CHAPTER 11

Leading, Building, and Sustaining Performance Excellence35

CHAPTER 9Leading, Building, and Sustaining Performance ExcellenceTeaching NotesThe keys to attaining an in-depth understanding of total quality organizations as integrated systems are to have basic knowledge of organizing principles and organizational cultures and to develop and use a sustainable model for performance excellence such as the Baldrige criteria as a foundation for quality organization and continuous improvement. Building and sustaining a TQ organization requires leadership as the "driver" for an effective TQ systems, a readiness for change, the adoption of sound practices and implementation strategies, and effective organization. An understanding of basic leadership concepts and their importance is vital for managers and workers at every level in a TQ focused organization. Integrated systems have become more important in organizations that aspire to high quality levels, and organizational leaders must understand how to "deploy" plans and quality efforts throughout the organization.

This chapter focuses on the leadership, corporate culture, and integration of concepts developed throughout the text. This organizing focus is one that students may find easier to grasp than the cost of quality or even planning for quality. However, you should point out that the "safe" concept of organizations is rapidly changing, as organizations and individuals are shaken out of their complacency by events that surround them today. The strict hierarchy of the conventional organizational "pyramid" is giving way to a "matrix" or process focused organization, self-managed teams, massive part-time employment, and economic and technological dislocations. Numerous attempts to align the corporate culture with the total quality management, global marketplace, and "lean and mean" concepts, not all of which have been resounding successes, have brought us into the 21st Century. Key objectives are:

To define leadership as the ability to positively influence people and systems under ones authority to have a meaningful impact and achieve important results. Leaders create clear and visible quality values and integrate these into the organization's strategy and structure.

To emphasize that building and sustaining performance excellence requires effective leadership, a commitment to change and long-term sustainability, the adoption of sound practices and implementation strategies, and continual organizational learning. To sustain performance excellence demands continual learning and adaption to the changing global business landscape. An important element of sustainability is ensuring future leadership; thus the development of future leaders and a formal succession plan are vital. To define Sustainability as an organizations ability to address current needs and have the agility and management skills and structure to prepare successfully for the future, including preparedness for emergencies. To learn that the six key leadership competencies are: navigator, communicator, mentor, learner, builder, and motivator. The competencies depend on a collection of personal leadership characteristics: accountability, courage, humility, integrity, creativity, perseverance, and well-being. They are reflected in the Leadership category of the Baldrige criteria. To study the leadership system and how leadership is exercised, formally and informally, throughout an organization. These elements include how key decisions are made, communicated, and carried out at all levels. The leadership system includes structures and mechanisms for decision making, selection and development of leaders and managers, and reinforcement of values, directions, and performance expectations. To investigate the contemporary and emerging leadership theories include situational leadership, transactional leadership theory, transformational leadership theory, substitutes for leadership theory, and emotional intelligence theory. The purpose of leadership theories is to explain differences in leadership styles and contexts. They can provide guidance to senior leaders in pursuing performance excellence.

To realize that an important aspect of an organizations leadership is governance the system of management and controls exercised in the stewardship of an organization and corporate social responsibility (CSR). Governance processes may include approving strategic direction, monitoring and evaluating CEO performance, succession planning, financial auditing, executive compensation, disclosure, and shareholder reporting. CSR relates to responsibility to the public through the practices of good citizenship and includes ethics, aspects of corporate governance, and protection of public health, safety, and the environment. Corporate social responsibility has become a strategic imperative and a competitive or marketplace necessity.

To show that organizations adopt TQ to react to competitive threats or take advantage of perceived opportunities, however, threats are the most effective in providing an incentive to act and change the organizations culture.

To develop understanding of the need for commitment from organizations senior leadership that is critical to success, but is not easy. It requires aligning objectives with the goals of senior leaders and stakeholders, using quantitative arguments, developing sympathetic allies, and getting early wins.

To point out the importance of corporate culture -- defined as an organizations value system and its collection of guiding principles -- how it and quality are impacted by organization structure, and vice versa, and to enhance the understanding that corporate culture must change in order for TQ to take root and grow.

To suggest that the Core Values and Concepts from the Baldrige Criteria are a useful summary of the culture that defines a TQ organization.

To stress the idea that best practices are those that are recognized by the business community to lead to successful performance. Some best practices are universal including cycle-time analysis, process value analysis, process simplification, strategic planning, and formal supplier certification programs. Others depend on a companys level of performance. For instance, low performers must stick to basics such as process simplification, training, and teamwork, while high performers can benefit from benchmarking world-class organizations and using more advanced approaches.

To understand the multiple approaches to designing an effective organizational infrastructure, overcoming barriers to successful implementation, and developing and using self-assessment to determine the level of performance and best practices required at various stages for building and sustaining quality efforts.

To emphasize that all employees play a role in TQ implementation from senior manager, who lead and provide resources, to middle managers who act as change agents and assure that goals are met, to the workforce that must take personal responsibility for making things happen, to unions that must work for the welfare of their members, while also working cooperatively with management.

To introduce the concept of self-assessment the holistic evaluation of processes and performance that provides a starting point to build a quality organization by identifying both strengths and opportunities for improvement, and creating a basis for evolving toward higher levels of performance. A major objective 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.

To raise awareness of the fact that quality is a never-ending journey that must be built on knowledge management, organization learning and adaptation to an ever-changing environment, and continuous improvement. Organizations can take many routes to performance excellence, but none of them represents the one best way. Organizational learning can be built into Baldrige, ISO, or Six Sigma approaches to quality improvement. Whatever approach an organization takes whether it is ISO 9000, Baldrige, Six Sigma, or some other approach or combination the approach should make sense and work in the organization.

Leadership Changes at Alcoa1. From a strategic management standpoint, it is difficult to speculate on why corporate management did not take definitive action for five years at the Addy plant. However, various theories might be put forth. These might be termed the stay-the-course, insufficient measures, and the maintaining market presence strategies.

First, the company had invested in innovative structuring that had caused the plant to become a showcase. At first, this approach seemed to have worked well. However, systems (human and technical) which are not maintained and improved tend to deteriorate. The company may have felt that it would lose face as a forward-thinking innovative firm if it closed down the showplace facility and admitted defeat.

Second, partially because of the innovative structure there may not have been sufficient measures to track the components of cost, quality, and productivity. If those are not in place, it takes quite a lot of effort to begin to build information systems and learn how to use them to impact profitability.

Finally, the company may have received a good return on the original investment, which could essentially have been written off in accounting terms. Therefore, the only costs that had to be covered would be the variable costs of running the plant. If it would useful to present a full line of products to customers, the plant could continue to operate, while not being profitable based on total fixed, variable, and overhead costs.

2. Simonic seemed to use a mix of transformational and transactional leadership styles. The CEOs and executive team members of nearly every Malcolm Baldrige Award recipient have generally modeled this leadership behavior, and some empirical evidence found in research suggests that transformational leadership behavior is strongly correlated with lower turnover, higher productivity and quality, and higher employee satisfaction than other approaches. However, not all managers in TQ organizations need be transformational leaders. An organization pursuing TQ needs both those who establish visions and those who are effective at the day-to-day (transactional) tasks needed to achieve them. In fact, Avolio and Bass extended the concept of transformational leadership by developing a hybrid of transactional and transformational leadership, which they labeled the Full Range of Leadership approach. They noted that Transformational leadership adds to transactional leadership in its effects on follower satisfaction and performance. Transformational leadership does not replace transactional leadership Transactional leadership, particularly contingent rewards, provides a broad basis for leadership, but a greater amount of effort, innovation, effectiveness, risk taking, and satisfaction can be achieved by transactional leadership if it is augmented by transformational leadership.

3. It would appear to be moderately difficult to duplicate the leadership style used by Simonic and the organizational systems practiced at Addy. The basic management structure was built around what might be called a socio-technical system design that included teamwork, informal, democratic management style, and highly technical process management and control requirements. As indicated in the text, organization structure has numerous facets, including:

1. Company operational and organizational guidelines. Standard practices that have developed over the firms history often dictate how a company organizes and operates.

