BI-109

Business Culture

I am not much of an optimist but it is astonishing to witness the degree to which the quality issue has become a part of the corporate debate in a more sceptical Western Europe and US in the space of just 10 to 12 years. There are upwards of 380 million Western Europeans and 250 million Americans, and our business men are all talking about quality. Thats quite an achievement.

Tom Peters 1985

The Fundamental Concepts of Excellence

Leadership
Key driver for any organisation Is a managed process Makes the difference between winning and losing Effectiveness of which can be assessed

Policy & Strategy

There are those who make things happen ... those who watch things happen ... . and those who say WHAT HAPPENED?

People
It is the people that MAKE THINGS HAPPEN

In the future, organisations will be heavily dependent on KNOWLEDGE-BASED MANAGEMENT

Partnerships and Resources

WHAT YOU PUT IN IS WHAT YOU GET

Processes
DETERMINE CUSTOMER NEEDS TRANSLATE CUSTOMER NEEDS PRODUCE CUSTOMER REQUIREMENTS DELIVER CUSTOMER REQUIREMENTS MANAGE CUSTOMER RELATIONSHIP

Customer Results
It doesnt matter what you do, it is customer perception of you which really counts

People Results
Evidence point out that Direct correlation people motivation & satisfaction to increases in productivity, profitability and corporate performance overall

Society Results
ZERO EMISSION

ZERO ACCIDENT

ZERO RISK

ARE REAL & AFFECT DIRECTLY THE FUTURE OF ORGANISATIONS

Key Performance Results

VALUE, PERFORMANCE, GROWTH, PROSPERITY & SUSTAINABILITY ARE WHAT ORGANISATIONS ARE MEANT TO ACHIEVE After all, isnt this the real purpose of creating organisations in the first place?

LEARNING FROM THE BEST MOTOROLA INC.

Six Sigma Quality Participative Management Program (PMP) Benchmarking Employee Involvement Customer Focus

LEARNING FROM THE BEST MOTOROLA INC.

Sales in 1987 totalled $6.7 billion Most products have increased their market share, in the US and abroad Customer Satisfaction

LEARNING FROM THE BEST

WESTINGHOUSE ELECTRIC CORP.
Management Leadership Total Quality Culture Product and Process Leadership Human Resource Excellence Customer Service Plans created for each client

LEARNING FROM THE BEST

WESTINGHOUSE ELECTRIC CORP.
High levels of customer satisfaction Yields in the manufacture of fuel rods increased from less than 50% to 87% Substantially reduced scrap, product reworking, and manufacturing cycle time Achieved over 3 years 100% on-time delivery of high quality products

LEARNING FROM THE BEST

STMicroelectornics, Inc.
Management for quality A 5 year technology roadmap updated every 6 months Annual Supplier Quality & Service Plan Strong emphasis on cultivating customer loyalty Promotion of team work and employee empowerment Learning faster than key competitors A flattened organisational structure and emphasis on training

LEARNING FROM THE BEST

STMicroelectornics, Inc.
Supplier-management program earned Best In Class rating in an independent evaluation of performance in 19 benchmark areas Employee satisfaction levels in 1999 exceeded the industry composite in 8 out of 10 categories Improvement and significant performance over Semi-conductors Industry Association (SIA) average, as well as competitors average

LEARNING FROM THE BEST

RANK XEROX (UK) Ltd
Customer satisfaction and loyalty Valuing and empowering employees Monitoring and measuring against specific targets Providing superior return to shareholders The use of technology to deliver market leadership Behaving responsibly as a corporate citizen Benchmarking business models and processes

LEARNING FROM THE BEST

RANK XEROX (UK) Ltd
Profitable revenue growth Satisfied and loyal customers Consolidated market Share

LEARNING FROM THE BEST

YELLOW PAGES
Becoming involved with customers Becoming involved with suppliers Saying thank you recognition and awards to individuals and teams People management ensuring people get satisfaction from and feel rewarded for their effort Releasing the potential of human resources

