Building and Sustaining Total Quality Organizations Chapter 14 Building and Sustaining Total Quality Organizations

Why Adopt TQ Philosophy? Reaction to competitive threat to profitable survival An opportunity to improve

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

Corporate Culture and Change Corporate culture is a company’s value system and its collection of guiding principles Cultural values often seen in mission and vision statements Culture reflected by management policies and actions

Baldrige Core Values and Concepts Visionary leadership Customer-driven excellence Organizational and personal learning Valuing employees and partners Agility Managing for innovation Focus on the future Management by fact Public responsibility and citizenship Focus on results and creating value Systems perspective

TQ vs. Traditional Management Organizational structures Role of people Definition of quality Goals and objectives Knowledge Management systems Reward systems Management’s role Union-management relations Teamwork Supplier relationships Control Customers Responsibility Motivation Competition

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

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

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

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

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

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

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

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

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

Implementing Total Quality: Key Players Senior management Middle management Workforce

Sustaining the Quality Organization View quality as a journey (“Race without a finish line”) Recognize that success takes time Create a “learning organization” Planning Execution of plans Assessment of progress Revision of plans based on assessment findings Use Baldrige assessment and feedback Share internal best practices (internal benchmarking)