2. Management style. The management team operates in a manner unique to a given company. For example, management style might be formal or informal or democratic or autocratic. If the organization operates in a highly structured, formal atmosphere, organizing a quality effort around informal meetings would probably meet with little success.

3. Customer influences. Customers, particularly governmental agencies, may require formal specifications or administrative controls. Thus, the organization needs to understand and respond to these requirements.

4. Company size. Large companies have the ability to maintain formal systems and records, whereas smaller companies may not.

5. Diversity and complexity of product line. An organization suitable for the manufacture of a small number of highly sophisticated products may differ dramatically from an organization that produces a high volume of standard goods.

6. Stability of the product line. Stable product lines generate economies of scale that influence supervision, corrective action, and other quality-related issues. Frequent changes in products necessitate more control and commensurate changes to the quality system.

The style that he used was effective for the situation that he had to work with. Thus, he was able to turn the plant around by applying transformational and transactional leadership style.

Merging Divergent Quality Systems at Honeywell

1. Allied Signal was one of the pioneers of Six Sigma quality, which they borrowed from Motorola. Honeywell developed their own quality management approach, called Honeywell Quality Value (HQV) that was Baldrige-based. Both systems were working very well for the two companies. However, when the merger took place, it was necessary that a new, integrated approach be devised that would build on the successes of each separate process. This was given the title of Six Sigma Plus, based on the DMAIC process.

2. Top management, in the person of CEO Bonsignore has expressed public commitment to Six Sigma Plus as the approach that will drive growth and productivity by energizing all of Honeywell Internationals 120,000 employees Other top managers, such as Mr. Romanoff, Honeywells communications director for Six Sigma Plus, as well as Mr. Stark, VP of Six Sigma and Productivity have also given public support to using and improving the merged Six Sigma processes.

3. Six Sigma Plus uses the same basic problem-solving methods and Belt designations for quality experts as the traditional Six Sigma approach. However, it incorporates several unique features. Some of these are lean approaches to process design, learning rather than a pure training model, attention to team-dynamic skills in the training process, and belt experts in supportive processes such as lean, activity-based management (ABM), and total preventive maintenance (TPM).

ANSWERS TO REVIEW QUESTIONS1.Companies decide to pursue performance excellence for two basic reasons: a) as a reaction to competition that poses a threat to its profitable survival, and b) as an opportunity to improve. The first reason is most prevalent. When faced with a threat to survival, a company effects cultural change more easily; under these circumstances, organizations generally implement performance excellence effectively.

2.Leadership is defined as the ability to positively influence people and systems under ones authority to have a meaningful impact and achieve important results. It implies the right to exercise authority and the ability to achieve results. Strong leadership is necessary to successfully implement a quality process. Leaders may seek to motivate employees and develop enthusiasm for quality with rhetoric, but taking strong, decisive, and personal action to implement quality changes makes a bigger impression on employees. Leadership is the most essential ingredient for success in developing a culture of performance excellence. But gaining commitment from top executives is not easy. Dale Crownover, CEO of Texas Nameplate Company a Baldrige winner, was quoted as saying that the best way to sell quality to top executives is to show them where money is being lost due to absenteeism, downtime, not having procedures in place, lack of job descriptions, and poor training.3.Six competencies for leadership based on more than 50 authors thoughts on leadership are:

Navigator creates shared meaning and provides direction towards a vision, mission, goal or end-result. This competency may entail risk taking and requires constant evaluation of the operating environment to ensure progress in the appropriate direction is achieved.

Communicator effectively listens and articulates messages to provide shared meaning. This competency involves the creation of an environment that reduces barriers and fosters open, honest and honorable communication.

Mentor provides others with a role to guide their actions. This competency requires the development of personal relationships that help others develop trust, integrity and ethical decision making.

Learner continuously develops personal knowledge, skills and abilities through formal study, experience, reflection and recreation.

Builder shapes processes and structures to allow for the achievement of goals and outcomes. This competency also entails assuming responsibility for ensuring necessary resources are available and the evaluation of processes to ensure effective resource use.

Motivator influences others to take action in a desirable manner. This competency also includes the evaluation of peoples actions to ensure they are performing consistently with the mission, goal or end-result.

A collection of personal leadership characteristics underlie these six competencies:

1. Accountability taking responsibility for the organization, community or self that the leader serves. This provides the means for measuring performance and dealing with performance that is not good.

2. Courage the mental or moral strength to venture, persevere and withstand danger, fear or difficulty with a firmness of mind and will, allowing leaders to navigate into the unknown.

3. Humility what gives excellent leaders their ability to mentor, communicate and learn, and understand that they are servants of those that follow.

4. Integrity the ability to discern what is right from wrong and commit to the right path.

5. Creativity the ability to see possibilities, horizons and futures that dont yet exist, enabling the leader to help create a shared vision.

6. Perseverance sticking to a task or purpose, no matter how hard or troublesome. This is vital to overcoming obstacles and motivating subordinates.

7. Well-being the ability to stay healthy in both work and play, demonstrating the importance of being ready to implement leadership competencies when needed.These characteristics provide the foundation for exercising the competencies. Many notable leaders, from presidents to CEOs have exhibited these characteristics.

4.Key practices for performance excellence leadership may be found in Table 9-1. They include, in summary form:a. Relating to visionary leadership, there is the need for organization leaders (especially Senior Leaders) to set and deploy organizational vision and values, demonstrate those values through person actions, promote an environment leading to legal and ethical behavior, and create a sustainable organization.

b. Relating to organizational performance, there is the need for leaders to create an environment for organizational performance improvement, with a focus on the organizations mission and strategic objectives, innovation, competitive or role-model performance leadership, and organizational agility; provide for organizational and workforce learning and participate in succession planning and the development of future organizational leadersc. Relating to communication, organizational leaders must communicate with the entire workforce, encourage frank, two-way communication throughout the organization, and communicate key decisions.d. Relating to performance and results, leaders are expected to take an active role in reward and recognition programs to reinforce high performance, create an action focus to accomplish the organizations objectives, review performance measures to inform them on needed actions, balance value for customers and other stakeholders in organizational performance expectations and evaluate their own performance and use the results to improve their leadership effectiveness and the leadership system.e. Regarding community focus, leaders must contribute to supporting and strengthening key communities such as charitable organizations, education, and others.

5.The leadership system refers to how leadership is exercised throughout the organization, and includes both formal and informal mechanisms for leadership development. It requires the elements of: 1) clear values that reflect stakeholder requirements and set high expectations for performance and improvement; 2) a means of building loyalty and teamwork based on the shared values, encouraging initiative and risk-taking, and subordinating organization to purpose and function; and 3) a mechanism for leaders to engage in self-examination and improvement.

6.Steering teams in leadership systems have the responsibility to provide leadership, planning, implementation, and review direction. Leadership involves articulating a quality vision, and ensuring that the business management process is aligned, deployed, and supported at all levels. Planning involves strategic planning, setting goals and priorities, ensuring that all employees have the opportunity to participate, and aligning reward and recognition systems to support the quality approach. Implementation involves development of key business process and management teams, reviewing plans, and working with suppliers and business partners in carrying out joint quality planning. Review includes tracking progress of various measures, improving quality systems, planning improvements, and validating the impact of improvements. 7Corporate social responsibility and community support efforts include what is termed Corporate Governance in the Baldrige Award criteria. It includes development of ethics, protection of public health, safety, and concern for the environment. Senior leaders must act to prevent problems, make forthright responses when problems occur, and make information available in order to maintain public awareness, safety, and confidence in the organization. Leaders should not only comply with local, regional, and national laws and regulations, but also make an effort to continuously improve beyond mere compliance. Good citizenship implies that an organization and its leaders support publicly important purposes, such as improving education, public health, the environment, etc., within the limits of its resources. Corporate social responsibility is more important than ever because of recent corporate scandals that have occurred, especially in housing, banking, and financial markets. It has also become a strategic imperative and a competitive or marketplace necessity. Research points to a positive relationship between CSR and business performance. In addition, an ethical business environment within an organization creates trust from customers and employees, resulting in higher customer satisfaction, stronger employee commitment, and improved quality, all of which lead to higher profits.8.Traditional leadership theories (see Bonus Materials on the Premium website) are based on four common perspectives:

a) The trait approach--Involves discerning how to be a leader by examining the characteristics and methods of recognized leaders.

b) The behavioral approach--Attempts to determine the types of leadership behaviors that lead to successful task performance and employee satisfaction.

c) The contingency approach--Holds that there is no universal approach to leadership. Rather, effective leadership behavior depends on situational factors (i.e. who is leading, who is led, and what is the situation) that may change over time.

d) The role approach--Suggests that leaders perform certain roles depending on the situation.

