Influential Voices Reaction to Talking Quality to the C-Suite

November Roundup: The post by Influential Voices blogger Dr. Suresh Gettala, Talking Quality to the C-Suite, looked at how quality professionals, certainly experts in their field, may fall short in selling quality to top management and offered his perspective and advice. Throughout the month of November, ASQ Influential Voices bloggers contributed their ideas on talking to top management about the importance of quality.  This month’s topic certainly generated some very interesting and somewhat diverse opinions.

Pam Schodt responded that any quality discussion with the C-Suite should be tailored for that audience and provided suggestions for accomplishing that in her post Corporate Communication, 5 Keys to Success.

Jennifer Stepniowski agreed that getting the attention of senior executives can be challenging and added even more tips in her blog, C-Suite Speak… “Quality.” She advised that quality professionals remember a call to action which needs to be clearly expressed and not just implied.

Robert Mitchell agreed that quality professionals need to speak the senior executive’s language in his post Talking Quality with the C-Suite.  He wrote that his 34 years of experience in a global manufacturing company echoed and reinforced much of what Dr. Suresh suggested.

Dr. Manu Vora wrote that the easiest way to connect with C-Suites is to use the cost of quality approach which he explains in his post Talking to the C-Suite About Quality.  He says this tool lets executives know where there is waste in the system and how they can reduce the Cost of Quality through continuous process improvements.

Nicole Radziwill wrote that it’s important to let the C-Suite know that you can help them leverage their organization’s talent to achieve their goals, then continually build their trust.  In her blog, If Japan Can, Why Can’t We?  A Retrospective, she added that the key to talking quality with the C-Suite is empathy.

Edwin Garro recalls a fascinating lecture by Deming and his startling answer to an audience member’s question in his college days.  In his blog, Deming and the C-Suite.  A Life Time Lesson for Management and Engineering Students, he writes that Deming’s definition of an effective C-Suite manager was one who understood variation, not one who forgets the voice of the customer, employee and the process itself.

In her response and blog, AUDIT, a tool to talk with the C-Suite, Jimena Calfa agreed that talking to the C-Suite about Quality is a real challenge as senior executives often consider quality to be a waste of money instead of THE tool to increase profit.

Tim McMahon wrote that getting executives in your company to want to support and then adopt Lean Thinking may be difficult but not impossible.  In his blog, 5 Ways to Get Management Buy-in: What’s in it for me?, he shares a list of ideas to help you convince your management to start thinking Lean.

However, John Hunter had a different perspective in his post Making Your Case to Senior Executives.  He believes success will come from concentrating on short term financial measures while also crafting a story to make your case for long term improvements.

Scott Rutherford also shares a different approach in his post You are not selling Quality to C-Suite. You are selling short-term relief.  While changing corporate behavior from below is challenging, he believes there are ways for quality practitioners to have influence.

Facing Cultural Barriers by Leaders to Strengthen a Culture of Quality

This is a guest post by Luciana Paulise, the founder of Biztorming Training & Consulting. She is a speaker, author, and examiner for the National Quality Award and Team Excellence Award in Argentina.  She is also a columnist for Infobae, Destino Negocio, and a blogger for ASQ Influential Voices.  You can visit Luciana’s blog at: http://www.biztorming.com.ar/en/news.

Something was not going well at an organization we’ll call Company ABC, a small business within the automotive industry in the suburbs of Buenos Aires, Argentina. Some improvements were being made, many procedures were being followed, and employees were adopting new control processes.

Still, turnover was high, as well as frustration with certain processes that had not shown any improvements at all—while profitability was decreasing. Managers said that line employees were the problem; they were generating issues and not solving them. On the other side, employees were convinced the problem was in the communication channel to top management.

Even though it was a small business, communication from the bottom up was as difficult as in a larger corporation. The owners were asking for feedback on issues, but they were not providing ways to actually receiving the feedback. E-mails to leaders were not being replied to, approvals took longer than expected, and meetings were almost impossible to schedule.

