Quality Management Multiple Choice

8/13/2019 Quality Management Multiple Choice

1/21QUALITY PROGRESS I JULY 2003 I 25

ow would you answer this question?How would your colleagues?After Quality Progress issue on Six Sigma

was published in January, our online discussion board started getting lots of messages, some com-plaining about Six Sigma hype or the lack of nega-

tive coverage of it.QPs editor, Debbie Phillips-Donaldson, chal-lenged several of the message writers to send hersomething we could publishan article or letter tothe editor. One, quality assurance engineer StevePrevette, said he would like to write about the sys-tem he likes bestDeming or systems thinkingand suggested we get others to write about theirfavorite methodologies.

At about the same time, Sharron Manassa, one of the librarians in ASQs Quality Information Center,told us she had received about 30 requests during

January along the lines of: Help. My company has just charged me with starting a quality program.Where do I start?

Prevettes idea was starting to look more andmore like a way to meet several customer needs.Phillips-Donaldson and other QP editorial staff members contacted several quality practitioners,concentrating on those actually out in the trenches,using quality tools and methods on a daily basis.The following seven articles are certainly notexhaustive but include discussion of most popularmethodologies available. The methods run the

gamut from what could be considered basic (ISO9000) to the more complex (Baldrige). Some advo-

cate a single methodology, others a combination of two or more.It becomes obvious there is no one correct

answer to the multiple-choice question that startedthis article. The key is to use the methodology orcombination that makes the most senseandworksfor your organization.

If your favorite quality methodology isntincluded, send a short article or even shorter letterto the editor telling us about it. Our readers, partic-ularly those new to quality or charged with start-ing a quality program from scratch, are eager to

hear what you have to say. Please write [email protected].

H

o ISO 9000.

o Quality Operating System.

o Lean.

o Six Sigma.

o A combination of lean and Six Sigma.

o Deming/systems thinking.

o Complexity theory.

o Baldrige.

o All of the above.

o Something different.

Multiple ChoiceQUALITY MANAGEMENT

Whats the best quality system?


2/21

ISO 9000 MakesIntegrated SystemsUser Friendlyby David Shipley

The revised ISO 9000:2000 standard makes sev-eral provisions for organizations either to developand implement a new quality management system

or change and improve an existing one.Organizations need to develop and implementmanagement systems based on processes or activi-ties that systematically help personnel understandwhat is essential to consistently achieve continualimprovement. But it is evident managers and qual-ity practitioners are not taking advantage of thechange a user friendly standard such as ISO 9000has the capacity to create.

When different management systemshealthand safety (as in BSI 18000), environmental (ISO14000) or quality (ISO 9000)are analyzed from a

generic perspective, similarities become apparent.All management systems consist of five rudimenta-ry components: infrastructure (environment), sys-tem/operation, input, process and output (seeFigure 1). The components are interrelated andinfluence the implementation, integration andimprovement of the system.

ImplementationThe 19th century Russian scientist and mathe-

matician Pafnuty Chebyshev said a failure to planis a plan to fail. Several factors influence the suc-

cessful implementation or revision of a manage-ment system.

Before implementation, it is critical an in-depthanalysis of the business or organization be conduct-ed to accurately define the products and services

being provided. Performance and gap analysis of the existing system will also provide insights onorganizational hierarchy and the influence structurehas on the processes and activities of the business.

Corporate or organizational culture and man-agement styles can affect final output. Too oftenprogress is hindered when the sentiment of man-agement or leadership is, No one is going to tellme how to run (or is that ruin?) my business.

From the perspective of a management systemuser, ISO 9000 standards provide a foundation for

businesses and organizations to achieve sustain-able improvement by acknowledging the value of personal input. Encouraging employees at all lev-els and functions to participate in the implementa-tion or transitional phase of development anddocumentation of the system accelerates the own-ership of activities and personal accountabilitythroughout the implementation process.

IntegrationSo, just exactly what is an organization trying to

accomplish through the documentation and inte-gration of management systems?

Samuel Johnson, the 18th century English writerand lexicographer, said, The next best thing toknowing something is knowing where to find it.This quote has relevancy to management systems.But a review of management system documenta-tion sometimes leaves an impression that individu-

als must have competency inhieroglyphics to understand it.

Although audit evidence may indicatea quality, environmental or health andsafety system is conformant to a specifiedstandard, management and employeeshave a tendency to dissociate themselvesfrom system ownership and responsibili-ty by uttering that ever so familiar state-ment of No one is going to tell me whatto do! Besides, it is the system coordina-tors job to take care of all of that ISO

9000 stuff.Plainly and simply put, the solution is

26 I JULY 2003 I www.asq.org

Infrastructure (environment)

System/operation

Input Process Output

Management System ComponentsFIGURE 1

o

QUALITY MANAGEMENT



not to obfuscate (to make so confusedor opaque as to be difficult to perceiveor understand 1) the system. If a coop-erative decision is made to integratethe various management systems, allthe information having a direct effecton employees in a managed activitiesor process system needs to be readilyavailable, relevant and understoodarequirement of the ISO 9000 standards.

System ownership is cultivatedthroughout all levels of a businesswhen it is the responsibility of em-ployees to define the processes andactivities various systems are com-prised of.

Those selected or who volunteer toassist in the integration of proceduresmay find it constructive to prioritize orrank the importance of procedures rel-ative to overall system effectivenessand then record progress based onreview and completion or approval of the documentation. Common or simi-lar management system proceduresthat may be integrated are shown inTable 1.

ImprovementQuality professionals can certainly

relate to the familiar pledge of theMetro Para aviators: We, the unwill-ing, led by the unknowing, are doingthe impossible for the ungrateful. Wehave done so much for so long, withso little, we are now qualified to doanything with nothing.

System implementation and integra-tion have a direct effect on improve-ment. But the differences in agendas and objectivesof employees and management are common deter-rents to achieving continual improvement. Unlesseveryone is reading from the same page or follow-ing the same instructions, it is difficult to attainprocess consistency and system improvement.

Systematic improvement is facilitated by ISO9000, which places an emphasis on planning and

measurement, customer focus and process owner-ship, responsibility and accountabilitywith

everyone in agreement on what needs to beaccomplished:

Planned and measured improvement. Resilientchange is the capability of adapting to or recover-ing from differing circumstances. Planning andmeasurement are critical to keep anticipatedchange from being perceived as preventive plan-

ning. Monitoring and recording the extent of tran-sition experienced within a designated area assure

Procedure (general) Priority Reviewed Completed

Record control

Document control

Internal audits

Management review

Corrective action

Preventive action

Monitoring and measurement of processInstrument calibration

Data backup

Integrated Quality and Health and SafetyManagement System Procedures

TABLE 1

Procedure (management) Priority Reviewed Completed

Management of change

Training (per regulations and standards)

Resources (work environment andinfrastructure)

Analysis of data

Internal and external communications and

promoting stakeholder requirements(including stakeholder complaints)

Establishing policies and objectives

Goal setting

Developing business strategy and annualoperating plan

Management system structure

Assignment of responsibility and authority

Management system performance

Assessing need for continual improvement

Identification of stakeholder requirements

Purchasing


4/2128 I JULY 2003 I www.asq.org

change will be resilient. Planning and measure-ment are integral to ISO 9000.

Improved customer focus. There is a tendencyto confuse customer wants and needs with cus-tomer expectations and specifications. Developinga concise definition and statement of external andinternal customer expectations and specifications,as required by ISO 9000, contributes to clarifyingwhat the customer focus of a business consists of.Processes or activities are consistently utilized toassure external and internal customers receive theproduct or service required.

Once the organization determines the internaland external customer requirements and how spec-ifications are to be met, fostering and maintainingopen communications are critical to continualimprovement of the management system.