These theories have implications for total quality in that they provide different views of how leaders lead. They also help to understand how these theories have evolved to the present. The older views suggest that perspectives on quality management may benefit from looking at what other leaders do, but they also contain an implied warning that there is no one best way that can be incorporated into every organization. Thus, if effective leadership behavior depends on situational factors i.e. who is leading, who is led, and what is the situation, that may change over time, the TQ leader needs to determine the leader, led and situational variables in his/her own part of the organization, and find out what works. Likewise, in the role approach--where leaders must perform certain roles depending on the situation, the TQ leader establishes what roles need to be filled within his/her own organization, not some other successful one.

9.Emerging theories -- enhance or extend current theory by attempting to answer questions raised, but not answered, by traditional contingency approaches. For example, Attributional Theory states that leaders' judgment on how to deal with subordinates in a specific situation is based on their attributions of the internal or external causes of the behaviors of followers. One of the most widely used merging theories is Emotional Maturity Theory. It is based on the premise that too much attention has been placed on the rational side of leadership in leadership research. The author of the theory, Daniel Goleman, states that emotionally intelligent leaders must develop characteristics of 1) self-awareness, 2) self-regulation, 3) motivation, 4) empathy, and 5) social skill. Such characteristics and skills are not generally captured in performance evaluation systems. Self-management and interpersonal skills are as essential to managerial success as rational skills are. The implications for a total quality system are that without self-management skills, it is difficult to inspire and motivate peers and subordinates into developing and supporting an integrated leadership system and long-range plans for the organization. Without interpersonal skills, it is difficult for managers to build rapport among customers, suppliers, and others outside the organization that are needed to establish long-term effectiveness.

10.Organizations might pursue ISO 9000, Six Sigma, Baldrige, or some combination of all three. Many routes can be taken to building a quality culture, but none of them represents the one best way. Approaches that 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. They develop a quality policy, a quality manual, and prepare for, and perform a quality audit, with the assistance of an outside auditor.

Other organizations start with an action orientation and install a Six Sigma process. A fully implemented Six Sigma process is a strategic approach that is driven and supported by top management, but is deployed throughout the organization at every level. Several key principles are necessary for effective implementation of Six Sigma:

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.

Iomega Corporation summarized it as: invest in people, make data based decisions, and achieve and measure results. Implementing Baldrige requires repetitive cycles of self-assessment, priority-setting, action planning to address gaps and opportunities for improvement, and reflection of results, all driven by an organizations vision, strategic challenges, and capabilities. A major benefit of Baldrige is that it naturally provides a framework for organizational learning, and therefore helps to enhance and sustain an organization, no matter what level of current maturity.

11.Culture, or "corporate culture," is the way an organization does things. The way of doing things at a company is important for effective quality management and control since the processes of production generally have the greatest effect on quality output. Studies show that change is easier in corporate cultures that emphasize customer satisfaction and continuous improvement; in other words those that embrace performance excellence. Cultural values are often seen in the mission and vision statements of organizations. Culture is a powerful influence on behavior because it is shared widely and because it operates without being talked about, and often without being thought of.

12.Strategic change and process change are significantly different from each other, although process change supports strategic change. Strategic change stems from strategic objectives, which are generally externally focused and relate to significant customer, market, product/service, or technological opportunities and challenges. This is what an organization must change to remain or become competitive. Strategic change is broad in scope, is driven by environmental forces, and is tied closely to the organizations ability to achieve its goals. In contrast, process change deals with the operations of an organization.

13.Senior managers must ensure that their plans and strategies are successfully executed to lead cultural change within the organization. The ten managerial roles, defined by Mintzberg, that leaders must play include (1) figurehead, (2) leader (3) liaison, (4) monitor, (5) disseminator, (6) spokesperson, (7) entrepreneur, (8) disturbance handler, (9) resource allocator, (10) negotiator. The importance of each role is contingent on the environmental and organizational factors that face managers who must lead, i.e. the industry or environment surroundings of the organization, its age and size, etc.

Senior managers' responsibilities include the following tasks:

a. Ensure that the organization focuses on the needs of the customer.

b.Cascade the mission, vision, and values of the organization throughout the organization.

c. Identify the critical processes that need attention and improvement.

d. Identify the resources and tradeoffs that must be made to fund the TQ activity.

e. Review progress and remove any barriers to progress.

f. Improve macro processes in which they are involved, both to improve the performance of the process and to demonstrate their ability to use quality tools for problem solving.

Middle managers are often called on to monitor progress; disseminate information and suggestions between local and distant line, staff, and outside experts; and act as a spokesperson inside and outside the firm. Technology development requires that managers constantly scan the environment to be aware of technological developments that may threaten or enhance the operations of the company. Systems and process integration means optimizing the system to meet strategic goals such as customer service, and using tools of quality measurement and continuous improvement. Samuel suggests that transforming middle managers into change agents requires a systematic process that dissolves traditional management boundaries and replaces them with an empowered and teamoriented state of accountability for organizational performance. Middle managers must also show that they support total quality, by listening to employees as customers, creating a positive work environment, implementing quality improvements enthusiastically, challenging people to develop new ideas and reach their potential, setting challenging goals and providing positive feedback, and following through on promises. These changes are often difficult for middle managers to accept.

The work force implements quality policies. This requires ownership that goes beyond empowerment and gives employees the right to a voice in deciding what needs to be done and how to do it. It is based on a belief that what is good for the organization is also good for the individual and viceversa.

Labor's role is first to recognize the need for changing its relationship with management and then to educate its members as to how cooperation will affect the organization. This information includes what its members can expect, and how working conditions and job security might change. At the same time, management must realize that the skills and knowledge of all employees are needed to improve quality and meet competitive challenges. Management must be willing to develop a closer working relationship with labor and be ready to address union concerns and cultivate trust.

14.Wainwright made a radical change in corporate culture to deal with their crisis in the 1980s. Management realized that they were part of the problem, so they put all workers on salaries and began to call them associates. Management and workers all began to wear the same uniform, developed common reward and bonus systems together, tore down walls and barriers, and began to treat both internal and external customers as partners. Their culture is now based on sincere belief and trust in people. The lessons learned indicate that management puts up many barriers in developing corporate culture, and only they can dismantle them if they want to develop such an open, productive, and supportive culture.

