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CHAPTER 14
Building, and Sustaining Quality and Performance
Excellence
Teaching Notes
The keys to attaining an in-depth understanding of total quality organizations as integrated
systems are to have basic knowledge of organizing principles and organizational cultures and to
develop and use a sustainable model for performance excellence such as the Baldrige criteria as a
foundation for quality organization and continuous improvement. Building and sustaining a TQ
organization requires leadership as the driver for performance excellence, a readiness for change,
the adoption of sound practices and implementation strategies, and effective organization. An
understanding of basic integrative concepts and their importance is vital for managers and
Key objectives are:
• To learn that building and sustaining performance excellence requires effective
leadership, a commitment to change and long-term sustainability, 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. An important element of sustainability is ensuring future leadership;
thus the development of future leaders and a formal succession plan are vital.
• To understand the concept of sustainability – an organization’s ability to address current
needs and have the agility and management skills and structure to prepare successfully
for the future, including preparedness for emergencies.
Building, and Sustaining Quality and Performance Excellence 2
• 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,
• To learn about best practices – those that are recognized by the business community to
lead to successful performance. Some best practices are “universal” including cycle-time
analysis, process value analysis, process simplification, strategic planning, and formal
• To understand the multiple approaches to designing an effective organizational
infrastructure, overcoming barriers to successful implementation, and developing and
using self-assessment to determine the level of performance and best practices required at
various stages for building and sustaining quality efforts.
• To understand that change is difficult to accomplish, and organizations generally should
manage change as a three-stage process. The first stage involves questioning the
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.
• To learn that organizations encounter numerous barriers to successful implementation.
They need to recognize these barriers and avoid the common mistakes that stifle quality
• To understand that companies generally adopt a performance excellence approach to
react to competitive threats or take advantage of perceived opportunities. Successful
Building, and Sustaining Quality and Performance Excellence 3
Many organizations start with ISO 9000 because of its prescriptive nature and process
orientation and then evolve to a broader framework such as Baldrige.
• To learn that implementing Six Sigma can 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
• To understand the concept of self-assessment – the holistic evaluation of processes and
performance – that provides a starting point to build a quality organization by identifying
both strengths and opportunities for improvement, and creating a basis for evolving
• To appreciate that quality is a never-ending journey that must be built on knowledge
management, organization learning and adaptation to an ever-changing environment, and
ANSWERS TO QUALITY IN PRACTICE FEATURES
Corning’s Journey to Quality Excellence
1. Contrast Corning’s journey to the Quality in Practice case about Xerox in Chapter 1.
What similarities and differences do these organizations have?
Similarities and differences between Xerox’s and Corning’s quality environment and history are
interesting and informative. Xerox and Corning were, and are, high tech companies that rely on
product invention and innovation for their success. Initially, the total quality initiatives at both
companies were driven by strong senior leadership support, starting with the CEO. Also, Xerox
strove to “ensure that quality improvement would become the job of every Xerox person,” while
Corning vowed to use: “an ’attack on a broad front’ strategy, which is implicit in the phrase total
Building, and Sustaining Quality and Performance Excellence 4
1980’s and part of the 90’s. Xerox was even able to beat back Japanese competition for awhile,
when it threatened to sink the company. However, over time, the quality focus for both
companies was blurred by new management with new ideas for business solutions to problems.
Due to slippages in performance, Corning realized that it had a crisis that needed to be
addressed. In 2002 Corning’s board requested Jamie Houghton, the CEO who had first
2. What concepts and principles discussed in this chapter are reflected in this case? What
lessons can other organizations learn from this case?
There are numerous concepts and principles discussed in this chapter which are reflected in this
case. They include corporate culture, strategic change, process change, effective implementation
of initiatives such as Six Sigma, life cycles of quality initiatives, organizational learning, and
assessment.
Building, and Sustaining Quality and Performance Excellence 5
direction, and delivering and inspecting results is critical for success.
Integrating Quality Frameworks at Veridian Homes
1. What tools and approaches has Veridian used to integrate quality throughout the
organization?
Veridian uses various tools and approaches, such as the Baldrige Express surveys, to integrate
quality throughout the organization. The surveys give employees the opportunity to rate the
company on a Likert scale in each criterion and provide comments on strengths, weaknesses and
2. How have NHQA certification, the Baldrige process, and the Green Built certification
process contributed to efficiency and cost effectiveness for Veridian?
NHQA is a quality award process, similar to the Baldrige Award. In support of their efforts to
win that award, Veridian attained NAHBRC builder certification status for quality and safety
management systems. The certification, based on ISO 9000, is third-party audited and included
Veridian’s construction, sales and customer relations departments. Since earning certification,
Building, and Sustaining Quality and Performance Excellence 6
ANSWERS TO REVIEW QUESTIONS
1. What is culture? How are cultural values reflected in organizations?
Culture, or “corporate culture,” is the way an organization does things. The way of doing things
at a company is important for effective quality management and control since the processes of
2. Explain the difference between strategic change and process change.
Strategic change and process change are significantly different from each other, although process
change supports strategic change. Strategic change stems from strategic objectives, which are
generally externally focused and relate to significant customer, market, product/service, or
3. Describe questions that organizations must ask and steps they must take in change
management processes.
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?