Improved process ownership, responsibilityand accountability. Further improvements areactualized when an ISO 9000 environment is creat-ed in which employees are aware they are respon-sible and accountable for the various businessprocesses and activities. This approach encouragesownership of the management system.

The ACID test is a decisive tool to partiallyassess development and improvement of a man-agement system. Never heard of it? It is importantto do the following during integration and mainte-nance of a management system:

Avoid duplication of system documentationand efforts.

Have cohesive systems that are logical andeasily comprehended by system users.

Make sure integrated system differences aretransparent or seamless to the user.

Have dynamic systems characterized by activi-ty, progress and transition.

Is ISO 9000 for WIMPS?Fail? Maintain? Succeed? When given the

options, most businesses and industries strive forsuccess. The approach Ive described here, calledworthwhile improvements made practical system-atically (WIMPS), produces tangible and measur-able management system results. Possibly ISO 9000is for WIMPS after all.R E F E R E N C E

1. The American Heritage Dictionary of the English Language,third edition, Houghton Mifflin Co., 1992.

DAVID SHIPLEY is a quality systems coordinator forNucor: Vulcraft Group-Norfolk Division, Norfolk, NE. Heis a doctoral student in the community resource develop-ment program at the University of Nebraska-Lincoln.Shipley is an ASQ member and a Registrar AccreditationBoard quality and environmental management systemslead auditor.

QOSA SimpleMethod for BigOr Smallby Carl W. Keller

I have been involved in several types andaspects of quality management over the last 15years and have seen just about every kind of quali-ty management system (QMS). There are manyquality initiatives floating around, and a lot of hype surrounds some of them. Some initiatives

border on being fads and gimmicks, while somehave a bit more impact.

So, which one would I choose if I had free reinand wanted to get the most for my money? The

biggest bang for the buck I have had the pleasureof implementing is Ford Motor Co.s quality oper-ating system (QOS). QOS was developed by Fordin 1986 and was added as a requirement of its Q1supplier registration in 1988.

While Ford suppliers are subject to a QOSassessment, which involves several criteria includ-ing communication, teamwork, measurables andcontinuous improvement, QOS is just as easilyadapted to an organization that is not an automo-tive supplier and not subject to QOS, Q1 or QS-9000 or TS 16949 (the automotive derivatives of theISO 9000 quality management standard). In fact,outside Ford, the QOS initiative is known as a busi-ness operating system (BOS).

The QOS/BOS operating philosophy includes astructured team approach, use of standard tools fordata collection, a structured reporting format and aclosed loop continuous improvement cycle. Keenobservers will notice its striking similarity to the 14

QUALITY MANAGEMENT

o



principles of W. Edwards Deming (see Demings14 Principles, p. 30).

Why do I like the QOS/BOS methodology? Its because of its simplicity. While it is an initiative based on team effort, you dont need to be a hugecompany with a staff of 10 statisticians to imple-ment and use it. The coffee shop down the streetcan get a return from it just as easily as a largemanufacturing plant can.

Anyone can track average delivery time, partsper million defective or percentage of returns fromcustomers. Forming a team to track and improvecustomer satisfaction in these or other importantareas is neither overly time consuming nor costprohibitive.

Customer Satisfaction FocusISO 9001 requires a hefty investment to prove

evidence of continuous improvement, and somepeople are paying $70 grand or more for a SixSigma belt, but QOS/BOS has provided a QMS in a basic, no-frills format that can be understood by all.

Therein lies its power. Everyone can understandit, and all employees are therefore more apt toactually use it. There is no need for wild claims of return on investment or fudging of document revi-sions every six months because the ISO 9001 regis-trar is due. There are also no martial artsjust basic customer satisfaction as the focus.

The concept is simple. It goes something like this:1. Identify customer expectations.2. Identify the key processes that affect these

expectations.3. Select your measurables based on what is criti-

cal to the customers.4. Track the trends of the measurables.5. Predict the downstream performance.These tasks are all positioned on a closed loop,

continuous improvement wheel. The hub of thewheelconstant employee awarenessis probably the most critical part. If there is one single fail-ure of top management that causes organizationsnot to reap the benefits of any QMS, it has to be aconsistent lack of awareness of the importance of meeting customer expectations.

QOS/BOS expects awareness will be elevated atall levels within the company. While it is suggested

the team chairperson should be a member of man-agement, the champions of each measurable

should include employees from throughout theorganization. This leads to credibility throughoutthe various levels.

The year 2000 revision of ISO 9001 makes anattempt at this credibility by requiring qualityobjectives to be established, but it usually fallsshort of full employee awareness of the completeprocess and does not require input from all levels.

Regardless of the type of product or service, thesize of the company or the management structure,several key customer expectations are common.Customers want the highest quality product, at thelowest cost, delivered on time.

Key ProcessesAfter establishing the customer expectations,

QOS calls for key processes to be determined. Theseare the processes most likely to affect the customerexpectations either positively or negatively.

The processes will need to have values attachedfor purposes of measurement. The critical values become the measurables. Measurables can beprocess or result focused, but you should avoidpicking too many measurables. If too many arechosen, there will be a tendency to focus less on themore important ones, emphasizing the measur-ables with which people are most comfortable.

Each metric is tracked over time (usually month-ly) and displayed in some fashion that allows allemployees to see how they are doinggood or bad.When negative trends are experienced, employeesanalyze why the trend occurred and what thedownstream performance impact will be in thefuture. Tools used during the process include trendcharts for each measurable, Pareto or pie charts,and data over time tools, such as a Paynter chart.

Employee InvolvementUnlike what happens with many other initia-

tives, if you hang up basic charts showing a base-line and monthly progress, employees actually willtake it upon themselves to see how they are doing.You may be surprised at the level of involvementand the ingenuity employees use to correct nega-tive trends or keep positive trends going. The keyis to improve processes, customer satisfaction and,ultimately, business results.

Do the other QMS methodologies have merit?Sure they do, but lets face itmany companies are



just not going to use them. As much as we wantupper management to show enthusiasm for qualityprograms, executives often fall short of givingthose programs full support.

Upper management may send employees to Six

Sigma High or hang an ISO 9001 certificate in thelobby, but only a few will ever use the initiativesfor anything more than marketing tools. All toooften, flowery mission statements and qualitymanuals continue to gather dust because initiatives

1. Create constancy of purpose

toward improvement of prod-

uct and service, with the aim

of becoming competitive,

staying in business and pro-

viding jobs.

2. Adopt a philosophy that does

not tolerate lack of quality,defects, antiquated training

methods, and inadequate and

ineffective supervision.

3. Cease dependence on inspec-

tion to achieve quality.

4. End the practice of awarding

business on the basis of price

tag. Instead, minimize total

cost. Move toward a singlesupplier for any one item

based on a long-term rela-

tionship of loyalty and trust.

5. Improve constantly and for-

ever the system of produc-

tion and service to improve

quality and productivity and

thus constantly decrease

costs.

6. Institute training on the job.

7. Institute leadership that aims

to help people and machines

do a better job.8. Drive out fear so everyone

can work effectively for the

company.

9. Break down barriers between

departments.

10. Eliminate slogans, exhorta-

tions and targets that ask the

workforce for zero defects

and new levels of productivi-ty. Such exhortations only

create adversarial relation-

ships because the bulk of the

causes of low quality and low

productivity belong to the

system and thus lie beyond

the power of the workforce.

11. Eliminate quotas on the fac-

tory floor. Substitute leader-

ship.

12. Remove barriers that rob

hourly workers, engineers

and people in managementof their right to pride of work-

manship. This means abol-

ishment of annual merit

ratings and management by

objective. The responsibility

of supervisors must be

changed from sheer numbers

to quality.