15.In the Baldrige criteria, alignment is defined as consistency of plans, processes, actions, information, decisions, results, analysis, and learning to support key organization-wide goals. Effective alignment requires common understand of purposes and goals and use of complementary measures and information for planning, tracking, analysis, and improvement at each of the three levels of quality. A well-aligned organization has its processes focused on achieving a shared vision and strategy of performance excellence. Aligning the organization is a challenging task that is accomplished through a sound strategy and effective deployment. . Integration refers to the harmonization of plans, processes, information, resource decisions, actions, results, and analyses to support key organization-wide goals.16.The Best Practices study, by Ernst and Young, found that best practices depend on the current level of performance of a company, and that trying to implement all the practices of worldclass organizations can actually waste time and money, not help. The study used two performance measures: ROA (return on assets: after tax income divided by total assets) and VAE (value added per employee: sales less the costs of materials, supplies, and work done by outside contractors). Low performers those with less than two percent ROA and $47,000 VAE can reap the highest benefits by concentrating on fundamentals, i.e. identifying and improving processes to better serve customer and market demands. Medium performers those with ROA's from two percent to 6.9 percent and VAE between $47,000 and $73,999 achieve the most benefits from meticulously documenting gains and further refining practices to improve value added per employee, time to market, and customer satisfaction. High performers with ROA and VAE exceeding seven percent $74,000 respectively gain the most from using selfmanaged teams and crossfunctional teams that concentrate on horizontal processes such as logistics and process development.

The best practices can be related to the Deming philosophy in that Deming always advocated profound understanding of processes and systems. This is shown in Points 3, 5, and 9 of his 14 Points. In 3 he advocated using inspection for improvement of processes and cost reduction (concentrating on the "fundamentals" for low-performing companies); Point 5 requires improving constantly and forever the system of production and service (documenting the gains for medium performers, as well as other process refinements); and more emphasis on advanced teamwork and horizontal processes (for high performers), as suggested in Point 9 -- optimize toward the aims and purposes of the company the efforts of teams, groups, and staff areas.

17.The typical life cycle of a quality initiative includes the steps of:

1. Adoption: the implementation stage of a new quality initiative.

2. Regeneration: when a new quality initiative is used in conjunction with an existing one to generate new energy and impact.

3. Energizing: when an existing quality initiative is refocused and given new resources.

4. Maturation: when quality is strategically aligned and deployed across the organization.

5. Limitation or stagnation: when quality has not been strategically driven or aligned.

6. Decline: When a quality management system (QMS) has had a limited impact,

initiatives are failing and the QMS is awaiting termination.

It is important that senior leaders understand that the life cycle provides a strategic mechanism to chart and sustain quality while proactively countering shortcomings of its implementation, such as stagnation and limited application, which can ultimately result in failure.18.Senge defines a learning organization as "an organization that is continually expanding its capacity to create its future. For such an organization, it is not enough merely to survive. 'Survival learning,' or what is most often termed 'adaptive learning' is important indeed it is necessary. But for a learning organization, 'adaptive learning' must be joined by 'generative learning,' learning that enhances our capacity to create."

Organizations cannot count on succeeding in the long run if they merely have committed leaders who use TQ principles for strategic planning and policy deployment, practice TQ in daily operations, and use it for continuous improvement of the current process. These adaptive activities are called "first generation" TQ. Senge advocates developing a learning organization with a new approach to leadership. Instead of the adaptive approach to learning, leaders must use a generative approach constantly anticipating the needs of customers to the point of anticipating products or services they would value but have never experienced and would never think of asking for. Leaders must develop the ability to integrate creative thinking and problem solving throughout the organization.

19.Self-assessment is the holistic evaluation of processes and performance. The self part of the term means that it should be conducted internally rather than simply relying on an external consultant. An organization should make a critical self-assessment of where it stands in relation to its quality commitment. That can help it to identify strengths and areas for improvement and determine what practices will yield the most benefit. At a minimum, a self-assessment should address the following:

a.Management involvement and leadership. To what extent are all levels of management involved?

b.Product and process design. Do products meet customer needs? Are products designed for easy manufacturability?

c.Product control. Is a strong product control system in place that concentrates on defect prevention, before the fact, rather than defect removal after the product is made?

d.Customer and supplier communications. Does everyone understand who the customer is? To what extent do customers and suppliers communicate with each other?

e.Quality improvement. Is a quality improvement plan in place? What results have been achieved?

f.Employee participation. Are all employees actively involved in quality improvement?

g.Education and training. What is done to ensure that everyone understands his or her job and has the necessary skills? Are employees trained in quality improvement techniques?

h.Quality information. How is feedback on quality results collected and used?

Most self-administered surveys, however, can only provide a rudimentary assessment of an organizations strengths and weaknesses. The most complete way to assess the level of TQ maturity in an organization is to evaluate its practices and results against the Malcolm Baldrige National Quality Award criteria by using trained internal or external examiners, or by actually applying for the Baldrige or a similar state award and receiving comprehensive examiner feedback. Understanding ones strengths and opportunities for improvement creates a basis for evolving toward higher levels of performance.

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

To leverage self-assessment findings, managers must do four things:

a.Prepare to be humbled. Humbling is a word we often hear from managers who have recently digested assessment findings.

b.Talk though the findings. Follow-up can be enhanced when the top management team discusses the self-assessment findings.

c.Recognize institutional influences. Managers should be sensitive to the institutional forces working on their self-assessment activities, such as pressures from customers.

d.Grind Out the Follow-up. Follow-up activities provide infrastructure for realizing the process improvements possible from self-assessment.

ANSWERS TO DISCUSSION QUESTIONS1.By saying that leadership is the "driver," we try to emphasize the critical nature of leadership at every level for successful TQ. The answer to Review Question 3, above, elaborates on the practices of top managers in leading TQ focused organizations. Without strong commitment of leaders at every level, a TQ system may not survive, and it certainly will not grow and flourish.

2.Again see Review Question 3, above, as a basis for developing the answer to this question.

3. Leaders can demonstrate the seven personal leadership characteristics of: accountability, courage, humility, integrity, creativity, perseverance, and well-being, but it isnt always easy. As quality guru A. V. Feigenbaum noted, The passion is in living and working in the spirit of a quality ethic which means having a deep belief that what you do to make quality better makes everything in the organization better. 4.Answers will vary, depending on the experiences of the students.

5.The answer to this question will require that students "go beyond" the textbook and the materials in the Bonus materials folder on the Premium website and research the Fiedler model, in more detail. A principles of management or organizational behavior text will probably have Fiedler's "Model of the Effects of Leadership Styles on Leader Performance According to Situational Conditions" and sufficient detail for this answer. Although Fiedler's situational model is not discussed in detail in the chapter, other sources show that the "situational conditions" consist of the leader (called the "leader position power" variable by Fiedler), the led (called the "leader-member relations" variable), and the situation (called "task structure"). Because tasks become less structured in a TQ environment (in contrast to rigid, highly structured tasks in traditional organizations), leader position power is weakened (the first line employees are "empowered"), but leader-member relations are typically good (due to high quality communications and shared commitment). Thus, a "relationship-oriented" leader is better qualified than a "task-oriented leader" in this situation.

6.A dysfunctional corporate culture is one in which shared values and behavior are at odds with the organization's longterm health. If the quality of a company's product or service is low, there is usually a flaw somewhere in the corporate culture. An example of a dysfunctional culture is a high-tech company that stresses individual rewards while innovation depends on teamwork. To change their management practices, organizations must first address their fundamental values.

