BUILDING AND SUSTAINING TOTAL QUALITY ORGANIZATIONS

CHAPTER 9

MAKING THE COMMITMENT TO TQ

◦TOP 3 OBSTACLES TO TQ:

1. Lack of a strong motivation.2. Lack of time to devote to

quality initiatives.3. Lack of a formalized strategic

plan for change.

BALDRIGE ‘S TOP 10 TQ CONCEPT TO SENIOR LEADER:

1.Learn to think like top executives who are paid, after all, to satisfy the concerns of three key groups of stakeholders: customers, investors and employee.

2.Position quality as a way to address the priority goals of these three groups of stakeholders.

3. Align your objectives with those of senior management. If the organization’s goal’s is to reduce cycle time, show how your program will reduce cycle time. If the goal is to increase market share, show how your plan will do that.

4. Make your arguments as quantitative as possible.

5. When approaching top management, make your first pitch to someone who is likely to be sympathetic to your proposal.

6. Focus on getting an early win, even if it’s a small one.

7. Be sure your effort won’t be undercut by corporate accounting policies that may exaggerate the costs of quality or fail to recognize its full financial benefits.

8. Develop allies- both those who are internal and can land credibility to your position and those who are external and can tell how quality improved the bottom line at their organizations.

9. Develop metrics for return on quality, so you can show your efforts are paying off.

10. Never stop selling quality.

ORGANIZATIONAL CULTURE AND TOTAL QUALITY

◦Any organizational activity can be viewed in one of three ways, depending on the intensity of commitment to the activity:

1. Function 2. Process 3. Ideology

CULTURE-(often called corporate

culture) is an organization’s value system and its collection of guiding principles.

-cultural value are often seen in the mission and vision statement of the organizations.

CORE VALUES AND CONCEPTS BALDRIGE’S CRITERIA

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

TQ PHILOSOPHY AT PROCTOL AND GAMBLE THAT FOCUSES ON DELIVERING SUPERIOR CUSTOMER SATISFACTION AND BOILS DOWN RO FOUR (4) PRINCIPLES

Really know our customers and consumers.

Do the right things right. Concentrate on improving

system Empower people.

FUNDAMENTAL BELIEFS ABOUT QUALITY OF AMERICAN EXPRESS QUALITY LEADERSHIP APPROACH

Quality is the foundation of continued success.Quality is a journey of continuous

improvement and innovation.Quality provides a high return, but requires

the investment of time and resources.Quality requires committed leadership.Quality begins by meeting or exceeding the

expectations of customers and employees.Quality requires teamwork and learning at all

levels.Quality comes from the energy of a diverse

community of motivated and skilled people who are given and take responsibility.

FIVE UNIVERSAL BEST PRACTICES

1. Cycle – time analysis2. Process value analysis3. Process simplification4. Strategic planning5. Formal supplier certification

programs

THREE MEASURES OF PERFORMANCE Low performers – those with less than 2

percent ROA (return on assets) and $53,000 VAE (value added per employee) and low quality – can reap the highest benefits by concentrating on fundamentals.

Medium performers – those with ROA from 2 to 6.9 percent VAE between $53,000 and $84,000, and medium quality levels – achieve the most benefits from promoting department – level improvement teams, training employees in problem solving and other specialized topics,

listening to supplier suggestion about new products, emphasizing the role of enforcement for quality assurance, making regular and consistent measurement of progress and sharing quality performance information with the middle management, and emphasizing quality as a key to the company’s reputation.

High performer – with ROA exceeding 6.9 percent VAE over $84,000 and high quality levels respectively – gain the most from providing customer – relationship training for new employees, emphasizing quality ad teamwork for senior management assessment,

encouraging widespread participation in quality meeting among non management employees, using world – class bench marking, communicating strategic plans to customers and suppliers, conducting after – sales service to build customer loyalty, and emphasizing competitor- comparison measures and customers satisfaction measures when developing plans.

THE ROLE OF EMPLOYEES IN CULTURAL CHANGE

◦ Juran’s suggest five key behavior to develop a positive quality culture:

1. It must create and maintain an awareness of quality by disseminating results throughout the organization.

2. It must provide evidence of management leadership, such as serving on a quality council, providing resource, or championing quality projects (Six Sigma for example)

3. The company must encourage self – development and empowerment through the design of jobs, use of empowered teams, and personal commitment to quality.

4. The company must provide opportunities for employee participation to inspire action, such as improvement teams product design reviews, or Six Sigma training.

5. The company must provide recognition and rewards, including public acknowledgement for good performance as well as tangible benefits.

SENIOR MANAGEMENT◦Henry Mintzberg’s 10 Managerial Roles

that leaders must play:

1. Figurehead 6. Spokesperson 2. Leader 7. Entrepreneur 3. Liaison 8. Disturbance

Handler4. Monitor 9. Resource Allocator5. Disseminator 10. Negotiator

SENIO MANAGER’S RESPONSIBILITIES:

1.Ensure that the organization focuses on the needs of the customer.