13. Institute a vigorous programof education and self-

improvement.

14. Put everyone in the company

to work to accomplish the

transformation.

Demings 14 Principles

Source: The preceding was adapted from W. Edwards Demings classic Out of the Crisis, originally published by Massachusetts

Institute of Technology in 1982. A new paperback edition was published by MIT Press in 2000.

QUALITY MANAGEMENT



are not communicated on an ongoing basis. Theyare eventually perceived as lip service or the flavorof the day.

Ive presented a very basic overview of QOS/BOS methodology here, and I do not claim to be aQOS/BOS expert by any means. Several compa-nies specialize in QOS/BOS training and assess-ment, and Ford Q1 suppliers use the concept morecomprehensively as part of their systems. The basictenets of all these initiativeswith continual pro-cess improvement the keyhave been the samesince QOS/BOS methodology started.

QOS/BOS methodology offers an easily under-stood, yet very effective, continuous improvementtool that promotes employee involvement on anongoing basis. I received a copy of the QualityOperating System Primer 1 several years ago andhave used it as a basis for my QMS ever since.

R E F E R E N C E

1. Eric Gall and Sylvia Kaput, Quality Operating SystemPrimer , Ford Motor Co., 1996.

CARL W. KELLER of Clayton, NJ, is a quality assurance

manager for a direct marketing provider specializing in oneto one digital printing. He earned a bachelors degree inspeech pathology/audiology from Richard Stockton StateCollege in Pomona, NV. Keller is an ASQ member and acertified quality manager and quality systems lead auditor.

Lean and Six

SigmaSynergyMade in Heavenby James Bossert

A rope hangs down from the assembly line. Aworker can pull it if there is a quality problem hecannot fix quickly. A tug on the rope causesmusic to play and lights up a number on a board,showing managers where a worker needs help. 1

This is a good example of how the combination of Six Sigma and lean enterprise work to enhance theproduction experience. The worker has the empow-

erment and skills to recognize a problem when itoccurs and, if it cannot be resolved, to shut downthe line to eliminate the root cause. The displayshowing the location of the problem allows peopleto be quickly brought in to help get the line back up.

In my experience, I have found Six Sigma andlean enterprise methodologies to be synergisticeven though they evolved from separate paths.Lean enterprise was developed by Toyoda (gener-ally known as Toyota) as an extension of the Fordmanufacturing system. Toyoda took what itlearned from Ford and advanced the concepts to a broader level, one that helped the Japaneseautomaker improve productivity and profitability.

Lean enterprise is mainly focused on eliminatingwaste. In manufacturing, lean principles includezero waiting time, pull instead of push scheduling,smaller batch sizes, line balancing and shorterprocess times. Value is specified in the eyes of thecustomer, employees are empowered, and perfec-tion is pursued through continual improvement.

Six Sigma is primarily a methodology forimproving the capability of business processes byusing statistical methods to identify and decreaseor eliminate process variation. Its goal is defectreduction and improvements in profits, employeemorale and product quality.

Six Sigma, as developed by Motorola, was anextension of many existing quality tools and tech-niques, but with the addition of financial account-ability. This resulted in process improvement gainsat Motorola that increased productivity and prof-itability.

Different approaches, similar results.

Merging the Two ApproachesIt was inevitable people would start to merge the

approaches. Sometimes, depending on the circum-stances, the results were complementary. Thistended to happen when the Champion (the busi-ness leader or senior manager who ensuresresources are available for Six Sigma projects,reviews results and deals with organizationalissues) and the Six Sigma team worked to find the best combination of techniques to create a robustsolution. This approach was used successfully atGE Capital time and time again.

Today we see a consolidation of lean enterpriseand Six Sigma methods as a differentiator for

o


8/21

many consulting firms. The ones who combine thetwo tend to get more business. This has not always been the case.

Some companies took narrower approaches,treating each methodology as different and unique.This approach tended to create other problems, par-ticularly related to the amount of time needed toresolve problems. Process teams were pulled in dif-ferent directions, and those with limited resourceswere forced to choose one or the other approach.

The end result was the business and customersuffered. The business did not obtain sustainedgains in productivity. The customer, who really didnot care what methodology was being used, didnot see improved product.

So, people began to dislike lean enterprise andSix Sigma, thinking both wasted time, took toolong to implement and ultimately didnt result insatisfied customers.

But they definitely can workand very effec-tively. Honeywell, for example, combined lean andSix Sigma into something called Six Sigma Plus todrive productivity, growth and cash flow. 2 In onecase, a Master Black Belt (a Six Sigma or qualityexpert responsible for strategic implementations)and his team turned profit margin from -$0.9 mil-lion a year to +$3.4 million a year by reducing vari-ation, cycle times and product travel distance.

Personal PreferenceSome believe lean enterprise methodologies must

be completed before Six Sigma gains can be maxi-mized. I, however, think it really does not matterwhich approach is used firstrather the approachshould be based on the personal preference of theSix Sigma Black Belt (BB) who is leading the team.BBs have full-time responsibility for individual SixSigma process improvement projects.

All Six Sigma projects include measurementreview by the team and its Champion. Next stepsare usually discussed at this time. If it is deter-mined some quick hits can be obtained using leanenterprise techniques, then the techniques areimplemented. Because the team and process own-ers can focus on discovering the root causes of theproblem being addressed, there is usually someimmediate buy-in by the team and process owners.

Then when the root cause is eliminated, the leanenterprise techniques are used in conjunction with

statistical process control to maximize the benefits.I have found this timetable particularly success-

ful in nonmanufacturing situationssurprising tosome because lean enterprise is traditionally seenas manufacturing oriented. This latter perception is

based on leans manufacturing roots.But in reality, nonmanufacturing companies are

finding many manufacturing tools and techniques,including lean enterprise and Six Sigma, to beeffective. 3 The combination approach creates anoverarching philosophy of improvement. It is howa BB utilizes all the available tools that will dictatesuccess.

R E F E R E N C E S

1. Late Bloomer, Forbes, April 14, 2003, p. 78.2. William J. Hill and Willie Kearney, The Honeywell

Experience, Six Sigma Forum Magazine, February 2003, p. 34.3. Bank of America, Final Thoughts, Six Sigma Forum

Magazine, May 2003, p. 52.

JAMES BOSSERT is senior vice president, quality and pro-ductivity, Six Sigma programs, Bank of America. Heearned a masters degree in mathematics and applied statis-

tics from Rochester Institute of Technology in New York State. Bossert is an ASQ Fellow, an ASQ certified qualitymanager, auditor and engineer, and a Six Sigma MasterBlack Belt.

Systems ThinkingAn Uncommon

Answerby Steven S. Prevette

Enron. California energy crisis. SUV rollovers.Tire failures. What do these have in common?

Focus on the short term. Short-term gains.Focus on the quarterly profit statement.

Long-term losses. Suboptimized, competing,stove-piped factions.

And an uncommon solution: systems thinking.Why do we lament that the whole is less than

the sum of the parts? It is because we tend not towork on the whole but only on the parts. Systems


QUALITY MANAGEMENT

o


9/21

thinkers, instead, focus on the whole, paying atten-tion to the interactions between the parts ratherthan the parts themselves.

Systems thinking has evolved over the past 100years to become a significant and successful man-agement approach. W. Edwards Deming was oneof the best known systems thinkers, and many con-tinue forward from his work, just as he built uponideas from his predecessors. Russell Ackoff is prob-ably the best known living proponent, through hisprovocative writings and lectures. 1

Systems thinkers approach quality performanceas a holistic enterprise. Quality, productivity andprofit work together to guarantee the success of theorganization. An organization must manage itscomponents. But, more importantly, it must man-age the interactions between components to man-age a system.

