1. Building and Sustaining Performance Excellence in Organizations
Chapter 9
Building and
Sustaining
Performance
Excellence in
Organizations
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

2. Key Idea
Building and sustaining performance excellence requires a readiness for change, the adoption of sound practices and implementation strategies, and an effective organizational infrastructure.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

3. Why Adopt a Performance Excellence Philosophy?
Reaction to competitive threat to profitable survival
An opportunity to improve
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

5. Organizational Culture and Performance Excellence
(Corporate) culture is a company’s value system and its collection of guiding principles
Cultural values are often seen in mission and vision statements
Quality and performance excellence must define and drive the culture of an organization
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

6. Key Idea
Culture is reflected by the management policies and actions that a company practices. Therefore, organizations that believe in the principles of quality and performance excellence are more likely to implement the practices successfully. Conversely, actions set culture in motion. As quality practices are used routinely within an organization, its people learn to believe in the principles, and cultural changes can occur.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

9. Key Idea
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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

10. Building on Best Practices
Universal best practices
Cycle time analysis
Process value analysis
Process simplification
Strategic planning
Formal supplier certification programs
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

14. Implementing Total Quality: Key Players
Senior management
Middle management
Workforce
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

15. Key Idea
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?
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

16. 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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

17. Contrasts
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

18. Key Idea
There are numerous barriers to transforming organizations to a sustained culture of performance excellence. Understanding these barriers can help significantly in managing change processes.
Perhaps the most significant failure encountered in most organizations is a lack of alignment between components of the organizational system.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

19. Common Mistakes in TQ Implementation (1 of 3)
Quality initiative is 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

20. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

21. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

22. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

23. Key Idea
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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

24. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

25. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

26. Key Idea
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.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

27. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

28. Key Idea
Following up requires senior leaders to engage in two types of activities: action planning and subsequently tracking implementation progress.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

29. Leveraging Self-Assessment Findings
Prepare to be humbled
Talk through the findings
Recognize institutional influences
Grind out the follow-up
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

30. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

31. 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
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing