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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 workers at every level in an organization which is focused on performance
excellence. Integrated systems have become more important in organizations that aspire to high
quality levels, and organizational leaders must understand how to "deploy" plans and quality
efforts throughout the organization.
This chapter focuses on the corporate culture, and integration of concepts developed throughout
the text. This organizing focus is one that students may find easier to grasp than the cost of
quality or even planning for quality. However, you should point out that the "safe" concept of
organizations is rapidly changing, as organizations and individuals are shaken out of their
complacency by events that surround them today. The strict hierarchy of the conventional
organizational "pyramid" is giving way to a "matrix" or “process” focused organization, self-
managed teams, massive part-time employment, and economic and technological dislocations.
Numerous attempts to align the corporate culture with the total quality management, global
marketplace, and "lean and mean" concepts, not all of which have been resounding successes,
have brought us into the 21st Century. Key objectives are:
• To emphasize that building and sustaining performance excellence requires effective
leadership, a commitment to change and long-term sustainability, the adoption of sound
Building, and Sustaining Quality and Performance Excellence 2
• To define sustainability as 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.
• To suggest that 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
• To stress the idea that best practices are 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
• To emphasize that all employees play a role in TQ implementation from senior manager,
who lead and provide resources, to middle managers who act as change agents and assure
Building, and Sustaining Quality and Performance Excellence 3
• To realize that change is difficult to accomplish, and organizations generally should
manage change as a three-stage process. The first stage involves questioning the
• To learn that 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
• To understand that companies generally adopt a performance excellence approach to
react to competitive threats or take advantage of perceived opportunities. 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
• To define and apply best practices, which are simply those that are recognized by the
business community to lead to successful performance. They often include the
“universal” practices of cycle-time analysis, process value analysis, process
simplification, strategic planning, and formal supplier certification programs. Low
• 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
Building, and Sustaining Quality and Performance Excellence 4
Baldrige criteria provide the most comprehensive instrument for self-assessment of
organizational quality and management practices.
• To raise awareness of the fact that quality is a never-ending journey that must be built on
knowledge management, organization learning and adaptation to an ever-changing
Merging Divergent Quality Systems at Honeywell
1. Allied Signal was one of the pioneers of Six Sigma quality, which they borrowed from
Motorola. Honeywell developed their own quality management approach, called
2. Top management, in the person of CEO Bonsignore has expressed public commitment to
Six Sigma Plus as the approach that will “…drive growth and productivity by energizing
all of Honeywell International’s 120,000 employees …” Other top managers, such as Mr.
Integrating Quality Frameworks at Veridian Homes
Key Issues for Discussion
1. Veridien 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 OFIs. A report provides a detailed analysis for management
Building, and Sustaining Quality and Performance Excellence 5
to conduct annual measuring and monitoring and to identify and prioritize weaknesses.
Strategic goals are linked to each employee via the performance planning and
development (PPD) process. This helps an employee understand his or her role, priorities,
2. 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, the land development, purchasing, estimating
and design departments have been incorporated into the certification. The company uses
ANSWERS TO REVIEW QUESTIONS
1. 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 production generally have the greatest effect on quality output. Studies show
that change is easier in corporate cultures that emphasize customer satisfaction and
continuous improvement; in other words those that embrace performance excellence.
Cultural values are often seen in the mission and vision statements of organizations.
Building, and Sustaining Quality and Performance Excellence 6
2. 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,
3. 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
process. Thinking of change management as a process helps to define the steps necessary
4. 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 environment to be aware of technological developments
Building, and Sustaining Quality and Performance Excellence 7
5. 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
6. 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.
7. In the Baldrige criteria, alignment is defined as consistency of plans, processes, actions,
information, decisions, results, analysis, and learning to support key organization-wide
Building, and Sustaining Quality and Performance Excellence 8
8. 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
9. 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 measures: ROA (return on assets: after tax income divided by total
10. Principles for effective implementation of Six Sigma also apply to implementing other
types of quality initiatives.
• Committed leadership from top management. Managers at companies, such as GE
participate in hands-on approaches.
Building, and Sustaining Quality and Performance Excellence 9
• Integration with existing initiatives, business strategy, and performance measurement.
This requires a clear justification in terms of an organization’s mission and strategic
direction.
• Process thinking. A process focus is, a prerequisite. Mapping business processes is one of
the key activities in Six Sigma efforts, as is a disciplined approach to the information
11. The typical life cycle of a quality initiative 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. 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
Building, and Sustaining Quality and Performance Excellence 10
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."
13. 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 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?
Building, and Sustaining Quality and Performance Excellence 11
14. 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
15. Small organizations and nonprofits have generally been slow to adopt quality initiatives
because of a lack of understanding and knowledge of what needs to be done and how to
16. To establish a TQ focus, the three core principles of TQ must be emphasized in any
business or non-profit organization. A focus on customers is clearly vital to small
enterprises. Most small businesses live or die from their customer relationship practices,
Building, and Sustaining Quality and Performance Excellence 12
ANSWERS TO DISCUSSION QUESTIONS
1. To create a culture for quality and performance, an organization’s senior leaders should
set directions and create a customer focus, clear and visible values, and high expectations.
The directions, values, and expectations should balance the needs of all stakeholders.
Leaders should ensure the creation of strategies, systems, and methods for achieving
2. A dysfunctional corporate culture is one in which shared values and behavior are at odds
with the organization's long-term health. If the quality of a company's product or service
3. The first question an organization must ask is “Why change?” Most firms—even
Baldrige Award recipients—have changed their cultures because of threats to their
survival. When faced with a threat to survival, an organization implements change more
5. The Baldrige framework definitely promotes alignment and integration. The terms
