An association in the test of time

Peter Schütz, you were President of the SAQ from 1998 to 2004. How does a chemist get involved in the SAQ?

Contactor: I originally came from research and then went into production at Ciba-Geigy, where I was responsible for the Pigments Division for 20 years, so I was right in the middle of the quality efforts that always started in production.

But that still doesn't explain joining the SAQ ...

Contactor: As CEO of Ciba-Geigy, my boss at the time, Heini Lippuner, was one of the founding members of the European Foundation for Quality Management (EFQM). He encouraged me to fly to Orlando, USA, for 10 days with a dozen colleagues from Ciba-Geigy. Philip Bayard Crosby, then the pope of the whole quality movement, lived there. We attended a course at his Quality Academy and were all totally enthusiastic.

And with that, the SAQ had become topical for you?

Contactor: Mr. Lippuner said to me: "Listen, someone from Ciba-Geigy should join this SAQ association and get involved in quality management - which I did. First I became a member of the board and in 1998 I took over the presidency of the SAQ.

Jürg Saxer, were you also delegated to the association by your company?

Saxer: Not to the SAQ, but to the Swiss Association for Quality and Management Systems SQS. I came to quality management in 1990 because we, i.e. the dyestuffs division of Sandoz AG, came under pressure from our English subsidiaries. They said: You have to be certified according to ISO 9001 if you want to continue supplying us.

And with the ISO standard, the Sandoz Group in Basel was entering rather uncharted territory at the time?

Saxer: Yes, first we had to find out what ISO actually was, and then we were told that SQS, as a large certification company, had long wanted someone from the chemical industry on its board. And because ISO certification at Sandoz fell within my area of competence, it was "march, march", you're now going to join this SQS. From 1990 onwards I was a member of the Management Board, and even after retirement I remained a representative of the chemical industry on the SQS Management Board until 1997.

Was the SAQ in full bloom when you took over as president?

Contactor: For a long time, the SAQ was a rich, prosperous association. We had 2600 members and made a turnover of 6 million. The association had done very good business in the 80s and 90s. And it had so many members because in the beginning it was the only educational institution for the development of a QM system certifiable according to ISO standards. In addition, the contacts in the association with its 10 sections were helpful and instructive.

But then it started to get harder?

Contactor: When I came, the association was already past its maturity. Many companies said: Now we know that, business is not so good anyway, we are certified, so we don't get involved there as before. And with that, the training went downhill. People had taken the courses, they had gotten what they wanted on good terms, and they saw no reason to be members any longer.

SaxerThe decline in sales was dramatic. We had gone from 6 million down to 2 million in a few years. But the organization was geared to 6 million. We had probably reacted too slowly to that. This resulted in losses.

And the new president had to deal mainly with economic problems?

Contactor: The SAQ was and is a special association, one that runs a business. Most associations did not do that at that time. The pure life of the association took place in the sections. For me, 90 percent of the work in the SAQ was the struggle for survival of a company.

And that's where you came in as a lawyer - with an analysis commissioned by the SAQ board ...

Saxer: Yes, it was about taking stock of all the SAQ's activities - with an outlook and perspectives. This required a comprehensive analysis of documents, balance sheets and numerous interviews. In February 1999 I was able to present it to the board.

Can you briefly mention the most important results?

Saxer: As already mentioned, the demand for training has clearly declined. For 10 years the training market had grown explosively. At the same time, the number of course providers had increased. There was a lot of competition - from the universities of applied sciences, all of which were desperately looking for income because they had to finance themselves to some extent. But consultants were also giving more and more of their own training courses. There were many consultants among the SAQ trainers. The courses were a unique opportunity to get clients. Handing out business cards became almost more important than the quality of the courses. This often caused bad blood.

So the supply grew, the SAQ lost its monopoly position of the 80s and 90s.

Saxer: And she had only belatedly realized that she no longer had them. The organization had not adapted to the changed circumstances.

Were there any other weaknesses within the association?

Saxer: I was able to uncover various duplications that were costing money. And in my contacts with the sections, the impression arose that too little was offered to the members. The sections complained about too little support from the association leadership - both professionally and financially. Things are better now, though not ideal, but at the time these were things that caused some annoyance. At the time, the SAQ was in the throes of TQM fever, the precursor to business excellence. That largely bypassed what members wanted.

A steep accusation that the orientation towards TQM is to blame for the misery ...

Saxer: Not alone, but at least it contributed to it. At that time, normal companies had little interest in TQM because of the high effort involved; they were already satisfied if they were somewhat qualified for ISO 9001. With TQM an elitist thinking came into quality management, that was not so popular and probably is not today.

Contactor: The conflict was then as it is today: Is this high personnel commitment worthwhile in order to make progress in TQM? In the chemical industry, for example, many independent group companies had internal quality systems at a high level, but often completely different ones, oriented towards American QM systems. There, the processes play the decisive role. These group units did not want to be instructed by an association in any way. And therefore regarded TQM with its many requirements almost as an imposition.

What conclusions were drawn from Jürg Saxer's analysis?

Contactor: We realized we were running a business. We were always looking for partners, companies we could acquire, or joint ventures so we could have a second leg to stand on. Training wasn't going well anymore. So we wanted to go into consulting, because that's where we thought we could really make money.

What specifically happened then?

Contactor: In our search for contacts, we first came across Qualicon AG, which was the largest organization in quality consulting at that time. But Qualicon was unfortunately not interested in certain business that was important for SAQ and that we wanted to continue. So we had to abandon the exercise.

The next step was the foundation of Neosys AG in autumn 2001.

