Introduction to Quality

and Performance
Excellence

S
 Outline

 Explain the concepts of quality and performance excellence

 Provide reasons why they are important

 Provide a brief history of the “quality revolution”

 Describe quality in manufacturing, service, health care,

education, and government

 Explain the principles and practices of quality and performance

excellence

 Discuss relationships of quality with organizational models in

management theory
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 Defining Quality

1. Efficiently providing products and services that meet or

exceed customer expectations
2. Adding customer value
3. Continuously measuring the improvement of processes
and services for customers
4. Acting as promised and reporting failures
5. Doing the right thing at the right time in the right way
with the right people
6. Ensuring customers come back and products do not

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 Defining Quality

7. Providing the best value to customers by improving

everyday activities and processes
8. Beyond delivering what the customer wants, anticipating
what the customer will want when he or she knows the
possibilities
9. Delivering customer value across the organization through
best-in-class products, services, and support
10. Meeting and exceeding the expectations of clients,
employees, and relevant constituencies in the community.

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 Formal Definitions of Quality

 The totality of features and characteristics of

a product or service that bears on its ability
to satisfy given needs -American Society for Quality
 Fitness for use
 Meeting or exceeding customer
expectations
 Conformance to specifications
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Product specification

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 Performance Excellence

 An integrated approach to organizational

performance management that results in
 delivery of ever-improving value to
customers and stakeholders, contributing
to organizational sustainability,
 improvement of overall organizational
effectiveness and capabilities, and
 organizational and personal learning.
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 Importance of Quality

 THE buzzword among business in the 1980s and

1990s
 Quality problems still abound in many industries,
such as automotive
 Consumer expectations are high

 “We’ve made dependence on the quality of our

technology a part of life” – Joseph Juran
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 History of Quality Assurance

 Quality assurance in Ancient China

 Skilled craftsmanship during Middle Ages

 Industrial Revolution: rise of inspection and

separate quality departments
 Early 20th Century: statistical methods at Bell System

 Quality control during World War II

 Post-war Japan: evolution of quality management

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 History of Quality Assurance

 Quality awareness in U.S. manufacturing

industry during 1980s: from “Little Q” to “Big Q”
- Total Quality Management
 Malcolm Baldrige National Quality Award (1987)

 Cynicism and criticism among some business

executives

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 History of Quality Assurance

 Emergence of quality management in

service industries, government, health care,
education, and non-profits
 Evolution of Six Sigma

 Current and future challenge: maintain

commitment to performance excellence
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 Future Influences

 Global responsibility  Workforce of the

future
 Consumer awareness
 Aging population
 Globalization
 21st century quality
 Increasing rate of
change  Innovation

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 GROUP ACTIVITY
2-3 people
(15 minutes)

 THINK OF A FAMOUS ORGANIZATION AND DO A

SEARCH ON IF IT RECEIVES A SPECIFIC QUALITY
MANAGEMENT RELATED AWARD.

 WHAT SPECIFIC AWARD DOES THAT ORGANIZATION

RECEIVED AND WHO PROVIDED IT?

 WHAT DO YOU THINK IS THE IMPORTANCE AND

EFFECTS OF SUCH QUALITY MANAGEMENT AWARD
IN THE SELECTED ORGANIZATION?

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 Quality in Manufacturing

 Performance – primary operating characteristics

 Features –“bells and whistles”

 Reliability – probability of operating for specific time and conditions

of use

 Conformance – degree to which characteristics match standards

 Durability – amount of use before deterioration or replacement

 Serviceability – speed, courtesy, and competence of repair

 Aesthetics – look, feel, sound, taste, smell

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 Quality in Services

 Time – how much time must a customer wait?

 Timeliness – will a service be performed when promised?

 Completeness – Are all items in the order included?

 Courtesy – do frontline employees greet each customer cheerfully?

 Consistency – are services delivered in the same fashion for every

customer, and every time for the same customer?

 Accessibility and convenience – is the service easy to obtain?