How To Destroy a SystemAckoff tells us systems may be destroyed by sep-

arately improving the performance of one or moreof their parts. Deming uses an example of a busi-ness traveler subjected to red-eye flights and alitany of connecting flights, all to save the traveldepartment money, while costing the traveler moretime and impacting his or her performance. Exam-ples of damage to systems abound in DemingsOut of the Crisis2 and The New Economics.3

Deming practitioner Rip Stauffer tells the follow-ing story: 4

In a class I listened to two Six Sigma Black Beltstudents present projects. Each was from a differ-ent business unit within a company. Each businessunit was its own profit and cost center. Each stu-dent proudly announced he could quantify six-fig-ure cost savings from his project. The interestingthing was, each was saving cost by eliminatingservices currently bought from the others busi-ness unit. I then asked the stupid questions:

So, how much will the project cost, altogether?

We estimate about $30,000.

About $25,000.

So, whats the net for the company as awhole?

Of course, since the gains were a wash, thenet was a $55,000 loss. Until that moment, I wasthe only one aware of that fact.

Deming commented that in an orchestra theplayers are not there to play solos as prima donnas,each one trying to catch the ear of the listener. Theyare there to support each other.

The TheoryMore important than examples, though, is theo-

ry. Systems thinkers have a theory. Thinkers focuson grander interactions, with the theory provided by Demings system of profound knowledge,which includes:

Appreciation for a system interactions, sys-tem interrelations and flow.

Knowledge about variation statisticalknowledge, control charting, variation and fac-tual data.

Theory of knowledge knowledge built ontheory, with theory providing the ability topredict how people learn.

Psychology understanding people, theirinteractions and intrinsic motivation.

Systems thinking is characterized by long-termvision and achievement of long-term profits.Systems thinking both requires and allows organi-zations to focus on the long term.

Both Deming and Ackoff encourage a focus onthe life cycle costs of products, not just the purchaseprice. Ackoff has said a system is made up of a setof parts. Each part can affect the system, each parthas an affect on other parts, and every possible sub-group of parts can affect the system. However, nopart can have an independent effect on the whole.

Any attempt to understand a system by dissect-ing its components will lead to the systems losingits essential properties. As Ackoff says, you write;your hand does not write; if you dont believe that,cut it off and see what it can do.

A system must have an aim, and developmentand statement of the aim allow the people withinthe system to understand what they are workingtoward. There is a focus on win-win and success of a whole endeavor. Cooperation between compo-nents is developed and valued because it will leadto overall success for the system and all its compo-nents. For example, applying this methodology,including statistics, management leadership andemployee involvement, to the Hanford Washington

Department of Energy cleanup site led to a 72%reduction in rate of employee injuries. 5

QUALITY PROGRESS I JULY 2003 I 33


10/21

Systems thinkers use many disciplines and tools,from psychology and human behavior throughflowcharts and statistics. Pushing the envelope andthinking outside the box come naturally as systemsthinkers focus on grander and continually improv-ing interactions.

Value of Control ChartsStatistical thinking and knowledge of variation

are integrated within systems thinking. Controlcharts (statistical process control) separate outshort-term fluctuations from important systemchanges. An individual datum is not treated in avacuum (were we above goal or below lastmonths point?).

Instead, this months number is evaluated on thecontrol chart with knowledge of past data and vari-ation. Control charts are not simply used to main-tain the status quo but to spot where improvementis needed. Then, goals for improvement are basedupon achieving statistically significant results, notlucky short-term results. Finally, the achievement of the significant improvement closes the loop andresets the system for the start of another cycle.

Control charting is not just a tool, but a way of thinking, a framework for viewing the system. Thisuse of statistics creates a positive feedback loop,allowing the organization to achieve massiveimprovements.

There are many other methods and techniquesthat are not systems thinking. I think they result indegradation of the system. These techniquesinclude focus on specific numerical targets. Anyperson, with sufficient pressure, can achieve anygiven number through distortion, shifting costs toothers or outright falsification.

What is the cost to the overall system as individ-uals each manipulate the system to achieve theirnumber? Short-term thinking prevails, and theorganization bounces from crisis to crisis. Fire-fighting is rewarded, even as the next fire starts burning. The usual focus on the quarterly profitstatement is an incentive to manipulate numbers tomake the current quarter look good at the expenseof the future.

Without systems thinking, fear often permeates anorganization. Fear cripples many of this nations

companies and individualsfear of the next quarter-ly statement, fear of the next performance appraisal,

fear of absorbing blame from the next failure, fear of the next layoff, fear of diminishing resources, fear of not making the next target number.

Systems thinkers instead work to achieve win-win results, to build the pie bigger rather than fightover the pieces. Knowledge of psychology andhuman behavior allow system thinkers to work todevelop intrinsic motivation. Employees developpride and joy in their work instead of merely chas-ing the latest bonus or trying to avoid blame andthe latest retribution.

Cooperation and InteractionCooperation is the goal for system thinking

interactions, be they between people and people orequipment and people. Since you cannot separatean individual component from its performanceappraisals, individual bonuses (pay for perfor-mance) are minimized. Group effort is encouraged,with participation by the workforce and leadership

by management.The key points of systems thinking are: More attention to interactions than compo-

nents. More knowledge of statistical variation than of

discreet numbers. More long-term than short-term focus. More cooperation than fear, blame and internal

competition.This integrated theory of managing for improve-

ment allows individuals working within a systemto achieve far more than the individuals them-selves could have achieved. Long-term success anda winning environment for all will come with sys-tems thinking practice.

R E F E R E N C E S

1. A Day with Dr. Russell Ackoff, March 3, 2003,Boeing Leadership and Learning Center, Canoga Park, CA.

2. W. Edwards Deming, Out of the Crisis, MIT Press, 2000.3. W. Edwards Deming, The New Economics, MIT Press,

2000.4. Rip Stauffer, in an e-mail to the author, March 10, 2003.5. Steven S. Prevette, Cleaning Up With SPC, Quality

Progress, September 2001, www.asqnet.org/members/news/qualityprogress/2001/0901/104emerging_0901.htm.

I N T E R N E T R E S O U R C E S

Balestracci, Davis, www.dbharmony.com.Crawford-Mason,Clare, www.managementwisdom.com.


QUALITY MANAGEMENT


11/21

Deming Electronic Network, http://deming.ces.clemson.edu/pub/den/index.html.

Deming Institute, www.deming.org.Hanford Trending Primer, www.hanford.gov/safety/

vpp/trend.htm.In2InThinking, http://in2in.org.

STEVEN S. PREVETTE is a quality assurance engineer forsafety and health for Fluor Hanford, a prime contractor tothe U.S. Department of Energy and a business project of Fluor Corp., in Aliso Viejo, CA. He also is an adjunctinstructor at City University in Richland, WA. Prevette isa member of ASQ and an ASQ certified quality engineer.

Complexity TheorySimplifies Choicesby Duke Okes

Most business management and improvementmethodologies provide somewhat finite structuresto achieve success. For example, guidance for busi-ness excellence according to the Malcolm BaldrigeNational Quality Award criteria consists of sevenmajor categories and more than 90 specific items to be addressed. ISO 9001 contains five major ele-ments that together contain more than 130 shalls.Six Sigma improvement projects are carried outaccording to the define-measure-analyze-improve-control process. W. Edwards Deming provided 14detailed points necessary for management to trans-

form organizations.A less prescriptive approach for helping members of organizations identify and carry outimprovement opportunities is to provide a frame-work for looking at the organization in new ways.Peter Senges learning organization is such anexample, emphasizing the need to find ways toembed continual transformational learning intokey business and personal processes and activities. 1

Over the last two decades complexity theory hasalso taken on a similar role. At a macro level, theincreased interconnections enabled by computers,

communication technologies and global businessnetworks have created a more complex economic

and social environment. At the micro level, theincrease in knowledge work means more of whatgoes on within organizations involves the complexsocial interaction of many people, rather than sim-ply the manipulation of physical assets.