Saxer: Yes, as a joint venture between SAQ and the Swiss Electrotechnical Association (SEV), now Electrosuisse. The SEV had already had its eye on Dr. Graf AG Umweltschutz-Beratung in the past and then realised that yes, it didn't fit in with us at all. The experts at Graf felt the same way. Our interest in SAQ came at just the right time. We got together and founded Neosys AG, based in Gerlafingen.

For a long time, however, the two mothers' clubs were not happy with the new daughter ...

Contactor: That's right, of course we had high hopes for them. We had given our training part to Neosys and the SEV had given its advice to Graf AG, in the area of environment, safety, risk. We thought that if we succeeded in combining the two cultures, SAQ and SEV, in Neosys AG to form a powerful and motivated organisation, we would have new economic prospects.

But after two years, it was over.

Contactor: In a nutshell: The former Neosys was an unmanageable company because the areas we took over consisted of consultants, i.e. "single masks". They told us at every opportunity: If something doesn't suit you, I can set up my own business, I have the knowledge, I know my customers, I don't need you. It quickly became clear that this was a hopeless business.

In the meantime Neosys AG has become a successful company.

Saxer: That's right. Jürg Liechti, the boss, bought himself out of Electrosuisse and made Neosys independent. Now Neosys is an independent public limited company. With Liechti as the main shareholder. A process that often happens in industry.

And how did the SAQ get out of the Neosys adventure?

Saxer: We sat down with the friends of Electrosuisse. They were interested in business, but hardly in quality management. So we decided to split up without any problems and in a spirit of solidarity. Nobody paid anything. We bore each other's losses. That was it.

Contactor: At the same time, we resumed contact with Qualicon. The company still represented a good solution for us, even with the company headquarters in Kirchberg. Only later, when it came to the opening balance sheet, did we find out that they were doing just as badly economically as we were.

Saxer: Both parties were pretty much out of water, which made them relatively willing to compromise in the negotiations. Together we managed to get an opening balance sheet for SAQ-Qualicon AG. That required some creativity.

"For SAQ, this merger represents the best of all possible solutions," you wrote, Peter Schütz, in December 2003. Were there no alternatives?

Contactor: "No alternative", almost like Mrs Merkel. There were no other companies that interested us and wanted to have something to do with us. SAQ-Qualicon AG has successfully pursued the vertical integration of training and consulting to this day. And with the company headquarters in Kirchberg, where the SAQ office also moved to, we could say at that time: Now we have a promising home.

How have SAQ members reacted to the launch of the new company?

Contactor: That was the most difficult part. We are not an AG, but an association. How can we make the decisions as soon as possible to get out of the Neosys trap and start something new?

I remember this turbulent AGM in Olten in November 2003 ...

Contactor: We had prepared ourselves meticulously for this extraordinary general meeting. We knew the opponents of the new solution and were able to plausibly refute their arguments. And our managing director, Hans Rudi Gygax, was fully behind us. With the winning vote, the way was then clear for SAQ-Qualicon AG. But before that, we had to take a lot of criticism.

For example?

Contactor: We had to admit that we had slid into the Neosys story too euphorically. And I had to put up with the question: How can you buy a company that's all brains and no hardware? That leaves you pretty helpless ...

Let's move on to the current situation. The SAQ is now based in Bern and is in the black ...

Saxer: The turnaround came with Peter Bieri, the new managing director. He understood how to get an ailing organization back on track within two years. He was able to completely buy back the two subsidiaries, ARIAQ SA and SAQ-Qualicon AG, which were only 50 percent owned by SAQ, with his own funds.

Contactor: If you notice that we are now back to where we started with the SAQ, you could almost say that we were able to adapt to the difficult circumstances with a lot of "trial and error" but ultimately successfully.

Is this typical for associations?

Saxer: You have to distinguish between associations and sectoral organisations. The latter are usually doing quite well, but the associations are almost all suffering from emaciation.

ContactorIn the case of SAQ, this heterogeneous mix of association and business weighs heavily. With association legislation, it is difficult to run a business dynamically. Saxer: You have to be able to finance both. Membership fees make up about 50 percent of our total income. We have about 1600 members now. The rest has to come from business activity. With the personal certification, which is developing rapidly, the SAQ has achieved a great success.

Doesn't that lead to conflicts with the SQS?

Saxer: No, the SQS certifies organisations, not individuals.

Finally, a look into the future: Do we still need an association for quality?

Contactor: It is certainly not a bad idea for the quality movement to unite in an association of experts and managers who meet regularly and exchange professional views. Many quality managers complain that they are often isolated in business, without direct customers and without publicity. In the SAQ they have a home, find their identity and appreciation, and can continue their education.

Saxer: Yes, but still: one has to ask the question how the SAQ should orient itself. What is actually the core task of the SAQ?

And do you have an answer to that?

Saxer: Fortunately, quality management is no longer just a question of specialists. Quality is part of the company, not only in terms of products, but also in terms of processes, organization, development and management style.

One quality manager no longer covers all areas?

Contactor: Everything boils down to a separation of classic quality assurance, i.e. measuring, testing and error management on the one hand and quality management on the other. Quality runs primarily in the people who produce. Quality management as a management tool encompasses the entire organization. That's why SAQ has a different significance today than it did in the past, when it was an association for specialists only.

Which one?

Saxer: Maybe as a quality ambassador for Switzerland? That's what they're trying to do. I am very much looking forward to the next "Swiss Quality Day".

Mr. Schütz and Mr. Saxer, thank you very much for this open discussion.