2. Cascade the mission, vision and values of the organization throughout the organization.

3. Identify the critical processes that need attention and improvement.

4. Identify the resource and trade – offs that must be made to fund the TQ activity.

5. Review progress and remove any identified barriers.

6. Improve the macro processes in which they are involved, both to improve the performance of the process and to demonstrate their ability to use quality tools for problem solving.

MIDDLE MANGAEMENT◦(GAMP) General Approved Management

Principles time – honored assumption and practices:

Clear and fixed work goals and technology.

Relying on centralized specialist groups.Focusing on numbers, such as meeting

budgeted targets.Delegating as much as possible and

managing solely by results. Compartmentalizing people issues and

technology issues.

MIDLE MANAGERS SYSTEMATIC PROCESS FOR ORGANIZATIONAL PERFORMNACE

1. Empowerment 2. Creating a common vision of

excellence.3. New rules for playing the

organizational game.4. Implementing a continuous

improvement process.5. Developing and retaining peak

performance.

THE WORKFORCEIf total quality does not occur at the

workforce level, it will not occur at all. The empowerment quality policies. This task requires ownership.

Ownership goes beyond empowerment; it give the employee the right to have a voice in deciding what needs to be done and how to do it. It is based on a belief that what is good for the organization is also good for the individual, and vice versa

CHANGE MANAGEMENTChange makes people uncomfortable,

managing change is seldom pleasant. Managing change usually requires a well – defined process, just like any other business process. ◦Three basic stages of change management:

1st stage: Involves questioning the organization’s current state and dislodging accepted patterns of behavior.

2nd stage: A state of flux, where new approaches are developed to replaced suspended old activities.

3rd stage: Period consists of institutionalizing the new behaviors and attitudes.

CHANGE MANAGEMENT

◦Five steps of Change Management:

1. Scope the change 2. Create a vision3. Drive commitment4. Accelerate the transition5. Sustain momentum

IMPLEMENTATION BARRIERS TO CREATING A TQ CULTUREOne reason for TQ failure is a lack of what

Deming called “constancy of purpose” in his original version of the 14 Points. The people who implement quality initiatives often have conflicting goals and priorities.

Another reason for failure is the lack of a holistic view of quality( which is why we use the term total in TQ). Many approaches to “implementing quality” are one – dimensional and are consequently prone to failure.

Another danger lies in the lack of understanding cultural issues and the tendency to imitate others – the easy way out.

BALDRIGE CRITERIA:Alignment

- defined as consistency of plans, processes, actions, information, decisions, results, analysis, and learning to support key organization – wide goals. Effective alignment requires common understanding of purpose and goals and use of complementary measures and information for planning, tracking, analysis, and improvement at each of three levels of quality. A well – aligned organization has its processes focused on achieving a shared vision and strategy.

CERTAIN MISTAKES ARE NADE REPEATEDLY. SOME OF THE MORE COMMON MISTAKES :

1. TQ is regarded as a “program”, despite the rhetoric that may state the contrary.

2. Short – term results are not obtained, causing management to lose interest – often either no attempt is made to get short – term results, or management believes that measurable benefits lie only in the distant future.

3. The process is not driven by a focus on the customer, a connection to strategic business issues, and support from senior management.

4. Structural element in the organization block change, such as compensation systems, promotion systems, accounting systems, rigid policies and procedures, specialization and functionalization and status symbols such as offices and perks.

5. Goals are set too low. Management does not shoot for stretch goals or use outside benchmarks as target.

6. The organizational culture remains one of “command and control” and is driven by fear or game – playing , budgets, schedules, or bureaucracy.

7. Training is not properly addressed. Too little training is offered to the workforce or it may be of the wrong kind, such as classroom training only or a focus on tools and not problems. Training must be matched to strategy and business needs so as not to be viewed as frivolous.

8. The focus is mainly on products, not processes.

9. Little real empowerment is given and is not supported in actions.

10. The organization is too successful and complacent. It is not receptive to change and learning, and clings to the “not invented here” syndrome.

11. The organization fails to address three fundamental questions: Is this another program? What’s in it for me? How can I do this on top of everything else?

12. Senior management is not personally and visibly committed and actively participating.

13. The organization overemphasizes teams for cross – functional problems, which leads to the neglect of individual effort for local improvement.

14. Employee operate under the belief that more data are always desirable, regardless of relevance – “paralysis by analysis”

15. Management fails to recognize that quality improvement is a personal responsibility at all levels of the organization.

16. The organization does not see itself as a collection of interrelated processes making up an overall system. Both the individual processes and the overall system need to be identified and understood.

SUSTAINING THE QUALITY ORGANIZATIONGetting started often seems easy by

comparison with sustaining a quality focus. Numerous organizational barriers and challenges get in the way. New efforts usually begin with much enthusiasm, in part because of the sheer novelty of the effort. After awhile, reality sets in and doubts surface. Real problems develop as early supporters begin to question the process. At this point, the organization can resign itself to inevitable failure or persist and seek to overcome the obstacles.