In effect, organizations are now seen as complexadaptive social systems that operate technical sys-tems and processes to meet customer requirements. 2

CharacteristicsIn the past, organizations were thought of as

machines in which cause and effect relationshipswere linear and unidirectional. In complex adap-tive systems, cause and effect relationships are bidirectional and nonlinear, meaning a smallchange can have large effects.

In addition, while machines have designers, thepower of complex systems is that they are self-organizing. The result is while performance is lesspredictable in advance, it is often much greaterthan could be achieved through top-down control.

This does not mean complex systems operatewithout guidance. Agents (whether individuals or

groups) in such systems operate according to a smallnumber of rules. Such rules are intended to commu-nicate the general direction required while allowingconsiderable autonomy in how to get there.

The system can therefore more flexibly respondto input from the environment in which it operates.Maximum performance of the system is achievedwhen it operates at the edge of chaos. 3 An exampleof the edge of chaos in the physical world might bethe thin line automotive road rally drivers main-tain between forward progress of the auto and lossof control.

Performance of most systems, however, is mea-sured according to multiple criteria. So while acomplex system might perform well on one vari-able, it is unlikely to be able to maximize perfor-mance for all criteria. Paying attention to theenvironment is required to detect when a shift inpriorities has occurred .

From Theory to PracticeSo, how can complexity theory be used to man-

age and improve organizational performance?Here are five ways:

1. Ensure the mission, values, goals and priori-ties of the system are clear. Keep in mind an


o


12/21

organization actually consists of nested com-plex systems and subsystems (for example, business processes, departments and individ-uals), indicating these issues need to beaddressed at each level of the system. Andrather than doing this through a one-way, top-down approach to strategy, a process such ashoshin planning can be used. Hoshin planninguses an iterative process to develop anddeploy strategic direction and methods forachieving it, involving all levels of the organi-zation to ensure alignment.

2. Provide only as much control as necessary foreach system. An assembly line or bank depositmay need to be managed according to veryspecific guidelines, while considerable flexibil-ity may need to be allowed for hotel deskclerks when they deal with customer com-plaints. Unlike its predecessor, the 2000 editionof ISO 9001 recognizes this, noting the extentof process documentation will vary fromorganization to organization and process toprocess. The more a process relies on commu-nication and cognition, the more complex it islikely to be.

3. Ensure there is sufficient feedback from theenvironment so the system can detect and acton signals indicating a need for change.Examples of feedback are customer satisfactiondata, competitive analysis and benchmarking.Also keep in mind that since there are levels of systems within an organization, mechanismsto provide internal feedback between subsys-tems should also be provided.

4. Monitor a wide range of system performancemetrics to understand more fully how well theorganization is performing. A balanced score-card better enables consideration of trade-offsrelative to business decisions and can also beapplied at the departmental and process levels.

5. Make many small changes rather than majordisruptions to improve system performance.Of course, what is considered small will be dif-ferent depending on the size of the system orsubsystem. But changes that can be managed bythe system do not create problems for cus-tomers and ensure continuous incremental

learning will be more successful over the longterm. Many small changes made in the general

direction in which the organization wants tomove will cause a tipping point to eventually bereached. Beyond this point the organization willhave achieved a transformation in capabilities. 4

As these examples indicate, many existing quali-ty management practices support the view of orga-nizations as complex adaptive systems. When andhow each should be applied depends on the typeof organization and its current situation. An expertis someone who has the ability to match the correcttool to the situation, and complexity theory pro-vides a lens through which such decisions canmore easily be made.

Other Important IssuesBecause the interaction between agents, systems

or subsystems creates the power of complex sys-tems, there are additional opportunities for helpingsuch systems perform better. These include payingattention to the entities themselves (agents andsubsystems, for example) and the interactionamong them.

Since what emerges from the system is largely afunction of the synergy created by the differences

between agents, systems and subsystems, one wayto manage performance is to ensure there are suffi-cient differences between them.

Of course, too much difference may be as bad astoo little, but differences in thinking processes (forexample, as measured by the Myers-Briggs TypeIndicator), learning styles, the focus of educationalpursuits and organizational experiences mean awider variety of ideas can be synthesized. This indi-cates personnel selection and development, as wellas organizational design, are important for helping acomplex adaptive system perform better.

A focus on the interaction between agents, sys-tems and subsystems means paying attention tocommunications. The amount, direction, type andquality of the information flow are indications of how much leverage is currently being gained fromthat interaction.

Improvement might include adding to the com-munication when it is insufficient, creating betterchannels through which the communication canoccur (such as through movement of personnel or

by providing electronic tools) or reducing commu-

nication when it is creating overload.And finally, given that organizations are soci-


QUALITY MANAGEMENT


13/21

eties, the importance of language is paramount.Changing the language used can slowly but surelyhave an impact on the perspective the organization(agents and subsystems) has about itself, its envi-ronment and its possibilities. For example, do youremployees say they work for, or with, their man-agers? Are suppliers called vendors or partners?These are very subtle differences, but most certain-ly shape the interactions between players.

R E F E R E N C E S

1. Peter Senge, The Fifth Discipline: The Art & Practice of theLearning Organization , Currency/Doubleday, 1994.

2. David Nadler and Michael Tushman, A CongruenceModel for Diagnosing Organizational Behavior in D.A.Kolb, I.M. Rubin and J.S. Osland, eds., The OrganizationalBehavior Reader, fifth edition, Prentice Hall, 1991, pp. 544-561.

3. R.T. Pascale, Surfing the Edge of Chaos, Sloan Manage-ment Review, Vol. 40, No. 3, pp. 83-94.a

4. Jerry Kurtyka, The Science of Complexity: A New WayTo View Industry Change, Journal of Retail Banking Services,Vol. 21, No. 2, pp. 51-58.

A D D I T I O N A L R E S O U R C E S

The application of complexity theory to organizationalmanagement is still in the early stages of translation of theo-ry to practice and currently tends to rely more on metaphorsthan tools. However, for those interested in learning more,following are some recommended sources on complexitytheory and its application to organizations:Axelrod, Robert, and Michael Cohen, Harnessing

Complexity: Organizational Implications of a ScientificFrontier, Free Press, 1999.

Kelly, Kevin, Out of Control: The New Biology of Machines,Social Systems and the Economic World, Perseus Books,1994.

Lisack, Michael, ed., The Interaction of Complexity and

Management, Quorum Books, 2002.Marion, Russ, The Edge of Organization: Chaos and

Complexity Theories of Formal Social Systems, SagePublications, 1999.

Waldrop, Michael, Complexity: The Emerging Science at theEdge of Order and Chaos, Touchstone, 1992.

DUKE OKES is a consultant and educator in Blountville,TN. He received a masters degree in education fromTusculum College in Greenville, TN. Okes is an ASQFellow and co-editor ofThe Certified Quality ManagerHandbook , second edition. He is also an ASQ certified

quality manager.

Baldrige: Its Easy,Free and It Worksby Dale Crownover

Why do so many people consider the MalcolmBaldrige National Quality Award criteria diffi-cult? Whats so hard about expecting an organiza-tion to have some sort of idea of what its peopleare doing, how they are doing it and why they are

doing it?What might be considered really hard is learninghow to manage opportunities for improvementsinstead of managing known strengths. So beforeyou commit to a management tool, think about itfor about seven days. Whatever you do though,start. Start any day you care to. If you dont start, itwont get easier.

