1 chapter 11 performance excellence and organizational change
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Chapter 11Chapter 11Chapter 11Chapter 11
Performance Performance Excellence and Excellence and Organizational ChangeOrganizational Change
Organizational Change Organizational Change RealitiesRealities
Organizations contemplating change must answer some tough questions, such as, Why is the change necessary? What will it do to my organization (department, job)? What problems will I encounter in making the change? and perhaps the most important one — What’s in it for me?
Strategic vs. Process Strategic vs. Process ChangeChange Strategic change is broad in scope and
stems from strategic objectives, which are generally externally focused and relate to significant customer, market, product/service, or technological opportunities and challenges.
Process change is narrow in scope and deals with the operations of an organization. An accumulation of continuously improving process changes can lead to a positive and sustainable culture change.
Strategic vs. Process Strategic vs. Process ChangeChange
Cultural ChangeCultural Change
CultureCulture – – the set of beliefs and values shared by the people in an organization.
Cultural values often seen in mission and vision statements
Firms pursuing TQ often need cultural change
Elements of a Performance Elements of a Performance Excellence CultureExcellence Culture
Visionary leadership
Customer Driven Organizational and
personal learning Valuing employees
and partners Agility
Focus on the future Managing for
innovation Management by fact Social responsibility Focus on results and
creating value Systems perspective
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Why Adopt a Why Adopt a Performance Excellence Performance Excellence Philosophy?Philosophy? Reaction to competitive threat Reaction to competitive threat
to profitable survivalto profitable survival An opportunity to improveAn opportunity to improve
Requirements for Building Requirements for Building and Sustaining Performance and Sustaining Performance ExcellenceExcellence Readiness for changeReadiness for change Sound practices and Sound practices and
implementation strategiesimplementation strategies Effective organizationEffective organization
Perspectives on Cultural Perspectives on Cultural ChangeChange
Change can be accomplished, but it is Change can be accomplished, but it is difficultdifficult
Imposed change will be resistedImposed change will be resisted Full cooperation, commitment, and Full cooperation, commitment, and
participation by all levels of management participation by all levels of management is essentialis essential
Change takes timeChange takes time You might not get positive results at firstYou might not get positive results at first Change might go in unintended directionsChange might go in unintended directions
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People Roles in People Roles in Organizational ChangeOrganizational Change
Senior managementSenior management Middle managementMiddle management WorkforceWorkforce
Transforming Middle Transforming Middle Managers to Change Managers to Change AgentsAgents EmpowerEmpower Create a common vision of Create a common vision of
excellenceexcellence Create new organizational rulesCreate new organizational rules Implement continuous Implement continuous
improvementimprovement Develop and retain peak Develop and retain peak
performersperformers
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Common Mistakes in Common Mistakes in Implementation Implementation (1 of 3)(1 of 3)
Change is regarded as a short-term Change is regarded as a short-term “program”“program”
Compelling results are not obtained quicklyCompelling results are not obtained quickly Process not driven by focus on customer, Process not driven by focus on customer,
connection to strategic business issues, and connection to strategic business issues, and support from senior managementsupport from senior management
Structural elements block changeStructural elements block change Goals set too lowGoals set too low ““Command and control” organizational Command and control” organizational
cultureculture
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Common Mistakes in Common Mistakes in Implementation Implementation (2 of 3)(2 of 3)
Training not properly addressedTraining not properly addressed Focus on products, not processesFocus on products, not processes Little real empowerment is givenLittle real empowerment is given Organization too successful and Organization too successful and
complacentcomplacent Organization fails to address Organization fails to address
fundamental questionsfundamental questions Senior management not personally and Senior management not personally and
visibly committedvisibly committed
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Common Mistakes in Common Mistakes in Implementation Implementation (3 of 3)(3 of 3)
Overemphasis on teams for cross-Overemphasis on teams for cross-functional problemsfunctional problems
Employees operate under belief that Employees operate under belief that more data are always desirablemore data are always desirable
Management fails to recognize that Management fails to recognize that quality improvement is personal quality improvement is personal responsibilityresponsibility
Organization does not see itself as Organization does not see itself as collection of interrelated processescollection of interrelated processes
Building on Best Building on Best PracticesPractices
Universal best practicesUniversal best practices– Cycle time analysisCycle time analysis– Process value analysisProcess value analysis– Process simplificationProcess simplification– Strategic planningStrategic planning– Formal supplier certification Formal supplier certification
programsprograms
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Best Practices: Best Practices: Infrastructure Design Infrastructure Design (1 of 3)(1 of 3)
