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Chapter 17

Building and SustainingTotal QualityOrganizations

Key Idea

Building and sustaining a TQ organization requires a readiness for change, the adoption of sound practices and implementation strategies, and an effective organizational infrastructure.

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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

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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

Key Idea

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.

Baldrige Core Values and Concepts 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

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

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.

Building on Best Practices Universal best practices

–Cycle time analysis–Process value analysis–Process simplification–Strategic planning–Formal supplier certification

programs

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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

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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

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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

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Implementing Total Quality:Key Players

Senior management Middle management Workforce

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?

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.

Contrasts

Key Idea

Numerous barriers exist to successfully transform organizations to a sustained culture of total quality. 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.

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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

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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

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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

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

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.

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

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

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.

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

Key Idea

Following up requires senior leaders to engage in two types of activities: action planning and subsequently tracking implementation progress.

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

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

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

THE EVOLUTION OF QUALITY MANAGEMENT

W. Edwards Deming has been the most prominent.

In the 1940s Deming worked at the Census Bureau, where he introduced the use of statistical process control to monitor the mammoth operation.

In 1950 Deming began teaching statistical quality control to Japanese companies.

Quality Guru – Walter Shewaht Working at Bell Laboratories in the

1920s, he developed the technical tools such as control charts that formed the basis of statistical quality control;

He and his colleagues at Bell Labs introduced the term quality assurance for their program to improve quality through the use of statistical control methods.

Quality Guru – W. Edwards Deming A disciple of Shewart, he developed

courses during World War II to teach statistical quality-control techniques to engineers and executives of companies that were military suppliers;

after the war he began teaching statistical quality control to Japanese companies, initiating their quality movement.

Quality Guru – Joseph M. Juran An author and consultant, he followed

Deming to Japan in 1954; He focused on strategic quality

planning within an annual quality program, setting goals for product quality and designing processes to achieve those goals;

Quality improvement is achieved by focusing on projects to solve problems and securing breakthrough solutions.

Quality Guru – ArmandV. Feigenbaum In his 1951 book, Quality Control:

Principles, Practices and Administration, he introduced the concept of total quality control and continuous quality improvement as a companywide strategic commitment requiring the involvement of all functions in the quality process, not just manufacturing;

From 1958 to 1968 he was director of manufacturing operations and quality control at GE.

Quality Guru – Philip Crosby In his 1979 book, Quality Is Free, he

emphasized that the costs of poor quality (including lost labor and equipment time, scrap, downtime and lost sales) far outweigh the cost of preventing poor quality;

In his 1984 book, Quality Without Tears, he defined absolutes of quality management—quality is defined as conformance to requirements, quality results from prevention, the performance standard is “zero defects.”

Quality Guru – Kaoru Ishikawa This Tokyo University professor

promoted use of quality circles and developed the “fishbone” (cause and effect) diagram to diagnose quality problems;

He emphasized the importance of the internal customer, that is, that a quality organization is first necessary in order to produce quality products or services.

Quality Circle