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Chapter 9Chapter 9Chapter 9Chapter 9

Building and Building and

SustainingSustaining

Performance Performance

Excellence inExcellence in

OrganizationsOrganizations

Key IdeaKey IdeaIntroductionIntroduction

A total quality strategy requires significant changes in organization design, process, and culture.

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Obstacles to TQ Obstacles to TQ ImplementationsImplementations

Lack of a strong motivationLack of a strong motivation Lack of timeLack of time Lack of a formalized strategic Lack of a formalized strategic

plan for changeplan for change

Selling the TQ ConceptSelling the TQ Concept

• Learn to think like top executives

• Position quality as a way to address priorities of stakeholders

• Align objectives with those of senior management

• Make arguments quantitative

• Make the first pitch to someone likely to be sympathetic

• Focus on getting an early win, even if it is small

• Ensure that efforts won’t be undercut by corporate accounting principles

• Develop allies, both internal and external

• Develop metrics for return on quality

• Never stop selling quality

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Corporate Culture and Corporate Culture and ChangeChange

Corporate cultureCorporate culture is a is a company’s value system and company’s value system and its collection of guiding its collection of guiding principlesprinciples

Understanding culture and its Understanding culture and its importanceimportance

Cultural values often seen in Cultural values often seen in mission and vision statementsmission and vision statements

Key IdeaKey IdeaOrganizational Culture & TQOrganizational Culture & TQ

Culture is reflected by the management policies and actions that a company practices. Therefore, organizations that believe in the principles of total quality are more likely to implement the practices successfully. Conversely, actions set culture in motion. As total quality practices are used routinely within an organization, its people learn to believe in the principles, and cultural changes can occur.

Baldrige Core Values and Baldrige Core Values and ConceptsConcepts

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

Cultural ChangeCultural Change

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

Key IdeaKey IdeaCultural ChangeCultural Change

Impatient managers often seek immediate cultural change by adopting off-the-shelf quality programs and practices, or by imitating other successful organizations. In most cases, this approach is setting themselves up for failure.

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

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Implementing Total Implementing Total Quality:Quality:Key PlayersKey Players

Senior managementSenior management Middle managementMiddle management WorkforceWorkforce

Developing Positive Quality Developing Positive Quality Culture--Culture--Five Key BehaviorFive Key Behavior

Create and maintain an awareness of Create and maintain an awareness of quality. quality.

Must provide evidence of mgt leadership, Must provide evidence of mgt leadership, such as serving on a quality council.such as serving on a quality council.

Must encourage self-development and Must encourage self-development and empowerment.empowerment.

Must develop opportunities for employee Must develop opportunities for employee participation to inspire action.participation to inspire action.

Must provide recognition and rewards.Must provide recognition and rewards.

Key IdeaKey IdeaChange ManagementChange Management

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?

Change Management as Change Management as a Processa Process

Think of change management as Think of change management as a process.a process.

Three basic stepsThree basic steps– Questioning the organization’s Questioning the organization’s

current state.current state.– Developing new approaches—a Developing new approaches—a

state of flux.state of flux.– Institutionalizing the new behaviors Institutionalizing the new behaviors

and attitudes.and attitudes.

Change Management at Change Management at American ExpressAmerican Express Scope the changeScope the change

– Why are we doing this?Why are we doing this?

Create a visionCreate a vision– What will the change look like?What will the change look like?

Drive commitmentDrive commitment– What needs to happen to make the change work?What needs to happen to make the change work?

Accelerate transitionAccelerate transition– How are we going to manage the effort?How are we going to manage the effort?

Sustain momentumSustain momentum– How can we leverage what we learned?How can we leverage what we learned?

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.

ContrastsContrasts

Key IdeaKey IdeaImplementation BarriersImplementation Barriers

Numerous barriers exist to successfully transform organizations to a sustained culture of total quality. Understanding these barriers can help significantly in managing change processes.

Implementation Barriers Implementation Barriers

Lack of constancy of purposeLack of constancy of purpose Lack of holistic viewLack of holistic view Lack of understanding cultural Lack of understanding cultural

issuesissues Lack of alignmentLack of alignment

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Common Mistakes in TQ Common Mistakes in TQ Implementation Implementation (1 of 3)(1 of 3)

TQ regarded as a “program”TQ regarded as a “program” Short-term results are not obtainedShort-term results are not obtained Process not driven by focus on customer, Process not driven by focus on customer,

connection to strategic business issues, connection to strategic business issues, and support from senior managementand support 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 TQ Common Mistakes in TQ 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 TQ Common Mistakes in TQ 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

Six Stages of Quality Life Six Stages of Quality Life CycleCycle

AdoptionAdoption RegenerationRegeneration EnergizingEnergizing MaturationMaturation Limitation or stagnationLimitation or stagnation DeclineDecline

Key IdeaKey IdeaLearning OrganizationsLearning Organizations

Organizations have both dynamic and static components.

Organizations are dynamic entities. Managers must consider the dynamic component in order to deal with instability in the environment, imperfect plans, the need for innovation, and the common human desire for variety and change.

Learning OrganizationLearning Organization

Peter SengePeter Senge

… … an organization that is continually an organization that is continually expanding its capacity to create its expanding its capacity to create its future.future.

adaptive learning & generative adaptive learning & generative learninglearning

Learning OrganizationLearning Organization

David GarvinDavid Garvin… … an organization that is skilled at an organization that is skilled at

creating, acquiring, and transferring creating, acquiring, and transferring knowledge, and at modifying its behavior knowledge, and at modifying its behavior to reflect new knowledge and insights…to reflect new knowledge and insights…

Peter SengePeter SengeLeaders must develop the capability to Leaders must develop the capability to integrate creative thinking and problem integrate creative thinking and problem solving throughout the organization.solving throughout the organization.

Key Activities of Learning Key Activities of Learning OrganizationsOrganizations 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

Key IdeaKey IdeaSelf-Assessment ProcessSelf-Assessment Process

Self-assessment should identify both strengths and opportunities for improvement, creating a basis for evolving toward higher levels of performance. Thus, a major objective of most self-assessment projects is the improvement of organizational processes based on opportunities identified by the evaluation.

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

Key IdeaKey IdeaImportance of Follow-upImportance of Follow-up

Following up requires senior leaders to engage in two types of activities: action planning and subsequently tracking implementation progress.

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

Implementing ISO 9000Implementing ISO 9000

Start with a quality policy that Start with a quality policy that identifies key objectives and basic identifies key objectives and basic proceduresprocedures

Develop a quality manual to Develop a quality manual to document the proceduresdocument the procedures

Use internal audits to maintain Use internal audits to maintain proceduresprocedures

Provide adequate resourcesProvide adequate resources

Implementing Six SigmaImplementing 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