Building and

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Chapter 9

• Building and
• Sustaining
• Performance
• Excellence in
• Organizations

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Key IdeaIntroduction
A total quality strategy requires significant
changes in organization design, process, and
culture.
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Obstacles to TQ Implementations

• Lack of a strong motivation
• Lack of time
• Lack of a formalized strategic plan for change

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Selling 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 wont 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 Change

• Corporate culture is a companys value system and
  its collection of guiding principles
• Understanding culture and its importance
• Cultural values often seen in mission and vision
  statements

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Key IdeaOrganizational 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.
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Baldrige Core Values and Concepts

• Focus on the future
• Managing for innovation
• Management by fact
• Social responsibility
• Focus on results and creating value
• Systems perspective

• Visionary leadership
• Customer Driven
• Organizational and personal learning
• Valuing employees and partners
• Agility

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Cultural Change

• Change can be accomplished, but it is difficult
• Imposed change will be resisted
• Full cooperation, commitment, and participation
  by all levels of management is essential
• Change takes time
• You might not get positive results at first
• Change might go in unintended directions

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Key IdeaCultural 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.
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Building on Best Practices

• Universal best practices
• Cycle time analysis
• Process value analysis
• Process simplification
• Strategic planning
• Formal supplier certification programs

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Best Practices Infrastructure Design (1 of 3)

• Low performers
• process management fundamentals
• customer response
• training and teamwork
• benchmarking competitors
• cost reduction
• rewards for teamwork and quality

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Best Practices Infrastructure Design (2 of 3)

• Medium performers
• use customer input and market research
• select suppliers by quality
• flexibility and cycle time reduction
• compensation tied to quality and teamwork

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Best Practices Infrastructure Design (3 of 3)

• High performers
• self-managed and cross-functional teams
• strategic partnerships
• benchmarking world-class companies
• senior management compensation tied to quality
• rapid response

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Implementing Total QualityKey Players

• Senior management
• Middle management
• Workforce

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Developing Positive Quality Culture--Five Key
Behavior

• Create and maintain an awareness of quality.
• Must provide evidence of mgt leadership, such as
  serving on a quality council.
• Must encourage self-development and empowerment.
• Must develop opportunities for employee
  participation to inspire action.
• Must provide recognition and rewards.

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Key IdeaChange 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 Whats in it for me?
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Change Management as a Process

• Think of change management as a process.
• Three basic steps
• Questioning the organizations current state.
• Developing new approachesa state of flux.
• Institutionalizing the new behaviors and
  attitudes.

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Change Management at American Express

• Scope the change
• Why are we doing this?
• Create a vision
• What will the change look like?
• Drive commitment
• What needs to happen to make the change work?
• Accelerate transition
• How are we going to manage the effort?
• Sustain momentum
• How can we leverage what we learned?

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Strategic vs. Process Change

• 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.

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Contrasts
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Key IdeaImplementation 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.
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Implementation Barriers

• Lack of constancy of purpose
• Lack of holistic view
• Lack of understanding cultural issues
• Lack of alignment

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Common Mistakes in TQ Implementation (1 of 3)

• TQ regarded as a program
• Short-term results are not obtained
• Process not driven by focus on customer,
  connection to strategic business issues, and
  support from senior management
• Structural elements block change
• Goals set too low
• Command and control organizational culture

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Common Mistakes in TQ Implementation (2 of 3)

• Training not properly addressed
• Focus on products, not processes
• Little real empowerment is given
• Organization too successful and complacent
• Organization fails to address fundamental
  questions
• Senior management not personally and visibly
  committed

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Common Mistakes in TQ Implementation (3 of 3)

• Overemphasis on teams for cross-functional
  problems
• Employees operate under belief that more data are
  always desirable
• Management fails to recognize that quality
  improvement is personal responsibility
• Organization does not see itself as collection of
  interrelated processes

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Six Stages of Quality Life Cycle

• Adoption
• Regeneration
• Energizing
• Maturation
• Limitation or stagnation
• Decline

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Key IdeaLearning 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.
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Learning Organization

• Peter Senge
• an organization that is continually expanding
  its capacity to create its future.
• adaptive learning generative learning

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Learning Organization

• David Garvin
• an organization that is skilled at creating,
  acquiring, and transferring knowledge, and at
  modifying its behavior to reflect new knowledge
  and insights
• Peter Senge
• Leaders must develop the capability to integrate
  creative thinking and problem solving throughout
  the organization.

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Key Activities of Learning 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

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Key IdeaSelf-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.
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Self Assessment Basic Elements

• Management involvement and leadership
• Product and process design
• Product control
• Customer and supplier communications
• Quality improvement
• Employee participation
• Education and training
• Quality information

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Importance of Follow-Up of Self-Assessment Results

• Many organizations derive little benefit from
  conducting self-assessment and achieve few of the
  process improvements suggested by self-study
• Reasons
• Managers do not sense a problem
• Managers react negatively or by denial
• Managers dont know what to do with the
  information

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Key IdeaImportance of Follow-up
Following up requires senior leaders to engage in
two types of activities action planning and
subsequently tracking implementation progress.
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Leveraging Self-Assessment Findings

• Prepare to be humbled
• Talk through the findings
• Recognize institutional influences
• Grind out the follow-up

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Implementing ISO 9000

• Start with a quality policy that identifies key
  objectives and basic procedures
• Develop a quality manual to document the
  procedures
• Use internal audits to maintain procedures
• Provide adequate resources

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Implementing Six Sigma

• Committed leadership
• Integration with existing initiatives, business
  strategy, and performance measurement
• Process thinking
• Disciplined customer and market intelligence
  gathering
• A bottom line orientation
• Leadership in the trenches
• Training
• Continuous reinforcement and rewards