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 Differences Between Manufacturing and
Services

 Customer needs and performance standards are often

difficult to identify and measure
 The production of services typically requires a higher
degree of customization
 The output of many service systems is intangible

 Services are produced and consumed simultaneously

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 Differences Between Manufacturing and
Services

 Customers often are involved in the service process and

present while it is being performed
 Services are generally labor intensive

 Many service organizations must handle very large

numbers of customer transactions.

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 New Frontiers of Quality

 Health care

 Education

 Government

 Not-for-Profits

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 Principles, Practices, and Techniques

 Principles are the foundation of the philosophy

 Practices are activities by which the principles

are implemented
 Techniques are tools and approaches that help
managers and employees make the practices
effective

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 Quality Management Principles

 Customer focus  Continual

Improvement
 Leadership
 Factual Approach to
 Involvement of Decision Making
People
 Mutually Beneficial
 Process Approach Supplier
 System Approach to Relationships
Management

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 1. Customer Focus

 Customer is the principal judge of quality

 Organizations
must build relationships with
customers and increase customer engagement
 Organizationsmust understand customer
needs and obtain feedback
 Customers are internal and external

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 Customer-Focused Practices

 Researching and understanding customer needs and expectations;

 Ensuring that goods and services are linked to customer needs and
expectations;

 Communicating customer needs and expectations throughout the

organization;

 Measuring customer satisfaction and using the results to improve;

 Systematically managing customer relationships; and

 Ensuring a balanced approach between satisfying customers and other

stakeholders
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 2. Leadership

 Leadership is the responsibility of top

management
 Senior leaders should be role models for the
entire organization
 An organization cannot sustain quality
initiatives without strong leadership

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 Leadership Practices

 Considering the needs of all stakeholders in decisions;

 Establishing a clear vision of the organization’ s future;

 Setting challenging goals and targets;

 Creating and sustaining shared values, fairness, and ethics at all levels
of the organization;
 Establishing trust and eliminating fear;

 Providing workers with adequate resources, training and freedom to

make customer-focused decisions; and
 Inspiring, encouraging, and recognizing worker’ s contributions.
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 3. Involvement of People

 A company’ s success depends increasingly on the knowledge,

skills, and motivation of its workforce.

 Engagement – workers have a strong emotional bond to their

organization, are actively involved in and committed to their
work, feel that their jobs are important, know that their
opinions and ideas have value, and often go beyond their
immediate responsibilities for the good of the organization
 Empowerment – having the authority to make decisions
 “A sincere belief and trust in people”

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 People-Focused Practices

 Understand the key factors that drive workforce engagement, satisfaction, and
motivation

 Design and manage work and jobs to promote engagement

 Create an environment that ensures and improves workplace health, safety, and security

 Develop an effective performance management system

 Assess workforce engagement and satisfaction

 Assess workforce capability and capacity needs

 Make appropriate investments in development and learning

 Manage career progression and succession planning

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 4. Teamwork

 Vertical—teamwork between top management

and lower-level employees.
 Horizontal—teamwork within work groups and
across functional lines (often called cross-
functional teams).
 Interorganizational—partnerships with suppliers
and customers
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 5. Process Approach

 A process is a sequence of activities that is

intended to achieve some result

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Cross-functional Perspective

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 Process-Focused Practices

 Systematically defining processes that create desired outcomes; establishing clear

responsibility and accountability for managing key processes;

 Analyzing and measuring of the capability of processes;

 Identifying the interfaces of key activities within and between the functions of the
organization;

 Focusing on the factors such as resources, methods, and materials that will improve
processes; and

 Evaluating risks, consequences and impacts of activities on customers, suppliers, and

other stakeholders.
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6. Systems Approach to Management

 Synthesis means looking at an organization as a whole and

building on key business attributes, including core
competencies, strategic objectives, action plans, and work
systems.

 Alignment means ensuring consistency of plans, processes,

measures, and actions across the organization.