What went wrong in this organization? How could managers and employees bring issues forward as required by a quality culture? How could they strengthen the culture of quality in this environment? What were the main barriers?

Experts says that the employees’ behavior is based on company culture, but what is organizational culture, exactly? As per Wikipedia, “Culture includes the organization’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits.” But who determines these factors in organizations so as to define the culture?

Usually top management defines which habits or behaviors are right by rewarding or punishing them. Therefore, company culture is modeled upon top management behavior.

That was my “a-ha” moment. The main cultural barrier to making this company a better place was actually the top management. They thought the problem in the organization was their people, but they had not considered themselves as part of the problem. They were not “walking the talk.” And people were noticing it.

Then I recalled Gandhi’s quote: “You must be the change you want to see in the world.” Leaders needed to take the first step, and needed to be trained to do so. So now the question was, how best to train them?

Edwards Deming developed a leadership model that could be really useful here to train the top. The “System of profound knowledge” that he introduced in his last book, The New Economics, has four interrelated areas: appreciation for a system, knowledge of variation, theory of knowledge, and psychology. Managers were probably not going to get this theory easily, but an analogy could help.

I compared the four areas with four human types of intelligence, so that leaders could understand that they needed to manage their behavior in an integral way so as to solve all the problems at the same time:

  1. Spiritual: understanding the company in a holistic way, as a system, is appreciating the business as a network of interdependent components that work together to accomplish the same aim. These components includes planning, context, competition, processes, shareholders, customers, suppliers, employees, the community, and the environment. Like an orchestra, it’s not enough to have great players. They need to play well together. Leadership needs to focus on all the parts that affect the organization and how they work. The leaders wanted their middle managers to work together, but they didn’t have common objectives, so each of them just focused on their part of the game.
  2. Intellectual: In any business there are always variations, like defects, errors, and delays. Leaders have to focus on understanding these variations. Are they caused by the system or by the employees? Usually employees are blamed for the errors, but 95% of them are really caused by the company system. Distinguishing the difference between variations by using data and statistical methods, as well as understanding its causes, is key to management’s ability to properly remove barriers to profitability. At company ABC in this case study, leaders were focused on the people, while many delays were due to late approvals, lack of the right tools, and lack of training, which the people (i.e. employees) couldn’t handle.
  3. Physical: Leaders assert opinions as facts based on hunches, theories, or beliefs, but they don’t always test those opinions against the data before making a decision. Leadership needs to focus on contrasting their ideas with real data from the operations. The automotive shop started to use daily physical scorecards on the walls to capture and communicate real performance numbers, so that leaders and operators could act on them together.
  4. Emotional: Finally, in order to get real data from the operations, leaders need to work with their people. The problem is that people perform based on how they feel. They are primarily motivated by intrinsic needs, including respect and working with others to achieve common goals, in contrast to simply being motivated by monetary reward. So leadership has to focus on understanding and respecting people so that they can all work together to solve issues. One of the managers used to push a lot on his employees because his monthly payment was based on performance. When his salary was moved to a flat rate, he started to work much better with his team, they all were motivated and happy at work.  Turnover decreased sharply.

So my “a-ha” moment in regards to strengthening a culture of quality was that leaders need to change their behavior first if they want to change the entire company culture—and they have to do it through a systemic model considering four types of intelligence.

What about your company? How is leadership helping to develop a quality culture?

How to Implement ‘Understanding the Organization and its Context.’

This is a guest post by Allen Gluck, president of ERM31000 Training and Consulting in Spring Valley, NY, and an adjunct professor at Manhattanville School of Business in Purchase, NY. He has a master’s degree in leadership from Bellevue University in Nebraska. Gluck is an ASQ member and a member of the U.S. Technical Advisory Group to ISO Technical Committee 176 (TAG 176), which develops ISO 9001, and TAG 262, which develops ISO 31000. He may be contacted via his website: www.erm31000.com or at allen.gluck@erm31000.com.

