Total Quality Management

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MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
1
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
 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
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

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