LEARNING FROM THE BEST

YELLOW PAGES
Developing team spirit Developing effective communication Caring for people Providing a firm grounding in information Communicating Policy & Strategy Financial strategies Identifying key processes

LEARNING FROM THE BEST

YELLOW PAGES
Good customer satisfaction record (95% of customers intend to repurchase next year customer retention average 7 years for advertisers, 15 years for large customers) Services are used 5 times more than the nearest competitor 90% of advertisers regard them as good value for money Efficiency and effectiveness more effective at selling, beaten efficiency targets Sales per employee has increased likewise profits delivered to shareholders

TQM - Cost or Investment?

Year Company Stock Growth (Oct 94) 1988 Motorola 373.0% 1988 Westinghouse (CNFD) - 49.6% 1989 Xerox (BPS) 75.9% 1990 General Motors 1.6% 1990 Federal Express 10.6% 1990 IBM (IBM Rochester) - 34.9% 1991 Selectron 526.9% 1992 AT&T (UCS) 32.2% 1992 AT&T (TSBU) 32.2% 1992 Texas Instruments (DS&E) 106.8% 1993 Zytec 8.4% 1994 Eastman Chemical 18.5% Total Stock Value 23016 (91.8%+) Standard & Poor 500 Stock value 15911 (32.6%+)
Source: US Dept. of Commerce Study 1995

QUALITY PAYS OFF

1988 - 1998 Publicly Traded Award Recipients (Source NIST 2000)
1988-1998 Award Recipients Standard and Poors (S&P) 500 $ Investment 8,883.31 8,883.31 $ Value - 12/1/99 83,617.73 28,564.67 Change 841.29% 221.55%

1988 - 1998 Publicly Traded Whole Company Award Recipients

$ Investment $ Value - 12/1/99
1988-1998 Award Recipients Standard and Poors (S&P) 500 6000 6000 72,043.00 19,653.85

Change
1100.74% 227.56%

Bradford Study 1996

81% had higher sales turnover per employee 81% had higher productivity per employee 74% had higher employee remuneration 65% had higher profit per employee 62% had higher net asset turnover ..than their peer group

Critical Success Factors Critical Success Factors Critical Success Factors Quality Assurance Programs Process documentation and Qualification Quality Assurance Standards-ISO etc Quality Manuals Process Manuals Software QA Quality Assurance everybodys responsibility Quality Assurance Standards ISO-9000/1400 (ISO 9000/14000) 1980s to 1990s Quality Management Customer Satisfaction Strategic Planning People and Change Management Process Improvement Impact on Society Quality Award Maturity Model Performance Measurement Teamwork

Critical Success Factors Product Testing Statistics Workmanship Control Complaints 1960s to 1970s Quality Control

1970s to 1980s Quality Assurance

1990s to Current Total Quality Management

Evolution from Quality Control to Total Quality Management

1988 (World Class) Product Orientation Six Sigma Statistical Variation Meas Cycle Time Reduction Process Efficiency Product Reliability Zero Defects Continuous Improvement Cost Reduction Quality Circles Technology Customer Service Employee Incentive Product Design Flexible Job Assignment Employee Training/Skills Quality Culture Quality Leadership Benchmarking

Service orientation Customer Service Service Delivery Responsiveness Quality Audits Service Business Improv. Customer Satisfaction Process Mapping Service Delivery Employee Training/Skills Quality Culture Service Reliability Flexible Job Assignment Right First Time Continuous Improvement Quality Leadership Customer Complaints Process Improvement Communications

Customer Orientation Customer Satisfaction Customer Loyalty Customer Complaints Customer Retention Customer Service Innovation Responsiveness Customer Partnership Employee Training/Skills Quality Culture Continuous Improvement Quality Leadership Flexible Job Assignment Right First Time Process Improvement Communications Accountability Service Reliability

