1. Building and Sustaining Performance Excellence in Organizations
Chapter 9
Building and
Sustaining
Performance
Excellence in
Organizations

2. Key Idea Introduction
A total quality strategy requires significant changes in organization design, process, and culture.

3. Obstacles to TQ Implementations
Lack of a strong motivation
Lack of time
Lack of a formalized strategic plan for change

4. 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 won’t be undercut by corporate accounting principles
Develop allies, both internal and external
Develop metrics for return on quality
Never stop selling quality

5. Corporate Culture and Change
Corporate culture is a company’s value system and its collection of guiding principles
Understanding culture and its importance
Cultural values often seen in mission and vision statements

6. Key Idea Organizational 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.

7. 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

8. 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

9. Key Idea Cultural 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.

10. Building on Best Practices
Universal best practices
Cycle time analysis
Process value analysis
Process simplification
Strategic planning
Formal supplier certification programs

11. 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

12. 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

13. 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

14. Implementing Total Quality: Key Players
Senior management
Middle management
Workforce

15. 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.

16. Key Idea Change 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?

17. Change Management as a Process
Think of change management as a process.
Three basic steps
Questioning the organization’s current state.
Developing new approaches—a state of flux.
Institutionalizing the new behaviors and attitudes.

18. 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?

19. 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.

20. Contrasts

21. Key Idea Implementation 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.

22. Implementation Barriers
Lack of constancy of purpose
Lack of holistic view
Lack of understanding cultural issues
Lack of alignment

23. 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

24. 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

25. 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

26. Six Stages of Quality Life Cycle
Adoption
Regeneration
Energizing
Maturation
Limitation or stagnation
Decline

27. Key Idea Learning 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.

28. Learning Organization
Peter Senge
… an organization that is continually expanding its capacity to create its future.
adaptive learning & generative learning

29. 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.

30. 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

31. Key Idea Self-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.

32. 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

33. 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 don’t know what to do with the information

34. Key Idea Importance of Follow-up
Following up requires senior leaders to engage in two types of activities: action planning and subsequently tracking implementation progress.

35. Leveraging Self-Assessment Findings
Prepare to be humbled
Talk through the findings
Recognize institutional influences
Grind out the follow-up

36. 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

37. 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