MondayBaldrige StrategicPlanning Category

Baldrige doesnt have the strategic answers; it

has the strategic questions. As my colleague JohnDarrouzet says, these are more significant becausetheyre the commonsense ones you want to answer.If you consider the questions in 25 Simple Ques-tions for Comparing Tools (p. 38), youll quicklysee Baldrige lines up the questions that help youcontinuously improve.

Today: Compare the tools questions. Do theyenhance your insights into the way you conductyour business?

TuesdayBaldrige Customer

And Market Focus CategoryWhen choosing what quality tool to use, remem-

ber you are now the customer. If Baldrige is rightfor you, youll come around to it eventually. Youmay date other management tools for a while, but over time the strengths of the Baldrige pro-posal will be undeniable to those who get it.

1. Baldrige has similar criteria for business,healthcare, education and, soon, nonprofitorganizations.

2. Organizations in countries all over the worldhave adopted the Baldrige Criteria for Perform-ance Excellence.1


(continued on p. 40)

o



Plan1. Does the tool encourage you to plan what you

want your company to do to take it to the next

level? Does it encourage you to:

2. Write down what your companys business

environment is and what your significant

relationships with customers, suppliers and

other partners are? (BC Preface 1)

3. Write down your companys competitive

environment, your key strategic challenges

and what your system for performance

improvement is? (BC Preface 2)

4. Write down how your company establishes

its strategic objectives to enhance its com-

petitive position, overall performance andfuture success? (BC 2.1)

Do5. Does the tool encourage you to do what you

want to do to take your company to the next

level? Does it encourage you to:

6. Find out what your customers want so your

products and services stay current? (BC 3.1)

7. Build relationships with customers, increase

customer loyalty and determine customer

satisfaction? (BC 3.2)

8. Identify and manage significant processes

that create customer value and achieve

business success and growth? (BC 6.1)

9. Manage support processes? (BC 6.2)

10. Work in a way that enables your company

and employees to achieve high perfor-

mance? (BC 5.1)

11. Build employee knowledge, skills and capa-

bilities? (BC 5.2)

12. Maintain a work environment and employee

support climate that contribute to the well-

being, satisfaction and motivation of allemployees? (BC 5.3)

13. Establish links between your plans and what

you do so you can measure, analyze, align

and improve your performance data and

information at all levels and in all areas of

your organization? (BC 4.1)

14. Ensure the quality and availability of linked

data and information so you can mine data-

bases with timely reports? (BC 4.2)

Choosing a management tool to take your company to another level is kind of like getting married.

You know what datings like and youve had your fill. Now its time to talk commitmentlifelongif

you want.

Heres a list of 25 questions to help you evaluate each of the tools featured in this Quality Progress

issue. References in parentheses are to sections of the Baldrige criteria (BC). The underlying ques-

tion is, does the tool you are considering help you plan-do-check-act (PDCA)? If not, why would you

use it?

QUALITY MANAGEMENT

25 Simple QuestionsFor Comparing Tools



Check

15. Does the tool encourage you to check what

youve done to take your company to the

next level? Does it encourage you to:

16. Chart your most significant customer

focused results (past, current, projected,

showing trends), including customer satis-

faction and customer perceived value, seg-

mented by appropriate customer groups

and markets and including appropriate com-

parative data and benchmarks? (BC 7.1)

17. Chart your most significant product and

service performance results (past, current,projected, showing trends), segmented by

product groups, customer groups and mar-

kets with appropriate comparative data and

benchmarks? (BC 7.2)

18. Chart your companys key financial and mar-

ketplace performance results (past, current,

projected, showing trends) by appropriate

market segments with appropriate compara-

tive data and benchmarks? (BC 7.3)

19. Chart your most significant human resource

results (past, current, projected, showing

trends), including work system performance

and employee learning, development, well-

being and satisfaction, segmented to

address the appropriate diversity of your

workforce and the different types and cate-

gories of employees with appropriate com-

parative data and benchmarks? (BC 7.4)

20. Chart your most significant operational per-

formance results (past, current, projected,

showing trends) that contribute to the

achievement of company effectiveness, seg-

mented by appropriate product groups and

markets with appropriate comparative data

and benchmarks? (BC 7.5)

21. Chart your most significant governance and

social responsibility results (past, current,

projected, showing trends), including evi-

dence of fiscal accountability, ethical behav-

ior, legal compliance and organizational

citizenship, segmented by appropriate busi-

ness units, with appropriate comparativedata and benchmarks? (BC 7.6)

Act22. Does the tool encourage you to act to take your

company to the next level after planning, doing

and checking? Does it encourage you to:

23. Govern and guide your company, with

senior leaders reviewing the performance

you have charted and checked? (BC 1.1)

24. Fulfill your companys responsibilities to the

public, ensure ethical behavior and prac-

ice good citizenship? (BC 1.2)

25. Convert strategic objectives based on your

checking of the results of your plan into

future action plans, linked to charted results

that contain significant performance mea-

sures and indicators, thus starting PDCA

again and thereby providing continuous

improvement? (BC 2.2)


16/21

3. You can start at the state level (baby Baldrigesome people call it) and work your way up if you prefer not to start at the national level.

4. The criteria are continually being updated.5. The criteria are free.Today: Compare the other quality methodolo-

gies with what the Baldrige program offers indepth, breadth and opportunities.

WednesdayBaldrigeMeasurement, Analysis andKnowledge Management Category

Most organizations already have what theBaldrige criteria ask for but do not have a systemsperspective for their approaches or deployment.With the right software, currently being developed by software engineers for Texas Nameplate, many

more organizations will be able to operate theBaldrige way, whether or not they apply for theaward.

Today: Compare all the different management

tools to see if they require you to change the wayyou operate instead of simply reviewing andimproving it, as is the case with Baldrige.

ThursdayBaldrige HumanResources Focus Category

Certification is not the objective with Baldrige.Learning is. Winning the award is not the objective.Winning employee and customer loyalty is.

If you have a lot of money, maybe you can affordmanagement by flavor-of-the-month training.Maybe you can afford to go out and hire somebody

to implement the tool youve chosen. Maybe thatsomeone else will understand the tool and your

operations better than any of your own people do.Maybe these other programs wont even be aroundyears from now.

But if you dont have a lot of money, make thingssimple. Baldrige allows you to get as involved asyou want. If you dont want to learn about the crite-ria on your own, become a Baldrige examiner andlearn from the experts very affordably.

Today: Compare the commonsense Baldrige cri-teria approach to learning to those of the other pro-grams.

FridayBaldrige ProcessManagement Category

Baldrige doesnt process people better than othertools do. Instead, people process better withBaldrige.

While many organizations have some qualitytools (ISO 9000 and total quality management, forexample), these tools seemed to us at Texas Name-plate like having other people telling us how theycould help us run our business. Baldrige doesntdo that. It doesnt process you. You do your pro-

cesses, and then link them from a Baldrige, systemsperspective.Darrouzet says, By faithfully asking and

answering the Baldrige questions, you can better judge your past actions, choose your present cours-es of action and decide your future.

Today: Compare what processes it takes to suc-ceed with each quality management tool.

SaturdayBaldrige Results CategoryIn some ways, the worst thing you can do is win

the Baldrige Award because then you no longer get

examiner feedback.When I was a kid working at my dads company, businesses raised their prices to make more moneyor to provide raises for employees. But many com-panies rather quickly learned they could not raiseprices of their products or services unless theyraised their standards.

Unfortunately, some businesses still havent fig-ured that out. Thats why organizations such asASQ will always be needed. Baldrige, too, providesorganizations the opportunity to figure out theselittle things we all think we know but dont do. As

a result, Baldrige recipientswhether business isgood or badalways know where they stand and


By asking and answering theBaldrige questions, you can

better judge your past actions,choose your present courses of action and decide your future.

QUALITY MANAGEMENT

(continued from p. 37)


17/21

why. They disagree with the its the economy, stu-pid outlook.

