operative question shifts from “What am I supposed to do?” to “What is the objective toward which I am working?”

As is the case with most seemingly straightforward ideas, there have developed cleavages between the way Drucker conceived MBO, the way others have promulgated it, and the way it is practiced. Under the concept, Drucker wished managers to be accountable for results, not activities. The number of meetings they attended, reports generated and other measures do not count. What is crucial is how those activities pay off in terms of contributing to the objectives of the organization. There are no smoke and mirrors to the concept; it is not meant to give managers a sense of participation – real or phony. By definition, managers have responsibility. Thus, managers know the purpose of MBO, and the goals of the unit of which they are a part (e.g., sales units, etc.) because MBO encompasses the idea of participation in individual goal-setting. Managers also have control over the way the goals are achieved. A unique feature of MBO is that the control is self control. With objectives being the objective word, not management, self-control implies enhanced freedom to choose and to act. If behavioural science has taught us anything, it is that all wish freedom to participate more fully in work situations and to share ideas. MBO encourages sharing and harmony.

Those who misunderstand MBO or give it lip service include some of the Nation’s foremost CEOs. This is unfortunate because business is complex and tough. Some managers never tire of hearing and reading about things that may enable them to see a little more clearly and be a little more successful. MBO can do both. A little more concentration on its proper application could result in real dividends to many firms. Not only financial dividends, but those associated with increased employee esteem, development of goals by teams of employees, self-control rather than management pressure to perform and the motivation that often accrues when information is shared more widely.

Following are some negative reactions to MBO found in three of the most quoted management texts available at this time:

Steve Jobs, co-founder and chair of the board of Apple Computer, is quoted in Naisbitt and Aburdene’s bestseller Reinventing the Corporation as saying: “The way we run Apple is by values. You’ve heard of management by objectives? We don’t use that management system. Apple’s the fastest growing company in American corporate history and when you’re growing that fast, the only thing you can do is hire incredibly great people and let them go to it. In general, we hire people who were to tell him what to do didn’t have a firm grasp on what they were to do.

In Beyond Quality, Bowles and Hammond speak to CEOs “consigning quality improvement to the executive closest, alongside “excellence” and “management by objectives” and all the other quick-fix management toys of Christmases past.”

Equally hard on MBO is Reengineering the Corporation. Hammer and Chompy state that: “not one of the management fads of the last twenty years – not MBO, diversification, zero-based budgeting, Theory Z, matrix management, value chain analysis, decentralization, quality circles, “excellence,” restructuring, portfolio management, or one-minute managing – has reversed the deterioration of America’s corporate competitive performance. They have only distracted managers from the task at hand.”

Hammer and Champy’s answer to the Nation’s competitive dilemma: “Companies must organize work around process.” To quote the authors: “We define a business process as a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.” Thus, as with MBO, outputs are the key. Later: “Under the influence of Adam Smith’s notion of breaking work into its simplest tasks and assigning each of these to a specialist, modern companies and their managers focus on the tasks in this process: receiving the order form, picking the goods from the warehouse, and so forth – and tend to lose sight of the larger objective, which is to get the goods into the hands of the customer who ordered them. The individual tasks within this process are important, but none of them matters one whit to the customer if the overall process doesn’t work – that is, if the process doesn’t deliver the goods.” Drucker could not have expressed these words any clearer. MBO, as a concept, emphasizes the future, is optimistic about it and how managers will cope with change. I see it, when properly applied, as the dominant concept in management today. It reminds me of an anecdote dating back over 150 years. In the 1830s de Tocqueville asked an American sailor why American ships were built to last for only a short time. The sailor replied that “the art of navigation is every day making such rapid progress, that the finest vessel would become almost useless if it lasted beyond a few years.”

One of the central problems today’s manager must face is that there are too many theories, not too few. Dozens appear in crowds of expert opinion and reports. All contain statistics (some contradictory) on most every aspect of every issue. Unfortunately, some of these theories are untried in real life situations, some in organizations dissimilar to the manager’s, some are the results of “studies” conducted by persons with no or little corporate experience and others are reformulations of theories already being used by companies with solid success records. Turmoil is the result of this bumper crop of new-found wisdom.

I am not a champion of MBO. But I have seen nothing on how to manage, organize and succeed which contains more wisdom than this 50 year-old concept. It avoids the criticism other concepts have suffered – too analytical, too quantitative, unconcerned with consumers inside and outside the organization, too conservative, too shortsighted or too uncreative. On the other hand, it has withstood the test of time (seven texts were written about MBO during the 1960s and 1970s), has been scrutinized by practitioners and theoreticians and hits the reason for an organization’s being squarely on the head – to satisfy a customer. Until a philosophy equally complete and personalized appears, MBO looks like the most sensible route to success for the thoughtful manager.

By Paul N. Romani
Paul N. Romani is President of R3, a consulting firm in Alexandria, Virginia, specializing in cost containment, proposal development and network selection and configuration. Earlier in his career, he served for nine years at the White House, three as deputy director of the computing center and six as director of administrative operations for the White House and the 17 agencies of the Executive Office of the President. He holds a doctorate in public administration and an MBA in information technology.