7.A concise summary of the principles on which modern, high-performing TQ organizations are built and managed is given in the set of Core Values and Concepts that form the basis for the Baldrige criteria. These are the Baldrige process explanations of Core Values and Concepts (using the 2008 Criteria wording):

1. Visionary leadership

2. Customer driven excellence

3. Organizational and personal learning4. Valuing workforce members and partners5. Agility6. Focus on the future7. Managing for innovation 8. Management by fact9. Social responsibility10. Focus on results and creating value11. Systems perspective

Although there is overlap between these values and concepts, it is easy to see that the criteria and core values and concepts may be aligned as follows, with criteria listed alphabetically and values under them, numerically:

A. Leadership

1. Visionary leadership

11. Systems perspective

B. Strategic Planning

6. Focus on the future

7. Managing for innovation

C. Customer and Market Focus

2. Customer-driven excellence

9. Social responsibility

D. Measurement, Analysis, and Knowledge Management

8. Management by fact

10. Focus on results and creating value

E. Workforce Focus

4. Valuing workforce members and partners

3. Organizational and personal learning

F. Process Management

5. Agility

7. Managing for innovation (repeated)8In a site visit to a TQ organization, you would see most of these core values and concepts exemplified. In most cases, you would not have an opportunity to perform a site visit at a non-TQ company. If you did, you would tend to see the opposite conditions in many places throughout the organization. Interested readers are referred to the most current detailed Baldrige Criteria, available on the Internet at http://www.quality.nist.gov. Just to give some understanding of the how the values and concepts might be integrated into management and organizational structure of a Baldrige recipient, and what might be observed on a site visit, the first three core values as described in the 2008 Baldrige materials are as follows:

Visionary Leadership

An organizations senior leaders should set directions and create a customer focus, clear and visible values, and high expectations. The directions, values, and expectations should balance the needs of all your stakeholders. Your leaders should ensure the creation of strategies, systems, and methods for achieving excellence, stimulating innovation, and building knowledge and capabilities. The values and strategies should help guide all activities and decisions of your organization. Senior leaders should inspire and motivate your entire workforce and should encourage all employees to contribute, to develop and learn, to be innovative, and to be creative. Senior leaders should be responsible to your organizations governance body for their action and performance. The governance body should be responsible ultimately to all stakeholders for the ethics, vision, actions, and performance of your organization and its senior leaders.

Senior leaders should serve as role models through their ethical behavior and their personal involvement in planning, communications, coaching, development of future leaders, review of organizational performance, and employee recognition. As role models, they can reinforce ethics, values and expectations, while building leadership, commitment, and initiative throughout your organization.

Customer-Driven Excellence

An organizations customers judge quality and performance. Thus, your organization must take into account all product and service features and characteristics and all modes of customer access that contribute value to customers. Such behavior leads to customer acquisition, satisfaction, preference, referral, retention and loyalty, and to business expansion. Customer-driven excellence has both current and future components: understanding todays customer desires and anticipating future customer desires and marketplace potential.

Value and satisfaction may be influenced by many factors throughout your customers overall purchase, ownership, and service experiences. These factors include your organizations relationships with customers, which help build trust, confidence, and loyalty.

Customer-driven excellence means much more than reducing defects and errors, merely meeting specifications, or reducing complaints. Nevertheless, reducing defects and errors and eliminating causes of dissatisfaction contribute to your customers view of your organization and thus are also important parts of customer-driven excellence. In addition, your organizations success in recovering from defects and mistakes (making things right for the customer) is crucial to retaining customers and building customer relationships.

Customer-driven organizations address not only the product and service characteristics that meet basic customer requirements but also those features and characteristics that differentiate products and services from competing offerings. Such differentiation may be based upon new or modified offerings, combinations of product and service offerings, customization of offerings, multiple access mechanisms, rapid response, or special relationships.

Customer driven excellence is thus a strategic concept. It is directed toward customer retention, market share gain, and growth. It demands constant sensitivity to changing and emerging customer and market requirements and to the factors that drive customer satisfaction and retention. It demands anticipating changes in the marketplace. Therefore, customer-driven excellence demands awareness of developments in technology and competitors offerings, as well as rapid and flexible response to customer and market changes.

Organizational and Personal Learning

Achieving the highest levels of business performance requires a well-executed approach to organizational and personal learning. Organizational learning includes both continuous improvement of existing approaches and adaptation to change, leading to new goals and/or approaches. Learning needs to be embedded in the way your organization operates. This means that learning (1) is a regular part of daily work; (2) is practiced at personal, work unit, and organizational levels; (3) results in solving problems at their source (root cause); (4) is focused on sharing knowledge throughout the organization; and (5) is driven by opportunities to effect significant change and to do better. Sources for learning include employees ideas, research and development (R&D), customers input, best practice sharing, and benchmarking.

Organizational learning can result in (1) enhancing value to customers through new and improved products and services; (2) developing new business opportunities; (3) reducing errors, defects, waste, and related costs; (4) improving responsiveness and cycle time performance; (5) increasing productivity and effectiveness in the use of all resources throughout your organization; and (6) enhancing your organizations performance in fulfilling its societal responsibilities and its service to your community as a good citizen.

Employees success depends increasingly on having opportunities for personal learning and practicing new skills. Organizations invest in employees personal learning through education, training, and other opportunities for continuing growth. Such opportunities might include job rotation and increased pay for demonstrated knowledge and skills. On- the-job training offers a cost-effective way to train and to better link training to your organizational needs and priorities. Education and training programs may benefit from advanced technologies, such as computer-and Internet-based learning and satellite broadcasts.

Personal learning can result in (1) more satisfied and versatile employees who stay with the organization, (2) organizational cross-functional learning, and (3) an improved environment for innovation.

Thus, learning is directed not only toward better products and services but also toward being more responsive, adaptive, and efficient giving your organization marketplace sustainability and performance advantages.

The Use of the Framework to Embody the Criteria

Other ways that the core values are embodied in the Baldrige Criteria can be seen in the Framework (Baldrige Model).

9.Amazingly, many colleges and universities would not be classified by Senge as "learning organizations." To do so, they would have to begin to practice what they teach. For example, colleges of business and engineering would have to go beyond just teaching about enhancing performance to applying it to their academic and administrative processes, also. Internal benchmarking could also be done within and between several different departments in a university. For example, the facilities department or group might show examples of excellent building and renovation projects to other administrative or academic departments, giving them the fine points of how to design, control, and improve their project management process. The College of Education might be able to provide best practices for classroom teaching in the Colleges of Business or Engineering. The business office might be able to provide suggestions for improvement and training in accounting and cost control for administrators in the academic departments.

10.Each of the principles used by geese has a quality parallel that should be considered. Many of them are so obvious as to make one wonder, how did those geese become so smart? or why are we so dumb? Organizations wishing to implement performance excellence might benefit from studying the behavior of geese and drawing the following parallels;a) This shows the synergistic value of teamwork. The team is able to provide more lift to the organization than any one individual, or the sum of their efforts when they work alone.

b) Going alone to reach a goal is possible, but generally not as productive, or as much fun.

c) The most powerful leaders are the ones that are not threatened by letting their subordinates take the lead from time to time. Not only does this help the leader to rest, but it also helps the employee to develop valuable leadership and problem-solving skills that can be used immediately and later.

d) Everyone needs encourage when performing a difficult task, especially if one is the leader. Too often the followers dont show appreciation for the leader, which makes their job more difficult.

e) This action by the geese shows concern for others. It also shows that teamwork is maintained, even when trying to assist someone that has fallen behind. The fact that two geese stay behind to help the third one is quite impressive. The cost may be worth the price, if the injured member is brought back to full productivity.

11. Student opinions may vary, but by this time in the course, they should be convinced of the value of quality, and that quality does pay. They should also consider what a world without a quality focus would mean, in terms of safety, security, and satisfaction with our products and services.SUGGESTIONS FOR PROJECTS, ETC.

1.Characteristics of leadership effectiveness should be identified by the students and may include: how senior leaders set clear values, set high expectations for performance, set expectations for performance improvement, build loyalty, build teamwork, promote initiative, encourage risk-taking, and clearly promote the purpose and function of the business over maintaining structure or executive privilege. Questions could be constructed on a scale of 1-7 or 1-10, with 1 = Strongly disagree and 7 = Strongly agree. For example, in setting clear values and high expectations, the questions might include:

Strongly disagree

Strongly agree

1 2 3 4 5 6 7

Senior leadership develops, commun- +-----+-----+-----+-----+-----+-----+

icates, and demonstrates clear values for

the organization.

1 2 3 4 5 6 7

Senior leadership sets, communicates, +-----+-----+-----+-----+-----+-----+

and supports high expectations for

performance throughout the organization.

1 2 3 4 5 6 7

Senior leadership sets, communicates, +-----+-----+-----+-----+-----+-----+

and supports high expectations for improving

performance throughout the organization.

