Quality & Performance

Excellence, 8th Edition

Chapter 11

Performance Excellence
and
Organizational Change

S
 Outline

 Explain the importance and scope of organizational change

 Explore how organizations build a strong quality culture,

sustain performance, and continually improve

 Provide some examples of firms undertaking these changes

 Explain how TQ perspectives on organizational change

relate to organization theory.

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Organizational Change Realities

 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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 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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Strategic vs. Process Change

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 Cultural Change

 Culture – the set of beliefs and values shared

by the people in an organization.
 Cultural values often seen in mission and
vision statements
 Firms pursuing TQ often need cultural
change
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 Elements of a Performance
Excellence Culture
 Systems perspective  Managing for innovation

 Visionary leadership  Management by fact

 Customer-focused  Societal responsibility

excellence
 Ethics and transparency
 Valuing people
 Delivering value and
 Organizational learning results
and agility
 Focus on success
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 Why Adopt a Performance
Excellence Philosophy?

 Reaction to competitive threat to

profitable survival
 An opportunity to improve

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 Requirements for Building and
Sustaining Performance Excellence

 Readiness for change

 Sound practices and implementation

strategies
 Effective organization

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 Perspectives on 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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 American Express Change
Process

 Scope the change—why are we doing this?

 Create a vision—what will the change look like?

 Drive commitment—what needs to happen to make the change

work?
 Accelerate the transition—how are we going to manage the
effort on an ongoing basis?
 Sustain momentum—what have we learned and how can we
leverage it?

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People Roles in Organizational
Change

 Senior management – remove barriers

 Middle management – be supportive

 Workforce – create ownership

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Transforming Middle Managers to
Change Agents

 Empower
 Create a common vision of excellence
 Create new organizational rules
 Implement continuous improvement
 Develop and retain peak performers

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 Common Implementation Mistakes
(1 of 3)

 Change is regarded as a short-term “program”

 Compelling results are not obtained quickly

 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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Common Implementation Mistakes
(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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Common Implementation Mistakes
(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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 Life Cycles of Quality Initiatives

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

 Regeneration: when a new quality initiative is used in conjunction with
an existing one to generate new energy and impact.
 Energizing: when an existing quality initiative is refocused and given
new resources.
 Maturation: when quality is strategically aligned and deployed across
the organization.
 Limitation or stagnation: when quality has not been strategically driven
or aligned.
 Decline: When a quality initiative has had a limited impact, is failing
and the initiative is awaiting termination.
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Baldrige Roadmap to Performance
Excellence

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 Self Assessment: Basic Elements

 Management involvement and leadership

 Product and process design
 Product control
 Customer and supplier communications
 Quality improvement
 Employee participation
 Education and training
 Quality information

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 Importance of Follow-Up of Self-
Assessment Results

 Many organizations derive little benefit from

conducting self-assessment and achieve few of the
process improvements suggested by self-study
 Reasons:
 Managers do not sense a problem
 Managers react negatively or by denial
 Managers don’t know what to do with the information

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Leveraging Self-Assessment Findings

 Prepare to be humbled

 Talk through the findings

 Recognize institutional influences

 Grind out the follow-up

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 Knowledge Management

 The process of identifying, capturing, organizing,

and using knowledge assets to create and sustain
competitive advantage.
 Knowledge assets refer to the accumulated
intellectual resources that an organization
possesses, including information, ideas, learning,
understanding, memory, insights, cognitive and
technical skills, and capabilities.
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 Types of Knowledge

 Explicit knowledge includes information

stored in documents or other forms of
media.
 Tacit knowledge is information that is
formed around intangible factors
resulting from an individual’s experience,
and is personal and content-specific.
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 Organizational Learning

 Create a “learning organization”

 Planning
 Execution of plans
 Assessment of progress
 Revision of plans based on assessment
findings

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 Key Activities of Learning
Organizations

 Systematic problem solving

 Experimentation with new approaches
 Learning from their own experiences and history
 Learning from the experiences and best practices
of others
 Transferring knowledge quickly and efficiently
throughout the organization
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 Internal Benchmarking

 …the ability to identify and transfer best practices within the

organization
 Process:
 Identify and collect internal knowledge and best practices
 Share and understand those practices
 Adapt and apply them to new situations and bringing
them up to best-practice performance levels.

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Organizational Change in Action

 Boeing

 Motorola

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 Organizational Change Theory

 Organizational models :
 Weisbord’s “six box” model
 Nadler and Tushman’s congruence model
 McKinsey “seven-s” model
 Tichy’s change framework and TPC (technical,
political, cultural) matrix
 Burke-Litwin model

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 Teleological Perspective

 Organizations change through an

iterative process of goal setting,
implementation, evaluation, and revision
 Change is a deliberate undertaking by
individuals affiliated with the
organization

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 Organizational Change and
Total Quality
 Reason for change
 Traditional: productivity or job satisfaction
 TQ: customer satisfaction

 Source of change
 Both: top management

 Types of change
 Traditional: limited in scope and duration
 TQ: continuous improvement over a long period of time

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 Principles for Managing
Change
 Unfreeze attitudes and behavior
 Have effective leadership
 Manage interdependence
 Involve the people
 Refreeze to make gains permanent

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