 

The ISO 9001:2015 revision is bringing big changes.  This post is designed to assist your organization with the implementation of one of the new requirements: Clause 4.1, “Understanding the Organization and its Context.”

The new requirement reads: “The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction and that affect its ability to achieve the intended result(s) of its quality management system.”

In order to explain how to go about making this determination and clarify the purpose it serves, an introduction is in place.

Although it is not obvious to the casual reader, the new standard alludes to decision-making in three places. The first is a quality principle quoted from ISO 9000:2015, namely “evidence-based decision making.” It is not hard to understand that better decisions are made when they are based on evidence rather than by conjecture.

The second almost surreptitious reference to decision-making is found in Clause 0.1, “Addressing risks and opportunities associated with its context and objectives.” Addressing risks means proactively managing uncertainties. The simple meaning of “managing uncertainties” is that decisions should be made with consideration of the possible positive and negative consequences that the uncertain future may bring.

Finally, in Clause 5.1, entitled Leadership and Commitment, we find a requirement for top management: “Ensuring that the quality policy and quality objectives are established for the quality management system and are compatible with the context and strategic direction of the organization.” Top management’s most basic role is strategic decision-making for the organization.

In essence, all three references require that informed decisions are to be made based on some kind of evidence. Where is this evidence to be found? All the evidence you’ll ever need is available in the context of your organization, whether it be external or internal.

What is the context of an organization? Let’s begin with examples of your internal context. Your company’s vision, mission, strategic objectives and direction, your org chart, SOPs, resources, culture, contractual relationships – these and more, are factors you should consider when making all decisions and when addressing uncertainties about the future.

On the other hand, the legal, social, political, regulatory, financial, economic, key drivers, trends, natural and competitive environment, and perceptions of external stakeholders (or interested parties) are all part of your external context. Each of these factors should be considered in the course of business leadership, when managing risk or uncertainty, and when making decisions that may affect the quality or service you provide.

One of the concerns raised about this new requirement is related to auditing. How can an auditor accurately audit context? What set of requirements does he or she audit against? Furthermore, will an omission from this potentially endless list yield many new non-conformances?

Quality management systems are built on PDCA, also known as the Deming cycle. “Understanding the organization and its context” are part and parcel of this process of continual improvement. As such, it is never complete on the first go-around. Indeed, the new standard states, “The organization shall monitor and review information about these external and internal issues,” which clearly indicates the standard experts’ broad understanding that context is a moving target.

As such, evidence of an ongoing process to establish and understand an organization’s context is absolutely satisfactory to satisfy an audit to these requirements. Only an egregious omission could legitimately be viewed as a non-conformance by an auditor who has trained for proficiency to this standard.

In summary:

  • Quality decisions are no different than any other decisions; uncertainties may help or hinder your objectives.
  • Your best decisions are based on the best available evidence.
  • Most of this evidence which you require is readily available within:

–        your organization’s external and internal context

–        the context and content of your “interested parties”

  • This process is auditable

Thank you to the hard-working men and women of the U.S. Technical Advisory Group to TC 176 for their years of volunteer effort resulting in the new ISO 9001 standard.

Creating a Performance Culture: What Not To Do

This is a guest post by James Lawther, who describes himself as a middle-aged middle-manager. To reach this highly elevated position he has worked for multiple organizations, from supermarkets to tax collectors in a host of operational roles, including running the night shift for a frozen pea packing factory and doing operational research for a credit card company.

Based in the U.K., James is also an ASQ Influential Voice blogger and writes about quality issues at www.squawkpoint.com.


There is a lot of talk about culture.
No doubt you have heard it before but Peter Drucker once said, “Culture eats strategy for breakfast.”  Management gurus fling the word “culture” around with abandon, proclaiming that if you fix your culture it will fix your business.