Low performersLow performers– process management process management
fundamentalsfundamentals– customer responsecustomer response– training and teamworktraining and teamwork– benchmarking competitorsbenchmarking competitors– cost reductioncost reduction– rewards for teamwork and qualityrewards for teamwork and quality
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Best Practices: Best Practices: Infrastructure Design Infrastructure Design (2 of 3)(2 of 3)
Medium performersMedium performers– use customer input and market use customer input and market
researchresearch– select suppliers by qualityselect suppliers by quality– flexibility and cycle time flexibility and cycle time
reductionreduction– compensation tied to quality and compensation tied to quality and
teamworkteamwork
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Best Practices: Best Practices: Infrastructure Design Infrastructure Design (3 of 3)(3 of 3)
High performersHigh performers– self-managed and cross-functional self-managed and cross-functional
teamsteams– strategic partnershipsstrategic partnerships– benchmarking world-class benchmarking world-class
companiescompanies– senior management senior management
compensation tied to qualitycompensation tied to quality– rapid responserapid response
Quality Engines of Quality Engines of Baldrige WinnersBaldrige Winners
Self Assessment: Basic Self Assessment: Basic ElementsElements
Management involvement and Management involvement and leadershipleadership
Product and process designProduct and process design Product controlProduct control Customer and supplier communicationsCustomer and supplier communications Quality improvementQuality improvement Employee participationEmployee participation Education and trainingEducation and training Quality informationQuality information
Importance of Follow-Up Importance of Follow-Up of Self-Assessment of Self-Assessment ResultsResults Many organizations derive little benefit Many organizations derive little benefit
from conducting self-assessment and from conducting self-assessment and achieve few of the process achieve few of the process improvements suggested by self-studyimprovements suggested by self-study
Reasons:Reasons:– Managers do not sense a problemManagers do not sense a problem– Managers react negatively or by denialManagers react negatively or by denial– Managers don’t know what to do with the Managers don’t know what to do with the
informationinformation
Leveraging Self-Leveraging Self-Assessment FindingsAssessment Findings
Prepare to be humbledPrepare to be humbled Talk through the findingsTalk through the findings Recognize institutional influencesRecognize institutional influences Grind out the follow-upGrind out the follow-up
Knowledge ManagementKnowledge Management
The process of identifying, capturing, organizing, and using knowledge assets to create and sustain competitive advantage.
Knowledge assets refer to the accumulated intellectual resources that an organization possesses, including information, ideas, learning, understanding, memory, insights, cognitive and technical skills, and capabilities.
Types of KnowledgeTypes of Knowledge
Explicit knowledge includes information stored in documents or other forms of media.
Tacit knowledge is information that is formed around intangible factors resulting from an individual’s experience, and is personal and content-specific.
Organizational LearningOrganizational Learning
Create a “learning organization”Create a “learning organization”– PlanningPlanning– Execution of plansExecution of plans– Assessment of progressAssessment of progress– Revision of plans based on Revision of plans based on
assessment findingsassessment findings
Key Activities of Key Activities of Learning OrganizationsLearning Organizations Systematic problem solving Experimentation with new approaches Learning from their own experiences
and history Learning from the experiences and
best practices of others Transferring knowledge quickly and
efficiently throughout the organization
Internal BenchmarkingInternal Benchmarking
The ability to identify and transfer best practices within the organization
Process: – Identify and collect internal knowledge
and best practices– Share and understand those practices– Adapt and apply them to new situations
and bringing them up to best-practice performance levels.
Organizational Change Organizational Change for Six Sigmafor Six Sigma Committed leadershipCommitted leadership Integration with existing initiatives, business Integration with existing initiatives, business
strategy, and performance measurementstrategy, and performance measurement Process thinkingProcess thinking Disciplined customer and market Disciplined customer and market
intelligence gatheringintelligence gathering A bottom line orientationA bottom line orientation Leadership in the trenchesLeadership in the trenches TrainingTraining Continuous reinforcement and rewardsContinuous reinforcement and rewards
Organizational Change, Organizational Change, Learning, and Learning, and Organizational TheoryOrganizational Theory Reason for changeReason for change
– Traditional: productivity or job satisfactionTraditional: productivity or job satisfaction– TQ: customer satisfactionTQ: customer satisfaction
Source of changeSource of change– Both: top managementBoth: top management
Types of changeTypes of change– Traditional: limited in scope and durationTraditional: limited in scope and duration– TQ: continuous improvement over a long TQ: continuous improvement over a long
period of timeperiod of time
Principles for Managing Principles for Managing ChangeChange
Unfreeze attitudes and behaviorUnfreeze attitudes and behavior Have effective leadershipHave effective leadership Manage interdependenceManage interdependence Involve the peopleInvolve the people Refreeze to make gains Refreeze to make gains
permanentpermanent