Building and

Sustaining
Performance
Excellence in
Organizations
© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1
 Key Idea
Building and sustaining performance
excellence requires a readiness for
change, the adoption of sound practices
and implementation strategies, and an
effective organizational infrastructure.

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Why Adopt a Performance
Excellence Philosophy?
 Reaction to competitive threat to profitable
survival
 An opportunity to improve

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Selling the TQ Concept
• Learn to think like top • Focus on getting an early
executives win, even if it is small
• Position quality as a way • Ensure that efforts won’t be
to address priorities of undercut by corporate
stakeholders
accounting principles
• Align objectives with
those of senior • Develop allies, both
management internal and external
• Make arguments • Develop metrics for return
quantitative on quality
• Make the first pitch to • Never stop selling quality
someone likely to be
sympathetic
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Organizational Culture and
Performance Excellence
 (Corporate) culture is a company’s value system
and its collection of guiding principles
 Cultural values are often seen in mission and
vision statements
 Quality and performance excellence must
define and drive the culture of an organization

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
Culture is reflected by the management
policies and actions that a company practices.
Therefore, organizations that believe in the
principles of quality and performance
excellence are more likely to implement the
practices successfully. Conversely, actions set
culture in motion. As quality practices are used
routinely within an organization, its people
learn to believe in the principles, and cultural
changes can occur.
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Baldrige Core Values and
Concepts
 Visionary leadership  Focus on the future
 Customer Driven  Managing for
 Organizational and innovation
personal learning  Management by fact
 Valuing employees and  Social responsibility
partners  Focus on results and
 Agility creating value
 Systems perspective

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Cultural Change
 Change can be accomplished, but it is difficult
 Imposed change will be resisted
 Full cooperation, commitment, and participation
by all levels of management is essential
 Change takes time
 You might not get positive results at first
 Change might go in unintended directions

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
Impatient managers often seek immediate
cultural change by adopting off-the-shelf
quality programs and practices, or by
imitating other successful organizations. In
most cases, this approach is setting
themselves up for failure.

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Building on Best Practices
 Universal best practices
 Cycle time analysis
 Process value analysis
 Process simplification
 Strategic planning
 Formal supplier certification programs

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Best Practices: Infrastructure
Design (1 of 3)
 Low performers
 process management fundamentals
 customer response
 training and teamwork
 benchmarking competitors
 cost reduction
 rewards for teamwork and quality

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Best Practices: Infrastructure
Design (2 of 3)
 Medium performers
 use customer input and market research
 select suppliers by quality
 flexibility and cycle time reduction
 compensation tied to quality and teamwork

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Best Practices: Infrastructure
Design (3 of 3)
 High performers
 self-managed and cross-functional teams
 strategic partnerships
 benchmarking world-class companies
 senior management compensation tied to quality
 rapid response

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Implementing Total Quality:
Key Players
 Senior management
 Middle management
 Workforce

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
Organizations contemplating change must
answer some tough questions, such as,
Why is the change necessary? What will it
do to my organization (department, job)?
What problems will I encounter in making
the change? and perhaps the most
important one — What’s in it for me?

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Strategic vs. Process Change
 Strategic change is broad in scope and stems
from strategic objectives, which are generally
externally focused and relate to significant
customer, market, product/service, or
technological opportunities and challenges.
 Process change is narrow in scope and deals
with the operations of an organization. An
accumulation of continuously improving
process changes can lead to a positive and
sustainable culture change.
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Contrasts

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
There are numerous barriers to
transforming organizations to a sustained
culture of performance excellence.
Understanding these barriers can help
significantly in managing change
processes.
Perhaps the most significant failure
encountered in most organizations is a
lack of alignment between components
of the organizational system.
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Common Mistakes in TQ
Implementation (1 of 3)
 Quality initiative is regarded as a “program”
 Short-term results are not obtained
 Process not driven by focus on customer,
connection to strategic business issues, and
support from senior management
 Structural elements block change
 Goals set too low
 “Command and control” organizational culture
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Common Mistakes in TQ
Implementation (2 of 3)
 Training not properly addressed
 Focus on products, not processes
 Little real empowerment is given
 Organization too successful and complacent
 Organization fails to address fundamental
questions
 Senior management not personally and visibly
committed
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Common Mistakes in TQ
Implementation (3 of 3)
 Overemphasis on teams for cross-functional
problems
 Employees operate under belief that more data
are always desirable
 Management fails to recognize that quality
improvement is personal responsibility
 Organization does not see itself as collection of
interrelated processes
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Sustaining the Quality
Organization
 View quality as a journey (“Race without a
finish line”)
 Recognize that success takes time
 Create a “learning organization”
 Planning
 Execution of plans
 Assessment of progress
 Revision of plans based on assessment findings
 Use Baldrige assessment and feedback
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
Organizations are dynamic entities.
Managers must consider the dynamic
component in order to deal with instability
in the environment, imperfect plans, the
need for innovation, and the common
human desire for variety and change.

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Activities of Learning
Organizations
 Systematic problem solving
 Experimentation with new approaches
 Learning from their own experiences and
history
 Learning from the experiences and best
practices of others
 Transferring knowledge quickly and efficiently
throughout the organization

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Self Assessment: Basic
Elements
 Management involvement and leadership
 Product and process design
 Product control
 Customer and supplier communications
 Quality improvement
 Employee participation
 Education and training
 Quality information
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
Self-assessment should identify both
strengths and opportunities for
improvement, creating a basis for
evolving toward higher levels of
performance. Thus, a major objective
of most self-assessment projects is the
improvement of organizational
processes based on opportunities
identified by the evaluation.
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Importance of Follow-Up of
Self-Assessment Results
 Many organizations derive little benefit from
conducting self-assessment and achieve few of
the process improvements suggested by self-
study
 Reasons:
 Managers do not sense a problem
 Managers react negatively or by denial
 Managers don’t know what to do with the
information
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Idea
Following up requires senior leaders to
engage in two types of activities: action
planning and subsequently tracking
implementation progress.

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Leveraging Self-Assessment
Findings
 Prepare to be humbled
 Talk through the findings
 Recognize institutional influences
 Grind out the follow-up

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Implementing ISO 9000
 Start with a quality policy that identifies key
objectives and basic procedures
 Develop a quality manual to document the
procedures
 Use internal audits to maintain procedures
 Provide adequate resources

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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Implementing Six Sigma
 Committed leadership
 Integration with existing initiatives, business
strategy, and performance measurement
 Process thinking
 Disciplined customer and market intelligence
gathering
 A bottom line orientation
 Leadership in the trenches
 Training
 Continuous reinforcement and rewards
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© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.