THE LEARNING ORGANIZATION

◦Psychologists suggest that individuals go four stages of learning:

1. Unconscious incompetence 2. Conscious incompetence 3. Conscious competence 4. Unconscious competence

◦New approach to Six Sigma is based on the following four steps:

1. Align executives to the right objectives and targets.

2. Mobilized improvement teams around appropriate metrics.

3. Accelerate results.4. Govern sustained improvement.

SELF – ASSESSMENT PROCESSES

Self – assessment is the holistic evaluation processes and performance. The self part of the term means that it should be conducted internally rather that simply relying on a consultant, which promotes greater involvement of the organization’s people, yielding a higher level of understanding and buy – in.

SELF – ASSESSMENT PROCESSES

◦A self – assessment should address the following:

Management involvement and leadership.

Product and process design.Product control.Customer and supplier communication.Quality improvement.Employee participation.Education and training.Quality information.

SELF – ASSESSMENT PROCESSES

◦The four steps of TI – BEST

1. Define business excellence for your business.

2. Assess your progress.3. Identify improvement

opportunities.4. Establish and deploy an action

plan.

SELF – ASSESSMENT PROCESSES

◦This process provides a systematic approach to learning and improvement and benefits the organization by:

Providing a framework that ties efforts together.

Providing vehicle for identifying best practices.

Providing a structure for sharing knowledge and learning methods and techniques others have used to make improvement.

Allowing employee to speak the same language of quality, thereby increasing communication and organizational alignment toward common goals.

SELF – ASSESSMENT PROCESSES

Fostering teamwork across the company.

Improving the ability to measure improvements by document ting processes and results.

Providing process to accelerate improvement across the organization.

Involving every employee in continuous improvement toward world – class benchmarks.

CORE PRINCIPLES AND STRATEGIES OF SUN MICROSYSTEMS, KEY LESSONS:

Quality must be elevated to the level of a “core management process”.

Quality must be the first agenda item of every executive management and board meeting.

Quality can be managed only if it is measured.

Quality starts with employee.Achievement in quality must be a

factor in compensation.

LEVERAGING SELF – ASSESSMENT: THE IMPORTANCE OF FOLLOW - UP

◦Four things to leverage self – assessment findings.

1. Prepare to be humbled.2. Talk though the findings.3. Recognize institutional influences.4. Grind out the follow – up.

IMPLEMENTING ISO 9000, BALDRIGE, AND SIX SIGMAQuality policy

identifies key objectives of products and services such as fitness for use, performance, safety, and dependability; and basic procedures for such key activities as process control, inspection, testing, control of nonconforming products, corrective action, control of measuring and test equipment, and maintenance of essential records and documentation.

IMPLEMENTING ISO 9000, BALDRIGE, AND SIX SIGMA

Quality manualwhich serves as a permanent

reference for implementing and maintaining the system.

Internal auditswhich focus on identifying

whether documented procedures are being followed and are effective, and reporting the issues to management for corrective action.

IMPLEMENTING ISO 9000, BALDRIGE, AND SIX SIGMA

◦Four major barriers to successfully implementing:

1. Misinterpretation of the requirements.

2. Over control of the quality system.3. Excessive documentation4. Failing to identify current gaps in

requirements.

IMPLEMENTING ISO 9000, BALDRIGE, AND SIX SIGMA

◦Top 10 list of lessons learned by their quality journey:

1. Don’t wait until you’re “ready”2. It takes longer than you think.3. Everyone must be involved and

understand what’s important.4. It’s important not just to understand

the Baldrige criteria, but also to understand the connections among the criteria.

5. In well – run organizations, everything is intentional.

IMPLEMENTING ISO 9000, BALDRIGE, AND SIX SIGMA

6. Never confuse activity with accomplishment.

7. You don’t know what you don’t know until someone tells you.

8. so, you say you want to be exceptional....prove it!

9. If you’re in this to win, don’t bother.10. Leadership is not seeing which

way the parade is moving and running to the front.

IMPLEMENTING ISO 9000, BALDRIGE, AND SIX SIGMA

◦ Key principles of effective implementation of Six Sigma:

Committed leadership from top management.

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.

EASTMAN PEOPLE WAY TO SUCCESS

◦Values and principles:Honesty and integrityFairnessTrustTeamworkDiversityEmployee well – beingCitizenshipWinning attitude

EASTMAN PEOPLE WAY TO SUCCESS

◦Eastman identified and removed several roadblocks that impeded motivation:

Fear of losing one’s job.The performance appraisal system.The employee suggestion system.

EASTMAN PEOPLE WAY TO SUCCESS

◦Eastman seven steps for accelerated continuous improvement:

1. Focus and pinpoint.2. Communicate.3. Translate and link.4. Create a management action plan5. Improve process.6. Measure progress and provide

feedback.7. Reinforce behaviors and celebrate

results.