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