 Integration builds on alignment, so that the individual

components of the organizational system operate in a fully
interconnected manner and deliver anticipated results.
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 Systems Approach Practices

 Designing the organization to achieve its objectives in the most effective

and efficient way;

 Understanding the interdependencies between processes;

 Developing approaches that harmonize and integrate processes;

 Providing a clear understanding of the roles and responsibilities

necessary for achieving objectives and reducing cross-functional barriers;

 Understanding organizational capabilities; defining how specific

activities and processes should operate; and

 Continually improving the system through measurement and evaluation.

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 7. Continual Improvement

 Incremental and breakthrough improvement

 enhancing value to the customer through new and
improved products and services;
 improving productivity and operational performance
through better work processes and reductions in errors,
defects, and waste;
 improving flexibility, responsiveness, and cycle time
performance; and
 improving organizational management processes through
learning

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 Learning

 Learning – why changes are successful through

feedback between practices and results
 Learning Cycle:

1. Planning
2. Execution of plans

3. Assessment of progress

4. Revision of plans based upon assessment findings

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 Practices for Continual
Improvement

 Deploying a systematic approach to continual improvement across

the organization;

 Providing the workforce with training in the methods and tools of

continual improvement;

 Making continual improvement of products, processes, and

systems an objective for every individual;

 Establishing goals to guide, and measures to track, continual

improvement; and

 Recognizing and acknowledging improvements.

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 Factual Approach to
Decision Making

 Organizations need good performance measures to drive strategies

and change, manage resources, and continuously improve

 Data and information support analysis at all levels

 Typical measures:
 product and process outcomes,
 customer-focused outcomes,
 workforce-focused outcomes,
 leadership and governance outcomes, and
 financial and market outcomes.

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 Data-Driven Practices

 Ensuring that data and information are sufficiently

accurate and reliable;
 Making data accessible to those who need it;

 Analyzing data and information using valid methods;

and
 Making decisions and taking action based on factual
analysis, balanced with experience and intuition.

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 8. Mutually Beneficial Supplier
Relationships
 Suppliers include not only companies that provide materials
and components, but also distributors, transportation
companies, and information, health care, and education
providers.

 Key suppliers might provide unique design, technology,

integration, or marketing capabilities that are not available
within the business and, therefore, can be critical to achieving
such strategic objectives as lower costs, faster time-to-market,
and improved quality.

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 Supplier Management
Practices
 Recognizing the strategic importance of suppliers in
accomplishing business objectives, particularly
minimizing the total cost of ownership;
 Identifying and selecting key suppliers; developing win–
win relationships that balance short-term gains with long-
term considerations;
 Establishing trust through openness and honesty, thus
leading to mutual advantages;

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 Supplier Management
Practices

 Pooling expertise and resources with partners;

 Having clear and open communication that

information and future plans;
 Establishing joint development and improvement
activities; and inspiring, encouraging,
 Recognizing improvements and achievements of
suppliers.
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 TQ and Agency Theory

 Agency relationship: a concept in which one

party (the principal) engages another party (the
agent) to perform work
 Key assumption: individuals in agency
relationships are utility maximizers and will
always take actions to enhance their self-
interests.

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 Contrast With TQ

 TQ views the management system as one based on social

and human values, whereas agency theory is based on an
economic perspective that removes people from the
equation.

 Agency theory propounds the belief that people are self-

interested and opportunistic and that their rights are
conditional and proportional to the value they add to the
organization. TQ suggests that people are also motivated
by interests other than self, and that people have an innate
right to be respected.
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 Contrast With TQ

 Agency theory assumes an inherent conflict of goals between agents

and principals, and that agent goals are aligned with principal goals
through formal contracts. In TQ, everyone in the organization shares
common goals and a continuous improvement philosophy, and goals
are aligned through adoption of TQ practices and culture.

 TQ takes a long-term perspective based on continuous

improvement, whereas agency theory focuses on short-term
achievement of the contract between the principal and agent.

 TQ leaders provide a quality vision and play a strategic role in the

organization; leaders in agency theory develop control mechanisms
and engage in monitoring.
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TQ and Organizational Models

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