2. Leadership styles will vary widely, depending on such factors as the type of organization, its size, and the philosophy of the top management. Expect to see any one of the styles listed in the chapter, including coaching, transactional, or transformational leadership, or a combination of two or more of these.

3.Conklins questions can provide a useful checklist for leadership styles. See his article, referenced in the question, for more background. They also provide a starting point for useful discussions of what is a leader. Keep in mind that there are hundreds of psychologically validated leadership inventories. We can only provide a brief introduction and overview in this chapter. For a more rigorous approach, consult one of the organization behavior professors in your universitys college of business or the management department.

4. This project will provide some interesting contrasts in cultural values, as students surf the Web for answers. You might point the students to some of the websites of Baldrige winners and some of the subjects of cases in this text, as a starting point.

5. Students will likely find a great deal of variation in terms of commitment to quality and performance excellence principles. In addition, there will be a lot of variation as to the keys to success of those that do have an on-going commitment. For more process-oriented manufacturing or service organizations, expect to see the five universal best practices exhibited, including:a.Cycle-time analysis

b.Process value analysis

c.Process simplification

d.Strategic planning

e.Formal supplier certification programsAlso, such organizations would seek to avoid or tear down barriers to successful implementation, such as:a. lack of what Deming called constancy of purposeb. lack of a holistic systems perspectivec. lack of alignment and integration with the organizational system.d. failure to focus on achieving a shared vision through development of a sound strategy and effective deployment.6. This project is designed to give students insights into how the Baldrige criteria are closely inter-related to core values and concepts. See answer to Discussion Question #7, above, as a resource for this project.7. This can be an interesting hands on project that may be beneficial to the students who are the interviewees, as well as those who are interviewing. It is likely that few students, even good ones, have analyzed how they go about learning, much less develop best practices. There is a whole literature in educational psychology on learning styles that might be explored.

8.See the answer to Review Question #10, above, as a resource for this project. Small and large companies differ in a number of ways in which they can implement TQ, whether they use a Baldrige, Six Sigma, or ISO 9000 approach. Small companies have less access to specialists, such as financial, technical (such as Six Sigma Black Belts), and human resources experts. They often cannot support sophisticated information systems to gather and analyze customer and process data. However, they do have some advantages over large organizations. They are more agile, thus able to respond quickly to changing customer needs. Because they are small, they are often closer to their customers and interact frequently with them. Employees often have been with the company for many years and are highly skilled and loyal. They will often respond to a problem or crisis by sticking with it until its solved. Quality can often be built in to products or services, because employees will see the need for it in order to remain competitive. Students should be encouraged to study some small and large companies in order to explore these differences.

9.The following table is meant to be a suggestive, but not exhaustive, list of characteristic changes in practices related to the Baldrige Criteria, as an organization moves from a traditional to a world-class quality system.

Baldrige

CategoryTraditional Management PracticesGrowing

Awareness of QualityQuality Management

SystemWorld-Class

Quality Management

1 Senior leaders job is to maintain the status quo by preventing change

Managers oversee departments or functions. Senior leaders job is to ensure that quality problems are brought to mgt.s attention

Managers oversee dept./functions to stop ext. failure Senior leaders job is to define and manage change toward a quality mgt. system

Managers guide depts/ functions to-ward quality prevention/appraisal Senior leaders job is developing vision and encouraging innovation and change.

Managers facilitate depts/ functions efforts to reach stretch goals

2 Senior leaders develop goals and pass down

Goals are zero-sum game - loser for every winner

Senior leaders develop goals in consultation with

middle managers

Goals are based on incentives for highest individual performers

Senior leaders and lower level mgrs. develop goals and resolve through give & take.

Goals are based on mutual trust and team efforts

Senior leaders develop mission and vision on which stretch goals are based and use a catchball process to deploy

Goals are cascaded with individual and team rewards for accomplishment

3 Customers are outsiders in the domain of marketing and sales

Customers have no impact on product design

Complaints are only reacted to Customers needs are the focus of marketing and sales

Customers have some impact on product design

Complaints are taken as a signal of quality problems

Customer/supplier dialogs on quality sometimes occur Customers are surveyed to determine satisfaction

Customers/suppliers are consulted in product design decisions

Complaints are handled system-atically and used for product/process improvement Customers are insiders in the domain of design, production, and marketing

Customers have a major impact on product design

Complaints are only a part of a complete customer management process

4 Control is achieved by pre-established inflexible responsive patterns

Information is generally considered to be secret Control is achieved by somewhat flexible responsive patterns

Information is generally considered to be confidential, but available Control is achieved by cooperative team efforts to improve processes

Information is considered to be widely available to those inside the organization Control is achieved by alignment with goals

Information is interlinked and is considered to be openly available unless proprietary or personally sensitive

5 People are an interchangeable commodity

Adversarial relation-ship between union and management

Hierarchical chimney structures prevent teamwork between functions.

Performance appraisal and reward systems place people in a competitive environment. People often have valuable unique skills and should be rewarded for indivi-dual contributions

Consultative relationship between union and mgt.

Chimney struct-ures need to be reduced to permit teamwork between functions.

Performance appraisal and reward systems need modifi-cation to reduce competitive environ-ment People should be encouraged to work in teams to solve problems

Cooperative relationships between union and management need to be developed

Chimney struc-tures virtually eliminated to enhance teamwork between functions.

Performance appraisal and reward systems modified by team and/or goal-based reward systems People should be empowered to work individually and in teams to meet individual and organizational goals

Relationships between union and management based on full partnership

Cross-functional and team, and project structures virtually eliminate hierarchy.

Performance appraisal and reward systems replaced by team, goal, and knowledge-based reward systems

6 Processes are seen as a collection of separate, specialized units, in a functional hierarchy.

Suppliers are pitted against each other to obtain the lowest price

Processes are seen as a collection of separate units, in a functional hierarchy, but cross-functional activities require a coordinative mechanism.

Suppliers are selected, based on performance to obtain better quality and service at an acceptable price Reorganization of processes of some separate units, out of the functional hierarchy, is seen as advantageous

Suppliers are consulted for critical design information and given support in efforts to develop improved products and services

Processes are seen as a system of interdependent processes linking the organization to customers and suppliers

Suppliers are partners with their customers. Goal is to have few sup-pliers and establish long-term relationships

7 Results are pri-marily stated financially

Any negative deviation is a cause for corrective action and search for a scapegoat Results are pri-marily stated in financial and market terms

Any negative deviation is a cause for corrective action Results are stated in financial, market, operating, quality metrics

Any negative deviation is a cause for correction after some investigation, and development of a new tracking measure, if required Results are stated as a balanced scorecard

Benchmarking and historical comparisons are used for setting goals, tracking, and improvement.