Managing change usually requires a well-defined process, just like any other business
4. Discuss the role of middle management and the workforce in achieving quality and
performance excellence.
Middle managers are often called on to monitor progress; disseminate information and
suggestions between local and distant line, staff, and outside experts; and act as a spokesperson
inside and outside the firm. Technology development requires that managers constantly scan the
Building, and Sustaining Quality and Performance Excellence 7
environment to be aware of technological developments that may threaten or enhance the
operations of the company. Systems and process integration means optimizing the system to
meet strategic goals such as customer service, and using tools of quality measurement and
5. What lessons can be learned from Wainwright Industries about changing an
organization’s culture?
Wainwright made a radical change in corporate culture to deal with their crisis in the 1980’s.
Management realized that they were part of the problem, so they put all workers on salaries and
began to call them associates. Management and workers all began to wear the same uniform,
6. What are common barriers to change?
One reason for failure of quality initiatives is a lack of what Deming called “constancy of
purpose” in his original version of the 14 Points. The people who implement quality initiatives
often have conflicting goals and priorities and simply do not follow through with the initiative.
Another reason for failure is the lack of a holistic systems perspective. Many approaches to
Building, and Sustaining Quality and Performance Excellence 8
comprehensive effort that encompasses all of the elements discussed in this book thus far and
span across the three levels of quality—individual, process, and organization—that we have
7. Define the terms alignment and integration. Why are they important?
In the Baldrige criteria, alignment is defined as consistency of plans, processes, actions,
information, decisions, results, analysis, and learning to support key organization-wide goals.
Effective alignment requires common understand of purposes and goals and use of
complementary measures and information for planning, tracking, analysis, and improvement at
8. Why is it important to customize performance excellence approaches to each
organization?
A successful strategy needs to fit within the existing organization culture and capabilities, which
is the reason the Baldrige Award criteria are nonprescriptive. One study of Baldrige Award
recipients concluded that each has a unique “quality engine” that drives their culture and
organizational processes. The quality engine customizes the quality effort to the organizational
9. What are best practices? What are the major conclusions and implications of the Best
Practices report of Ernst & Young and the American Quality Foundation? How do they
relate to Deming’s philosophy?
The Best Practices study, by Ernst and Young, found that best practices depend on the current
level of performance of a company, and that trying to implement all the practices of world-class
organizations can actually waste time and money, not help. The study used two performance
Building, and Sustaining Quality and Performance Excellence 9
benefits from meticulously documenting gains and further refining practices to improve value
added per employee, time to market, and customer satisfaction. High performers — with ROA
and VAE exceeding seven percent $74,000 respectively — gain the most from using
self-managed teams and cross-functional teams that concentrate on horizontal processes such as
10. List the important principles for successfully implementing performance excellence
approaches.
Principles for effective implementation of Six Sigma also apply to implementing other types of
performance excellence initiatives.
• Committed leadership from top management. Managers at companies, such as GE
participate in hands-on approaches.
• Integration with existing initiatives, business strategy, and performance measurement.
This requires a clear justification in terms of an organization’s mission and strategic
direction.
Building, and Sustaining Quality and Performance Excellence 10
savings at the business unit level and share the savings with the Six Sigma team members.
11. Describe the typical life cycle of a quality initiative and the Baldrige “Roadmap.” Why
are they important for senior leaders to understand?
The typical life cycle of a quality initiative and the Baldrige “roadmap” includes the steps of:
1. Adoption: the implementation stage of a new quality initiative
2. Regeneration: when a new quality initiative is used in conjunction with an existing one to
generate new energy and impact.
12. Explain the notion of a learning organization. How does the Baldrige criteria provide a
framework for organizational learning?
Peter Senge defines a learning organization as “an organization that is continually expanding its
capacity to create its future. For such an organization, it is not enough merely to survive.
‘Survival learning,’ or what is most often termed ‘adaptive learning’ is important — indeed it is
necessary. But for a learning organization, ‘adaptive learning’ must be joined by ‘generative
learning,’ learning that enhances our capacity to create.”
Organizations cannot count on succeeding in the long run if they merely have committed
13. What is self-assessment? Why is it valuable? What issues should self-assessment
address?
Self-assessment is the holistic evaluation of processes and performance. The “self” part of the
term means that it should be conducted internally rather than simply relying on an external
Building, and Sustaining Quality and Performance Excellence 11
consultant. An organization should make a critical self-assessment of where it stands in relation
to its quality commitment. That can help it to identify strengths and areas for improvement and
determine what practices will yield the most benefit. At a minimum, a self-assessment should
address the following:
a. Management involvement and leadership. To what extent are all levels of management
involved?
b. Product and process design. Do products meet customer needs? Are products designed for
easy manufacturability?
c. Product control. Is a strong product control system in place that concentrates on defect
prevention, before the fact, rather than defect removal after the product is made?
14. Why is follow-up important as a part of self-assessment processes? What two key
activities should comprise follow-up? What advice should managers heed to leverage self–
assessment?
Following up in self-assessment activities requires senior leaders to engage in two types of
activities: action planning and subsequently tracking implementation progress. To leverage self-
assessment findings, managers must do four things:
a. Prepare to be humbled. “Humbling” is a word we often hear from managers who have
recently digested assessment findings.