If they are right, then your culture is worth worrying about.  So what is culture? As a concept it is a little nebulous and vague. I flipped open my laptop and Googled it. Here is the most relevant definition I found:

Culture (noun):  The ideas, customs, and social behavior of a particular people or society.

All of which leads to a question:

How can we manage ideas, customs, and behaviors to improve business performance?  How can we create a “Performance Culture?”
How do you create a performance culture?

Is it possible to manage behaviors and influence performance?

Of course it is.  Children are taught how to manage behavior from an early age.  Toddlers get chocolates if they are good and the “naughty step” or worse if they are bad.  At school the same approach is used.  Teachers give their pupils certificates for being good and detention for being bad.

Business schools reinforce the logic. They teach us that effective management is all about getting people to perform at their best.  The recommended approach involves SMART goals, targets, 360 degree feedback, and incentive systems.  The naughty step has morphed into “spending more time with the family.”

For all the management science it boils down to the same thing; the academics teach us to manage business performance with carrots and sticks.  Targets, bonuses, and performance ranking drive behavior and behavior drives performance.

What sort of behavior do they drive?
They drive a desire to hit the target, an overwhelming desire which manifests itself in a whole host of ways:

1. Jumping up and down on poor performance.
The minute something goes wrong it is corrected.  If a target-driven manager sees any adverse variation in the data (the enlightened call this common cause variation) he wants it explained and removed.  An inordinate amount of time is spent chasing data points that look bad.

Unsurprisingly, data points that look good are celebrated.

2. Challenging management information.
When it becomes clear that it isn’t so easy to explain the cause of poor performance, the logical next step is to challenge the data.  If there isn’t an obvious reason why performance is going the wrong way then the data must be wrong.

Any manager with a bonus (a.k.a. college fees or mortgage repayments) riding on the data will tell you that it needs to be right.

3. Changing the calculations.
Unfortunately challenging the measurement system rarely improves performance. The next approach is to change the calculations instead.  Many targets are ratios: customers served per man-hour or sales made per lead.  So denominators are pushed down and numerators forced up. This approach is guaranteed to improve performance (at least optically).

All it takes is a little brow beating of the measurement improvement team, who will in turn – when performance appears to improve – be applauded for their accuracy.

4. Blaming and shaming.
Sometimes the man in charge of measures is unwilling to be brow beaten.  If he refuses to yield he will be blamed for poor performance (how can you improve performance if you can’t rely on the numbers?) If the man from M.I. is big enough to shrug it off then somebody else is found to blame.  Blame a supplier, blame a customer, blame the person in recruitment, or the purchasing team.

Blame doesn’t improve performance, but it does create an excuse.  It is well-known that poor performance plus excuses equals good performance.

5. Emphasizing the positive.
Managers utilize bullet points to emphasize the positive.  With all the noise in the system there is always something on the up.
•    This week saw a 5 percent rise in sales.
•    Last week customer satisfaction reached an all-time high.
•    Retention rates (month-to-date) exceed last year’s performance (year-on-year) by a full three basis points (allowing for inflation).
If managers can’t find something that looks good they can always create more metrics until they identify something positive.

6. Minimizing the negative.
Nothing is ever reported voluntarily that looks below target or “Red.”  Anybody foolish enough to declare a “Red” level of performance will receive a real grilling about the situation.  This approach ensures that the “Reds” disappear…  Well, they certainly won’t be talked about or shown.

If there is no “Red” to be seen, then performance must have improved.

Does culture drive behavior and performance?
Of course it does. Though perversely “performance management” doesn’t create a culture of high performance. It creates one of low performance and fear.

Maybe Mr. Drucker was right, but his quote needs some context from his peers:

Culture Eats strategy for breakfast ~ Peter Drucker
Drive out fear ~ W. Edwards Deming

The way to create a high performance culture is to seek out poor performance, embrace it and fix it, not punish it.

What are your “dos” and “don’ts” of creating a performance culture?