Any negative deviation is a cause for investigation using existing goals and metrics before any corrective action is taken

10.This project suggests that the quality life-cycle of development, perhaps using Figure 9.4, the Baldrige Roadmap to Performance Excellence, would provide a visual model of the process for pursuing performance excellence from start to (Baldrige Award-winning) world-class performance. Also, the IQS Best Practices Report could also be used to suggest which areas to concentrate on at each stage. For example, organizations starting out on the road to performance excellence can reap the highest benefits by concentrating on fundamentals, including: departmental and cross-functional teamwork, training in customer relationships, problem solving and suggestion systems, using internal customer complaint systems for new product and service ideas, emphasizing cost reduction when acquiring new technology, using customer satisfaction measures in strategic planning, increased training for all levels of employees, and focusing quality strategy on building it in and inspecting it in. Once these fundamentals are in place, they can move on to practices such as department-level improvement teams, training employees in problem solving and other specialized topics, listening to supplier suggestions about new products, emphasizing the role of enforcement for quality assurance, making regular and consistent measurements of progress and sharing quality performance information with middle management, and emphasizing quality as a key to an organizations reputation. Finally, organizations that have a solid quality system in place can gain the most from providing customer-relationship training for new employees, emphasizing quality and teamwork for senior management assessment, encouraging widespread participation in quality meetings among non-management employees, using world-class benchmarking, communicating strategic plans to customers and suppliers, conducting after-sales service to build customer loyalty, and emphasizing competitor-comparison measures and customer satisfaction measures when developing plans. The study also showed that certain practices could have a negative impact on performance if applied inappropriately. For example, organizations at the early stages of the quality journey do not benefit from process benchmarking while those that have solid systems in place attain no benefit from increased training. From there, questions from the Baldrige criteria could be sorted out and prioritized.ANSWERS TO CASE QUESTIONSCase - The Distinguished Ad Agency1. Novedad and the Steering Committee made mistakes in the initial development of the protocols and documentation and the early implementation stage because of the pressures to perform a quick fix. Much of the documentation had been written by the quality manager and edited by the president. Review by managers and supervisors, who were asked to implement applicable elements in their departments, was minimal. Consequently, many of the procedures and instructions did not reflect work realities. They depicted an ideal and were ultimately challenged as supervisors and process operators tried to implement them. But, since the clock was ticking and Megaproducts was threatening to cancel orders, implementation proceeded with promises of a complete quality management system revision once improvements were in place.

2. Despite the fact that early implementation steps were handled well, with gaps and shortfalls identified and proposed solutions recommended, implementation was chaotic. Because of time, it was assumed that acceptance and adoption would be automatic. There were numerous indications that things were not proceeding as planned. Managers, not wanting to appear unsure of their changed responsibilities and authority, clung to the status quo. Trainingwhen donefocused on lower level employees, which left supervisors without a good understanding of new requirements. They were caught saying one thing but doing another. Interfaces between departments and individuals, although described in an organizational chart and statements of authority and responsibility, were not truly functional. System workflow faltered because new relationships and interdependencies encountered old departmental barriers. Audit reports and corrective actions languished because the president periodically overrode the quality managers authority, fearing delivery promises might be compromised.

Indications such as the above were ignored because the steering committee members rationalized that everyone knew what needed to be done, due to the fervent efforts exerted in solution finding. Improvement efforts were not very effective because concluding steps were inadequately thought through and poorly managed. Proposed solutions were not completely integrated into daily activities.

3. Now that Novedad and the Steering Committee have received their wake-up call, a number of steps should be taken to revise and implement an improved, workable quality management system. These include:a. Define the need for making improvements include communicating the scope of the problem, types of complaints and errors being made, types of waste being experienced, and benefits of improvements. This might be done by sending a letter from the president to all employees, and by posting information prominently in work areas.b. Develop and transmit the purpose for the improved quality management process it must be brief; it should appeal to employees, customers, and stakeholders; and it must contain a challenging, but attainable goal. This might be done by the Steering Committee by affirming the mission and vision for the quality management process and c. Identify work alliances and connections for implementation the Steering Committee might meet with departmental representatives, informal leaders, and others to build trust and seek ideas on how to structure improvement processes and projects.

d. Create a plan the Steering committee might revise the improvement plan, setting clear, measureable goals with a timeline.

e. Empower people the Steering Committee should ensure that training is provided, representative project teams are established, perhaps with teams electing their leaders, support is given to overcome bureaucratic barriers, and projects are reported on regularly to provide visibility and momentum.f. Create opportunities for small gains if the Steering Committee can guide teams to pick the low hanging fruit first, the small wins will lead to a sense of accomplishment and confidence to tackle the more challenging problems. For example customer complaints might be handled, and processes for preventing them might be developed.g. Expand and complete projects projects bypassed in initial rounds of improvement, such as analyzing and simplifying complex processes, might be taken on by mature project teams. h. Reinforce the improved structures the Steering Committee should evaluate new organization structures, monitor project team activities and results, celebrate accomplishments, and begin to make the quality management process an integral part of the strategic and action planning structure of the organization. Case - Novel Connect - Leadership1. The factors in the Organizational Profile that are the most important in evaluating their Senior Leadership approaches are: Purpose: Facilitates a world on the move. Vision: the most innovative company for mobile communication in the world. Mission: leverages new and existing technology to advance mobile communication. Core values: agility, valuing employees/partners, innovation, and sustainability

Culture promotes core competencies of agility and communication: working out of the home, flexible work schedules, and maximizing technology (cell phones, virtual meetings, teleconferencing) to minimize travel.

4,188 employees make up a virtual, distributed workforce: 1,200 in innovation (sales, R&D, marketing, IT, and product engineering), 2,738 in operations, and 250 in administration and support. There is no employee union. Women compose 65% of the workforce; 50% of employees are under age 40; for 20%, English is a second language; and 15% are disabled.

Organizational structure: A nine-member Board of Directors (BOD) composed of eight independent members and the CEO, four standing BOD committees, and a five-member Senior Leader Team (SLT). The relatively flat organization has one rotating ethics officer, and the 11 pods have team leaders.

Key suppliers/partners: two offshore manufacturing suppliers (in China and India), a cell carrier, retailers, transportation companies, integrated component/software manufacturers, universities, IT support, a security company, and a law firm

Strategic challenges: communication, rapidly changing customer/market needs (volatility in niche markets), volatility of the overseas environment2. Based on their response in Category 1 to the 2008 Baldrige criteria questions for this category, Novel Connects strengths, weaknesses and opportunities for improvement are as follows:1.1 Senior Leadership

STRENGTHS

In 1994, Novel Connects Senior Leadership Team (SLT) conducted brainstorming and planning sessions to establish the organizations vision and core values, which were refined in 1996, 2000, and 2002 and, along with the organizations mission, have undergone an annual review since 2003. SLT members lead at least one project each year that exemplifies a core value and also lead weekly discussions to explore the core value with employees. The Novel Path (Figure 1.1-1) depicts the organizations leadership system, performance management process, and organizational reviews and includes the mission, vision, and core values. It is deployed to employees as part of the performance appraisal process (e.g., through the personal measuring of action and performance [PMap]) and to customers and stakeholders through marketing materials, funding events, and surveys. Partners are required to demonstrate the core values as part of the partner selection process. In addition, the Novel Path is integrated with the strategic planning and communication processes.

Senior leaders promote an ethical environment through numerous approaches, including requiring employees to sign a Code of Ethical Compliance annually, assigning a rotating

Chief Ethics Officer from the SLT to investigate and solve ethical concerns, and developing Ethics Examples that are discussed with all employees and key suppliers/partners during monthly meetings. Written Ethics Examples are followed up with monthly ethics videos showing senior leaders discussing the issue and conveying which response would most closely align with the Novel Path.

Senior leaders create an environment for organizational performance improvement and the accomplishment of the organizations mission and objectives through several systematic approaches, such as the Performance Improvement Process (PIP), which includes the continuous improvement cycle of Design, Measure, Analyze, and Improve (DMAI, Figure 6.2-1); mobile monthly meetings (Triple-Ms); weekly operational reviews; and the deployment of objectives and action plans to the workforce, suppliers, and partners. Innovation is encouraged through the expectation for employees to spend 10% of their time on innovation, the use of the Innovation Process to develop and select ideas, and rewards and recognition for innovative ideas and acquisition of patents (e.g., the Pathways Innovation Award and Bright Idea Award). In addition, as part of Novel Connects sustainability approaches (Figure 1.1-2), the Novel Path is integrated into all leadership and workforce practices and decisions, and formal succession plans identify three potential leaders for all leadership positions.

Senior leaders use a wide variety of communication mechanisms (Figure 1.1-4) to

communicate with and engage the workforce. Two levels of communication (with the

supervisor only and with the supervisor and work unit) occur each week for employees, and

each communication approach provides ways for employees to ask questions and suggest

other topics. Leaders have the primary responsibility for communicating with employees,

including sharing information on decisions and the rationale behind them.