1999 (World Class) Market Orientation Quality Management Customer Loyalty Supplier Management Customer Service Customer Relationships Innovation Responsiveness Employee Empowerment Policy Deployment Benchmarking Process Improvement Stakeholder Management Continuous Improvement Environmental Impact Societal Impact Quality Culture Process Mapping Quality Leadership

Evolution and History of TQM Path

Main Focus
Market analysis Specification Design Manufacture Inspection Conformance Reliability Technology Cost reduction Efficiency Prevention Statistical measures Total quality control Zero defects Customer Complaint

Main Focus
Performance Statistical tools SPC Quality measure Customer surveys " satisfaction " expectation " perception Responsiveness Accessibility Employee training Empowerment Technology Service delivery Competence Communications

Main Focus
Customer Relations " Loyalty " Satisfaction " Service " Expectation " Perception " Needs " Information Added-value Service delivery Man. Commitment Quality Assurance Cont. Improvement Deployment (QFD)
Worker Motivation

Main Focus
Competition Policy Deployment (QFD) Benchmarking Man. Commitment Effectiveness Communication Cont. Improvement Customer Relations Satisfaction Expectation Innovation Responsiveness Long-term Profit Market Share

Product Orientation

Service Orientation

Customer Orientation

Market Orientation

Paradigm Shifts in Concepts and Practice of Management

Driver

Stages of Evolution

Sustainable Performance

Paradigm Shift Required (Orientation)

M P S C

Paradigm Shift Required (Measures)

Business Balanced Scorecard Approach -Stakeholder Perspective

NEED

-Why -What -How -Business Imperative -Competition - Survival

TQM

for

-Stage 1 (P) - Stage 2 (S) -Stage 3 (C) -Stage 4 (M)

Production Orientation Service Orientation Customer Orientation Market Orientation

Learning and Innovation

Culture of Continuous Improvement

TQM Maturity and Sustainable Performance Model (TQM-MSPM)

LESSONS
TQM is an all inclusive approach to improving competitiveness, effectiveness and flexibility of the entire organization through planning, organizing and comprehending each activity, with the involvement of each individual at every level

LESSONS
The methods and techniques used in TQM are applicable throughout any organization and are equally useful in every sector

LESSONS
TQM ensures that management adopts a strategic overview of quality that eliminates the separation of planning from execution, and focuses on problem-prevention instead of detection

LESSONS
Managing for quality should not be delegated and it is the responsibility of the senior executive leader to take charge of the commitment to a quality policy

LESSONS
An examination of all potential barriers to quality can help to achieve the correct mindset that maximizes the use of time and resources by doing things right-firsttime

LESSONS
The development of a culture for continuous improvement and communications is essential

LESSONS

Training and development is essential

LESSONS
Customer and Stakeholder focus is an imperative

LESSONS
Use of selfassessment techniques performance measurement and feed back are vital

Winning the award accelerated what we were doing in the organisation and contributed in a powerful way. We are no longer perfect, like we used to be. We are better than we were and getting even better. We found the Baldrige Award a very powerful reinforcement of the approach we started in the early 1980s.
John Fooks, Vice President Westinghouse Electric Corporation

For us, the Malcolm Baldrige Award was a great scavenger hunt - finding the right information. We went into it for self-improvement. Our CEO, Fred Smith, did not allow us to send it until four or five days before the deadline. It started a lot of self-analysis, but the selfimprovement is just beginning
Rosetta Riley, Customer Satisfaction Cadillac, Motor Car Division

Our reason for applying had nothing to do with winningYou are on this quality improvement journey and youre never quite sure where you are.The Malcolm Baldrige Award assessment process told us that our processes were right and that there is a light at the end of the tunnel. The winners understand the approaches to quality but for most part they do not subscribe to one particular philosophy. We tried Juran, Ishikawa, Crosby and Deming. None of them alone worked for us. Our success came when we turned to our people.
John West, Manager of Corporate Quality Improvement Federal Express Corporation