Today: Compare what youll do with the feedback youll get from the different quality manage-ment tools.

SundayBaldrige LeadershipCategory

In a strange way, its more important to figureout what you want to use rather than what youthink you need to use. If the system doesnt bring

out the passion in your gut, how do you expect tocontinue working with it over the long haul, for 10years or even generations?

As Darrouzet and I described in our book, Take Itto the Next Level,2 we found passion for our businessrenewed through Baldrige more than any other sys-tem. The Baldrige criteria help you lead people.

I was recently asked to accept a leadership rolewith the Quality Texas Foundation. I quickly recog-nized that after 10 years of working with the crite-ria, I really knew no other way to lead than byusing Texas Nameplates Baldrige core values:

Strategic planning that looks at the futurefrom an agile, systems perspective. Performance excellence driven by our cus-

tomers, markets and love of family. Wise practices that use measurements, analy-

sis and knowledge to help take courses of action based on facts, judgments and decisionmaking processes.

Resources that value our people first and offer both personal and organizational learning.

Process management that welcomes and nur-tures innovation.

Charted results that track, project and com-pare results valuable to stakeholders. Visionary leadership that encourages pur-

poseful work, public responsibility and goodcitizenship.

Based on those values, I suggested the QualityTexas Foundation start by answering the Baldrigequestions. We did, and now we know we have away to go. Our goal is to apply for the BaldrigeAward in the not-for-profit category. It will certain-ly take us more than seven days to do it, just as itwould with any tool.

Today: Compare all the various tools and askyourself whether you, personally, are willing to

commit to a program. And if you will lead in com-mitment, will you have a community of peers onwhom you can rely for good counsel?

A C K N O W L E D G M E N T

John Darrouzet, Baldrige examiner and vice president andgeneral counsel of Texas Nameplate Co., assisted in writingthis article.

R E F E R E N C E S

1. Criteria for Performance Excellence, Baldrige NationalQuality Program, 2003, www.quality.nist.gov.

2. Dale Crownover, with Linda Bush and John Darrouzet,Take It to the Next Level, Next Level Press, 1998.

DALE CROWNOVER is president and CEO of TexasNameplate Co., Dallas. He is a member of the BaldrigePanel of Judges, a Baldrige examiner and chair of theQuality Texas Foundation. Crownover is a member of ASQ.

An IntegratedApproach Systemby Tom Kubiak

Over the last 20 years or so, many quality tools,techniques, strategies or approaches have comeand gone.

Those of us who have been serving in qualityduring this time have seen the management of ourrespective organizations reach out and grab quality

fads as if in search of a holy grail that will drivethem to greatness. In a few years, one fad is out,and a new one is in.

This reminds me of what W. Edwards Demingwould say about tampering with a system.Tampering creates variation. Changing qualityapproaches frequently causes an organization tolose momentum and backslide. This often leaves a bad taste and nothing but disdain for an effectiveapproach that was poorly implemented.

Since about 1980, busy quality professionalshave been implementing a wide variety of

approaches, such as quality circles, statisticalprocess control (SPC), ISO 9000, reengineering,


o


18/21

benchmarking, balanced scorecard, MalcolmBaldrige National Quality Award criteria, SixSigma and lean manufacturing. These qualityapproaches are not entirely independent. Whenused in an integrated manner, they can build ahigh performance organization.

ISO 9000ISO 9000, in essence, represents the fundamental

concepts and framework necessary for an effective, basic quality management system. Today thou-sands of organizations worldwide are registered ashaving a quality system compliant with ISO 9000,which was first introduced in 1987. Does this meantheir product or service quality has improved? Theanswer is both yes and no, as you will see.

The flexibility built into the ISO 9000 standardsmakes them more than suitable for any organiza-tion that delivers tangible products and services.Simply put, ISO 9000 asks an organization to docu-ment what it does and to adhere to that documen-tation.

If the processes an organization follows are bador not suitable for the products and services, ISO9000 will not improve quality. It will, however, pro-vide a consistent basis for performing the requiredwork. Consistency means stable variation andprocess predictability, key objectives of Six Sigma,which Ill discuss later.

Baldrige CriteriaThe Baldrige Award, implemented through its

criteria for performance excellence, is a holistic,integrated set of criteria that address best business

practices identified by experts in the field.Businesses or organizations in manufacturing,

service, education and healthcare apply for thisannual award by completing a self-assessment doc-ument defined by rigorous rules and questions thatmust be addressed. A team of examiners reviewsthese self-assessments.

Each Baldrige applicant receives a comprehen-sive feedback report that includes an executivesummary and detailed lists of strengths and areasfor improvement. The feedback report provides theapplicant with objective, nonprescriptive andactionable information to improve its organization.Although provided at a high level, the feedbackpoints out key or critical gaps in meeting the intentof the criteria.

The strength of the award lies with its compre-hensiveness in four areas:

1. The seven criteria categories (see Baldrige:Its Easy, Free and It Works, p. 37).

2. Core values and concepts, including visionaryleadership, customer driven excellence, organi-zational and personal learning, valuing employ-ees and partners, agility, focus on the future,managing for innovation, management by fact,social responsibility, focus on results and creat-ing value, and systems perspective. An autopsyof any successful organization will show thesevalues at the foundation. They characterize theorganization and are part of its DNA.

3. A scoring system predicated on the premisethat results flow from effective approaches sys-tematically deployed. In essence, results happenthrough planned cause and effect relationships.Anything else is a recipe for disaster.

4. Refinements of processes in which processesare reviewed and improved, with cycles of improvement being triggered either throughthe occurrence of specific events or the passageof time.

Six Sigma and LeanSix Sigma was introduced by Motorola in the

early 1980s and served as that companys founda-tion for driving breakthrough improvement.Though there were some early adopters of SixSigma in the mid-1990s, such as General Electric

and Honeywell, it wasnt until the late 1990s thatSix Sigma began surfacing in other companies. By


The key to gauging both theperformance and health of an

organization and its processeslies with its selection anduse of metrics.

QUALITY MANAGEMENT


19/21

2000, the demand for Black Belts (BBs) and MasterBlack Belts (MBBs), cornerstone roles in Six Sigma,started sweeping the globe.

Opinions on what Six Sigma is can differ: Philosophy The philosophical perspective

views all work as processes that can bedefined, measured, analyzed, improved andcontrolled (DMAIC). Processes require inputsand produce outputs. If you control the inputs,you will control the outputs. This is generallyexpressed as the y = f (x) concept.

Set of tools Six Sigma as a set of tools includesall the qualitative and quantitative techniquesused by the Six Sigma expert to drive processimprovement. A few such tools include SPC,control charts, failure mode and effects analysisand process mapping. There is probably littleagreement among Six Sigma professionals as towhat constitutes the tool set.

Methodology This view of Six Sigma recog-nizes the underlying and rigorous approachknown as DMAIC. DMAIC defines the steps aSix Sigma practitioner is expected to follow,starting with identifying the problem and end-ing with the implementation of long-lastingsolutions. While DMAIC is not the only SixSigma methodology in use, it is certainly themost widely adopted and recognized.

Metrics In simple terms, Six Sigma qualityperformance means 3.4 defects per millionopportunities (accounting for a 1.5-sigma shiftin the mean). Yes, I know about the on-goingdebate regarding the validity of the 1.5-sigmashift, but for the sake of practicality and tofacilitate further discussion, lets accept SixSigma as a metric in these terms.

Six Sigma is a fact based, data-driven philosophyof improvement that values defect prevention overdefect detection. It drives customer satisfaction and bottom-line results by reducing variation andwaste, thereby promoting a competitive advantage.It applies anywhere variation and waste exist, andevery employee should be involved.