OPPORTUNITIES FOR IMPROVEMENT

While senior leaders annually select up to three areas to improve in the leadership system, it is not clear whether these include a systematic review and improvement of key leadership approaches, such as processes to ensure ethical and legal behavior, to foster organizational sustainability, and to facilitate organization-wide communication. Without systematic evaluation and improvement in these areas, it may be difficult for Novel Connect to ensure it is meeting its expectations of continuous improvement in all of its key processes, including how senior leaders guide and sustain the organization.

It is not evident that communication methods are effectively deployed to all employees and to all suppliers and partners, including overseas partners. For example, Spanish-speaking employees are able to enter their ideas in Spanish into an entry screen in the companys Measuring Action and Performance (MAP) database, but it is not clear whether meetings, newsletters, daily e-mails, and video discussions are conducted in multiple languages for the 20% of the workforce who consider English a second language, as well as for overseas suppliers in China and India. This may inhibit Novel Connect from effectively addressing its key strategic challenge and core competency regarding communication.1.2 Governance and Social Responsibilities1. For Category 1.2, the factors in the Organizational Profile that are the most important in evaluating their Governance and Social Responsibilities approaches are:

Core values: agility, valuing employees/partners, innovation, and sustainability

The regulatory environment includes the Wireless Telecommunications Bureau (WTB) of the Federal Communications Commission (FCC), the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), the Securities and Exchange Commission (SEC), IPC-A-610, the International Organization for Standardization (ISO), the Help Desk Institute (HDI), and the TL9000/QuEST Forum.

Organizational structure: A nine-member Board of Directors (BOD) composed of eight independent members and the CEO, four standing BOD committees, and a five-member Senior Leader Team (SLT). The relatively flat organization has one rotating ethics officer, and the 11 pods have team leaders.

Serves only the U.S. market. Seventh-largest manufacturer of cell phones, with approximately a 3% market share, and the fourth-largest supplier of ringtones. $3.25 billion in sales, with approximately 26.6 million phones sold in 2007. The focus is on profit, rather than growth.

Key suppliers/partners: two offshore manufacturing suppliers (in China and India), a cell carrier, retailers, transportation companies, integrated component/software manufacturers, universities, IT support, a security company, and a law firm

Founded in 1994 as a private company; it went public in 2002.2. Based on their response in Category 1.2 to the 2008 Baldrige criteria questions for this category, Novel Connects strengths, weaknesses and opportunities for improvement are as follows:

STRENGTHS

Novel Connect evaluates the performance of all senior leaders. The Board of Directors

(BOD) reviews the CEO/President annually, and she in turn consults with the BOD Executive Governance Committee to review SLT performance. All leaders must participate in a 360-degree feedback process, which provides the basis for behavior reviews. The BOD conducts annual self-evaluations with feedback from the SLT and in 2007 initiated an approach to obtain shareholder feedback at its annual meeting. Using that feedback, the BOD selects up to two improvement areas annually. Senior leaders use these reviews to improve their leadership effectiveness through the use of PMaps. In addition, the SLT reviews an aggregate summary of all of its performance reviews and selects up to three initiatives annually that are aimed at improving the leadership system.

Novel Connect promotes and helps ensure ethical behavior in its interactions through multiple approaches, including reissuing the ethics policy annually, requiring employees and suppliers to sign the Code of Ethical Compliance, maintaining an ethics hotline, discussing Ethics Examples scenarios at monthly meetings, terminating employment for ethical violations, and rotating the position of Chief Ethics Officer among SLT members, a practice that has been featured in both industry and national publications. These approaches assist Novel Connect in meeting its workforce requirement of connection with the companys values.

Novel Connect actively supports its key communities through numerous approaches, including a foundation established in 2002. The foundation provides funds for four primary causes (i.e., mobility, environment, education, safety) that are aligned to the core value of sustainability. Foundation processes are evaluated annually, and recipients must prove the efficacy of their efforts. Other approaches include matching funds for employees charitable donations and 16 hours of paid time off annually for community service. In addition, senior leaders are expected to serve leadership roles in at least one national and two regional or local nonprofit organizations that focus on work aligned with Novel Connects core values.

OPPORTUNITIES FOR IMPROVEMENT

While SLT members participate in process improvement and operational performance reviews, it is unknown how they systematically review and achieve fiscal accountability. For example, systematic approaches are not described for achieving Sarbanes-Oxley Act (SOX) and Securities and Exchange Commission (SEC) compliance, and it is not clear what financial data are reviewed in monthly and weekly meetings beyond the two profit-specific measures in the Novel Compass Scorecard. The lack of an effective process and tracking measures may make it difficult for Novel Connect to ensure the protection of stakeholder and stockholder interests.

It is unclear how Novel Connect addresses the adverse impacts on society from partners and suppliers operations associated with Novel Connects products and services. For example, it is not apparent that the resource-sustaining approaches used in the U.S. manufacturing facility are also used in the manufacturing plants in China and India. Additionally, there is no evidence of systematic review and improvement of Novel Connects resource-sustaining processes, including the key processes for addressing risks associated with its products, services, and operations (e.g., Go-Green/Grow-Green and Customer Advisory Groups [CAGs]).

Some of the approaches used to ensure ethical and legal behavior do not appear to be well deployed and/or systematically improved. For example, while Novel Connect reviews relationships and transactions in offshore facilities to ensure they comply with U.S. laws and align with the Novel Path, it is unclear if the ethics investigation/resolution process is deployed to all suppliers and partners. In addition, there is no evidence of reviews of or improvements in ethics-related approaches, including the ethics hotline, the Code of Ethical Compliance, and ethics scenarios and follow-up discussions.3. a. Specific advice for Category 1.1, that might help Novel Connect, would include:

the need to develop a systematic review and improvement of key leadership approaches, such as processes to ensure ethical and legal behavior, to foster organizational sustainability, and to facilitate organization-wide communication.

the need for implementing and effectively deploying communication methods to all employees and to all suppliers and partners, including overseas partners. For example, Novel Connect should insure that meetings, newsletters, daily e-mails, and video discussions are conducted in multiple languages for the 20% of the workforce who consider English a second language, as well as for overseas suppliers in China and India. 3. b. Specific advice for Category 1.2, that might help Novel Connect, would include:

need to develop a way to systematically review and achieve fiscal accountability. For example, systematic approaches are not described for achieving Sarbanes-Oxley Act (SOX) and Securities and Exchange Commission (SEC) compliance. Also, there is a need to review financial data in monthly and weekly meetings beyond the two profit-specific measures in the Novel Compass Scorecard.

need to develop a way for Novel Connect to address the adverse impacts on society from partners and suppliers operations associated with Novel Connects products and services. Additionally, there needs to be a process for systematic review and improvement of Novel Connects resource-sustaining processes, including the key processes for addressing risks associated with its products, services, and operations (e.g., Go-Green/Grow-Green and Customer Advisory Groups [CAGs]).

need to ensure that ethical and legal behavior are well deployed to all suppliers and partners and/or systematically improved. Also the company needs to ensure that a process for reviews of or improvements in ethics-related approaches, including the ethics hotline, the Code of Ethical Compliance, and ethics scenarios and follow-up discussions is developed and deployed.For all of the above, tools and approaches may be found in the Baldrige process, which specifically recommends that: Implementing Baldrige requires repetitive cycles of self-assessment, priority-setting, action planning to address gaps and opportunities for improvement, and reflection of results, all driven by an organizations vision, strategic challenges, and capabilities.

Case - The Parable of the Green Lawn

1.This parable shows that many of the common failings of TQ transformation efforts and attempts to improve business processes are common to everyday experiences away from the job, as well. As "Pogo," the character who played the title part in a 1960's and '70's cartoon series used to say, "We have met the enemy, and he is us!"

2.Many common problems encountered on the path to TQ are contained in this story:

Equating higher price with higher quality

Jumping right into a program without first preparing the groundwork by finding