Managing for Quality and Performance Excellence, 9 th Edition

Summary of Key Points and Terminology

Chapter 14 – Building and Sustaining Quality and Performance

Excellence

● Building and sustaining performance excellence requires effective leadership, a

commitment to change and long-term sustainability (the ability to address current
needs and have the agility and management skills and structure to prepare
successfully for the future), 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.
● For quality and performance excellence to truly succeed in an organization, it
must define and drive the culture of the organization. Culture (specifically,
corporate culture) is an organization’s value system and its collection of guiding
principles.
● It is important to differentiate between organizational changes resulting from
strategy development and implementation (i.e., “strategic change”), and
organizational changes resulting from operational assessment activities (i.e.,
“process 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. An organization
must change these aspects to remain or become competitive. In contrast, process
change deals with the operations of an organization. Strategic changes are the
ones that impact culture the most rapidly. However, an accumulation of
continuously improving process changes can also lead to a positive and
sustainable culture change.
● Change is difficult to accomplish, and organizations generally should manage
change as a three-stage process. The first stage involves questioning the

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 organization’s current state and dislodging accepted patterns of behavior. The
second stage is a state of flux, where new approaches are developed to replace
suspended old activities. The final stage consists of institutionalizing the new
behaviors and attitudes.
● Organizations encounter numerous barriers to successful implementation. They
need to recognize these barriers and avoid the common mistakes that stifle quality
efforts, particularly the lack of alignment and integration between components of
the organizational system. Alignment is the consistency of plans, processes,
actions, information, decisions, results, analysis, and learning to support key
organization-wide goals. Integration refers to the harmonization of plans,
processes, information, resource decisions, actions, results, and analyses to
support key organization-wide goals.
● Companies adopt a performance excellence approach to react to competitive
threats or take advantage of perceived opportunities. In most cases, threats have
provided the incentive to act and change the company’s culture. Successful
adoption requires a readiness for change, sound practices and implementation
strategies, and an effective organization in which all employees are engaged.
● Organizations can take many routes to performance excellence, but none of them
represents the “one best way.” Whatever approach or combination of approaches
an organization uses should make the most sense—and work—in the
organization. Many organizations start with ISO 9000 because of its prescriptive
nature and process orientation and then evolve to a broader framework such as
Baldrige.
● Best practices are simply those that are recognized by the business community to
lead to successful performance. Five best practices are “universal” – that is, they
can improve any organization. These include cycle-time analysis, process value
analysis, process simplification, strategic planning, and formal supplier
certification programs. Other practices depend on a company’s level of
performance. 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.

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 ● Lessons learned in implementing Six Sigma provide key insights that can apply to
implementing any type of quality and performance excellence initiative. Effective
implementation of Six Sigma depends on some key principles: Committed
leadership from top management. Integration with existing initiatives, business
strategy, and performance measurement. Process thinking. Disciplined customer
and market intelligence gathering. A bottom-line orientation. Leadership in the
trenches. Training. Continuous reinforcement and rewards.
● Performance excellence must be viewed as a never-ending journey.
Implementation takes time as well as effort, and organizations must not regard
quality approaches as a quick fix. As such, organizations must continue to learn
and adapt to changing environments. Organizational learning is a key aspect of
building high-performing organizations. Learning organizations have to become
good at performing five activities, including systematic problem solving,
experimentation with new approaches, learning from their own experiences and
history, learning from the experiences and best practices of others, and
transferring knowledge quickly and efficiently throughout the organization.
● The Baldrige journey can be described from a life-cycle perspective. At Stage 0,
organizations opt to wait for mandates and regulations, and they implement
change when required to maintain compliance. In Stage 1, organizations commit
to a proactive approach to improvement. When senior leaders became personally
and actively engaged with the criteria and feedback, they begin to experience
traction on their organizational transformation strategies (Stage 2). As
organizations become more skillful at these approaches, integration (Stage 3)
begins to occur. Finally, the Sustaining stage (Stage 4) can result in two outcomes:
continued improvement or decline as organizations lose focus or become
distracted.
● Sustainability requires continual learning. Learning organizations have to
become good at performing five main activities, including systematic problem
solving, experimentation with new approaches, learning from their own
experiences and history, learning from the experiences and best practices of

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 others, and transferring knowledge quickly and efficiently throughout the
organization.
● Self-assessment – the holistic evaluation of processes and performance –
provides a starting point to build a quality organization. Self-assessment should
identify both strengths and opportunities for improvement, creating a basis for
evolving toward higher levels of performance. Thus, a major objective of most
self-assessment projects is the improvement of organizational processes based on
opportunities identified by the evaluation. The Baldrige criteria provide the most
comprehensive instrument for self-assessment of organizational quality and
management practices.
● Self-assessment naturally requires follow-up activities, specifically action
planning and tracking implementation progress. Managers must prepare
themselves for unpleasant findings and be able to take action to improve them.
This requires serious discussion, understanding of institutional influences, and
“grinding out” the follow-up activities.
● Small organizations and nonprofits have generally been slow to adopt quality
initiatives. In most cases, this lag is a result of a lack of understanding and
knowledge of what needs to be done and how to do it, because managers are
wrapped up in entrepreneurial activities that typically focus on sales strategies and
market growth, day-to-day cash flow problems, and routine fire fighting.
● What the future will hold is never predictable. We face a serious challenge in
sustaining the principles of quality amidst the continuing emergence of short-lived
management fads, changing leadership driven by pressures of the stock market, e-
commerce, and a myriad of other factors.

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