At this point, some readers (Six Sigma purists)will be quick to say, Youre not just talking aboutSix Sigma; youre talking about lean too. Yes, Iam! Today, the demarcation between Six Sigma and

lean has blurred. With greater frequency, we arehearing about concepts such as lean sigma, because

process improvement requires aspects of bothapproaches to drive positive results.

Six Sigma focuses on reducing process variationand enhancing process control, while lean (some-times known as lean manufacturing) drives outwaste (nonvalue added) and promotes work stan-dardization and flow. Six Sigma practitioners should be well-versed in the fundamental concepts of each.

Many organizations have jumped on the SixSigma bandwagon. Search www.careerbuilder.com, www.monster.com, or ASQs own job searchwebsite and you will quickly see hundreds, if notthousands, of postings for qualified BBs and MBBsacross the world.

Some organizations see Six Sigma as a panacea.As we continue, we will see how Six Sigma, sup-plemented with other approaches, will help organi-zations achieve increasingly higher levels of performance.

Balanced ScorecardThe key to gauging both the performance and

health of an organization and its processes lieswith its selection and use of metrics. A well-designed set of metrics provides a meaningfulframework for measuring performance both verti-cally and horizontally. Not only are the metricslinked vertically and horizontally, but they are also balanced to provide different perspectives such as:

Customer The voice of the customer is notthe organizations interpretation of what thecustomer is saying. The customer perspectivelooks at how the customer is made satisfied ormade unsatisfied. The voice of the customer isheard through surveys, focus groups and awide variety of other listening posts.

Employee Again, this is not the organiza-tions interpretation of what the employee issaying. It is obtained in manners similar tothose used to obtain the customer perspective.

Supplier This metric perspective is oftenoverlooked or relegated to an organizationallevel lower than senior management. In manyorganizations, this component represents a sig-nificant dollar percentage of revenue.

Organization This component is internallyfocused and measures how efficiently and

effectively an organization delivers its prod-ucts or services. It can be divided into two



20/21

subcomponents: predictive and operational.The predictive subcomponent includes mea-

sures of processes in the customers line of sight (if these metrics are moving in thedesired direction, the organization should beable to predict customer satisfaction). Forexample, if on-time delivery and the quality of the products and services (both the results of internal processes) are high when measuredfrom the organizational point of view, it is rea-sonable to predict or correlate this with a highlevel of customer satisfaction.

Conversely, the operational subcomponentincludes measures of processes invisible to thecustomer, such as productivity, inventoryturnover, shrinkage and machine downtime.The customer neither sees nor cares how wellan organization performs in these areas. Oftenorganizations will confuse predictive andoperational metrics or confuse predictive and

customer satisfaction measures. This can leadto a false sense of security and inaction.

Financial This perspective includes the typ-ical financial measures or ratios often report-ed on a balance sheet, profit and loss state-ment or annual report. Senior managementcan easily become obsessed with this perspec-tive, almost to the exclusion of the others thattruly drive cost.

In simplest terms, manage and improveprocesses associated with the customer,employee, supplier and organizational per-spectives, and the financial perspective willimprove accordingly. Conceptually, this isanalogous to the Six Sigma y = f (x) equationthat relates process inputs to process outputs.

Managing solely by the financial perspectivecan easily break the other measurement per-spectives. For example, applying pressure toan organization to reduce costs will often lead


Scenario Metric characteristics Organizational characteristics

One Current. Profitable. Actionable. Likely a leader in its industry. Visible. Baldrige core values are visible throughout. Balanced. Benchmarks best practices regardless of the industry. Customer focused. Process improvement is a way of life. Well-understood by employees. Statistical significance triggers action. In-process measures are prevalent. Owned. Leading benchmarks.

Two Out-of-date by more than one reporting period. Mediocrity reigns. Drives activity just prior to executive-level reviews. Prides itself on being not too bad. Balanced means looking at different financial statistics. Accountability is weak and not easily traceable to an individual Highly visible when the senior staff visits. or position. Confusing to most employees. Benchmarking is limited to other internal organizations or within Metrics are limited to those easy to measure. its own industry or business sector. End of process metrics dominate, with just a light There is no good time for improvement.

peppering of in-process metrics. Reaction is based on one data point. Goals are set independent of performance or capability.

Three Always out-of-date. Bankruptcy is imminent. Few and far between. Accountability, what accountability? Gamed to promote self-preservation. Employee turnover is high and morale is low. Invisible, even if available. Probably in the midst of being acquired by a scenario one Benchmarking is nonexistent. organization.

Goals are nonexistent.

Metric Scorecard ScenariosTABLE 2

QUALITY MANAGEMENT


21/21

to process shortcuts, wider process variationand longer cycle times. This cost reductionpressure is likely to be accompanied by theremoval of peopleusually the only elementholding broken processes together. Subse-quently, process performance is compromisedand moves in an undesirable direction.

Organizations that utilize a balanced metricsscorecard concept usually distinguish themselvesfrom those who dont. Walk into any organization,ask for its metrics scorecard and you will see one of the three scenarios shown in Table 2.

I hope it is clear implementation of a balancedscorecard can be a powerful approach for aligningand focusing an organization on its objectives.

Fitting It All TogetherThe various quality approaches are not indepen-

dent of one another but can work in a mutuallysupporting and integrated manner. It is not neces-sary to abandon one for another. Table 3 allows usto step back and view the key linkages among bal-anced scorecard, Baldrige criteria, Six Sigma andlean, and ISO 9000.

It can be said that: Baldrige provides integration. Balanced scorecard gauges progress. Six Sigma and lean drive improvement. ISO 9000 focuses on basics

It is not necessary or productive to leap from fadto fad as so many organizations have done. Takethe time to gain a deeper understanding of eachapproach. When thoroughly understood andimplemented properly, each approach brings aunique set of perspectives and insights for drivingorganizational excellence.

TOM KUBIAK has been corporate director, Sears Sigma, forSears, Roebuck and Co., Chicago, since May 2002. He pre-viously served in a variety of roles, including quality andSix Sigma, over a 23-year career with Honeywell. Kubiak isa Senior Member of ASQ and chair of ASQs Publication Management Board. He is certified as an ASQ Six SigmaBlack Belt, quality manager, quality engineer and reliabili-ty engineer and participated in the launch of the ASQ SixSigma Forum, Certified Six Sigma Black Belt examinationand Six Sigma Forum Magazine .

commentPlease

If you would like to comment on this article, please

post your remarks on the Quality Progress

Discussion Board at www.asqnet.org, or e-mail

them to [email protected].

Balanced scorecard Baldrige criteria Six Sigma/lean ISO 9000

Focuses on measuring an Organization viewed as an Provides traction for trans- Creates process stability andorganization from a holistic, integrated system of strategies lating Baldrige areas for paves the way for Six Sigma/lean.integrated perspective. and processes encompassing improvement into strengths. Is tightly linked to Baldrige cate-

Metrics are linked vertically the concepts of the balanced Reduces process variation, gory 6.0 (process management).and horizontally across scorecard, Six Sigma/lean and cycle time and waste. Calls for process improvement,Baldrige categories. ISO 9000. Drives improvement in a key to driving higher Baldrige

The five perspectives link Provides an overall assessment balanced scorecard metrics. scores. tightly to Baldrige category 4.0 of strengths and areas for Creates an agile, learning Integrates more Baldrige(measurement, analysis and improvement. organizationa Baldrige concepts in the 2000 revision.

knowledge management) and Serves as an overarching umbrella core value.category 7.0 (business results). for managing an organization.

Ties to Baldrige core value of Predicated upon cycles ofmanagement by fact. process improvement.

Key Linkages Among Quality ApproachesTABLE 3

Quality Management Multiple Choice

Documents