Managing for Quality and Performance Excellence - Key Terms

Building and Sustaining Quality and Performance Excellence

• Building and sustaining performance excellence requires:
  • Effective leadership.
  • Commitment to change.
  • Long-term sustainability:
    • Ability to address current needs.
    • Agility and management skills.
    • Structure to prepare for the future.
  • Adoption of sound practices and implementation strategies.
  • Continual organizational learning.
  • Demands continual learning and adaption to the changing global business landscape.

Culture and Performance Excellence

• Quality and performance excellence must define and drive the culture of the organization.
• Culture (corporate culture): An organization’s value system and its collection of guiding principles.

Organizational Changes

• Strategic Change:
  • Results from strategy development and implementation.
  • Externally focused.
  • Relates to significant customer, market, product/service, or technological opportunities and challenges.
  • Impacts culture the most rapidly.
• Process Change:
  • Results from operational assessment activities.
  • Deals with the operations of an organization.
  • Accumulation of continuously improving process changes can also lead to a positive and sustainable culture change.

The Three-Stage Process of Change

• Stage 1: Questioning the organization’s current state and dislodging accepted patterns of behavior.
• Stage 2: A state of flux, where new approaches are developed to replace suspended old activities.
• Stage 3: Institutionalizing the new behaviors and attitudes.

Barriers to Successful Implementation

• Organizations encounter numerous barriers to successful implementation.
• They need to recognize these barriers and avoid the common mistakes that stifle quality efforts, particularly the lack of alignment and integration between components of the organizational system.
  • Alignment: The consistency of plans, processes, actions, information, decisions, results, analysis, and learning to support key organization-wide goals.
  • Integration: The harmonization of plans, processes, information, resource decisions, actions, results, and analyses to support key organization-wide goals.

Adoption of a Performance Excellence Approach

• Companies adopt a performance excellence approach to react to competitive threats or take advantage of perceived opportunities.
• In most cases, threats have provided the incentive to act and change the company’s culture.
• Successful adoption requires:
  • Readiness for change.
  • Sound practices and implementation strategies.
  • An effective organization in which all employees are engaged.

Routes to Performance Excellence

• Organizations can take many routes to performance excellence, but none of them represents the “one best way.”
• Whatever approach or combination of approaches an organization uses should make the most sense—and work—in the organization.
• Many organizations start with ISO 9000 because of its prescriptive nature and process orientation and then evolve to a broader framework such as Baldrige.

Best Practices

• Best practices are simply those that are recognized by the business community to lead to successful performance.
• Five “universal” best practices (can improve any organization):
  • Cycle-time analysis.
  • Process value analysis.
  • Process simplification.
  • Strategic planning.
  • Formal supplier certification programs.
• Other practices depend on a company’s level of performance.
  • Low performers: Stick to basics such as process simplification, training, and teamwork.
  • High performers: Benefit from benchmarking world-class organizations and using more advanced approaches.

Implementing Six-Sigma

• Lessons learned in implementing Six Sigma provide key insights that can apply to implementing any type of quality and performance excellence initiative.
• Effective implementation of Six Sigma depends on some key principles:
  • Committed leadership from top management.
  • 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.

Performance Excellence as a Never-Ending Journey

• Performance excellence must be viewed as a never-ending journey.
• Implementation takes time as well as effort, and organizations must not regard quality approaches as a quick fix.
• Organizations must continue to learn and adapt to changing environments.
• Organizational learning is a key aspect of building high-performing organizations.
• Learning organizations have to become good at performing five activities:
  • 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.

The Baldrige Journey

• The Baldrige journey can be described from a life-cycle perspective.
  • Stage 0: Organizations opt to wait for mandates and regulations, and they implement change when required to maintain compliance.
  • Stage 1: Organizations commit to a proactive approach to improvement.
  • Stage 2: Senior leaders became personally and actively engaged with the criteria and feedback, they begin to experience traction on their organizational transformation strategies.
  • Stage 3: As organizations become more skillful at these approaches, integration begins to occur.
  • Stage 4: The Sustaining stage can result in two outcomes: continued improvement or decline as organizations lose focus or become distracted.

Sustainability

• Sustainability requires continual learning.
• Learning organizations have to become good at performing five main activities:
  • 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

• Self-assessment – the holistic evaluation of processes and performance – provides a starting point to build a quality organization.
• Self-assessment should identify both strengths and opportunities for improvement, creating a basis for evolving toward higher levels of performance.
• A major objective of most self-assessment projects is the improvement of organizational processes based on opportunities identified by the evaluation.
• The Baldrige criteria provide the most comprehensive instrument for self-assessment of organizational quality and management practices.

Follow-Up Activities

• Self-assessment naturally requires follow-up activities, specifically action planning and tracking implementation progress.
• Managers must prepare themselves for unpleasant findings and be able to take action to improve them.
• This requires serious discussion, understanding of institutional influences, and “grinding out” the follow-up activities.

Small Organizations and Nonprofits

• Small organizations and nonprofits have generally been slow to adopt quality initiatives.
• In most cases, this lag is a result of a lack of understanding and knowledge of what needs to be done and how to do it, because managers are wrapped up in entrepreneurial activities that typically focus on sales strategies and market growth, day-to-day cash flow problems, and routine fire fighting.

The Future

• What the future will hold is never predictable.
• We face a serious challenge in sustaining the principles of quality amidst the continuing emergence of short-lived management fads, changing leadership driven by pressures of the stock market, e-commerce, and a myriad of other factors.