1. Performance Excellence and Organizational Change
Chapter 11
Performance Excellence and Organizational Change

2. Organizational Change Realities
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?

3. 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.

4. Strategic vs. Process Change

5. Cultural Change
Culture – 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

6. Elements of a Performance Excellence Culture
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

7. Why Adopt a Performance Excellence Philosophy?
Reaction to competitive threat to profitable survival
An opportunity to improve

8. Requirements for Building and Sustaining Performance Excellence
Readiness for change
Sound practices and implementation strategies
Effective organization

9. Perspectives on 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

10. People Roles in Organizational Change
Senior management
Middle management
Workforce

11. Transforming Middle Managers to Change Agents
Empower
Create a common vision of excellence
Create new organizational rules
Implement continuous improvement
Develop and retain peak performers

12. Common Mistakes in Implementation (1 of 3)
Change is regarded as a short-term “program”
Compelling results are not obtained quickly
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

13. Common Mistakes in 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

14. Common Mistakes in 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

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

16. 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

17. 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

18. 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

19. Quality Engines of Baldrige Winners

20. 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

21. 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

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

23. Knowledge 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.

24. Types 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.

25. Organizational Learning
Create a “learning organization”
Planning
Execution of plans
Assessment of progress
Revision of plans based on assessment findings

26. 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

27. Internal 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.

28. Organizational Change for 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

29. Organizational Change, Learning, and Organizational Theory
Reason for change
Traditional: productivity or job satisfaction
TQ: customer satisfaction
Source of change
Both: top management
Types of change
Traditional: limited in scope and duration
TQ: continuous improvement over a long period of time

30. Principles for Managing Change
Unfreeze attitudes and behavior
Have effective leadership
Manage interdependence
Involve the people
Refreeze to make gains permanent