What is the Most Effective Performance Management Approach?

In an evolving workplace, there is a growing trend suggesting end-of-year performance reviews are no longer effective. To remedy this, some companies have decided to utilize software to improve their process. Other companies have elected to eliminate reviews altogether.

What is the most effective performance management approach?

Sarah Haynes

Performance reviews are often the subject of much scorn and mockery in the corporate world.  In my 15 years of consulting with dozens of clients, I’ve only encountered ONE that actually considered their performance management process to be integral to employee development, and truly valuable to their company.  For the rest, it was a forced exercise that did not appear to be linked to results, aside from bitterness and regret. According to a Deloitte Insights survey, 58% of the companies polled reported that they view their current performance management process as not being an effective use of time and only 8% reported that their process drives high levels of value. Why is this?

Performance reviews are almost always linked to compensation.

Reviewees are motivated to score themselves as highly as possible in order to secure the best possible raise for themselves.  Reviewers (the managers) are pushed by the company to average out the performance rating across all individuals in a given cost center. So, for every employee considered “exceptional”, there must be one considered “underperforming”.  It’s a terrible trade-off, and one that often pits managers against staff. I’ve actually had a boss ask me if I’d be OK with a sub-par rating, because he really needed to give a large raise to my co-worker in order to keep him from quitting.

In order to make performance reviews effective, the direct link between reviews and compensation must be broken.  This is the only way to create an environment for an honest conversation, where employees do not have to feel like they’re fighting for dollars and cents.  Secondly, managers should be coached on how to provide effective feedback to employees.  It’s not easy, and many managers will do anything to avoid an awkward conversation.  Lastly, performance feedback should be provided on a regular basis, at least once per quarter.  If you wait until the end of year to provide feedback on annual objectives, it’s way too late to correct course.

Only one of my bosses throughout my career actually cared enough to provide me with constructive feedback, during performance reviews, that I could use to improve my performance.  I truly valued the insightful feedback he provided. Of the others, some were not involved enough with my work to be able to provide feedback, and the rest – well, I guess they just didn’t want to get into it.  I know I would have appreciated it and felt more valued as an employee, if they had.

James Lawther

Fortunately, I am a deeply experienced manager with a track record of motivating and developing difficult employees.  I know exactly how to create a team of world-class employees with outstanding engagement scores. So learning from the workplace I have put in place an annual performance review at home.

I love my wife very much, she is funny, clever, tolerant and — if I say so myself — very pretty.  But when it comes down to domestic chores there are a few things she really could do better at, things that would dramatically improve her output and also increase her sense of work life balance.

It was important that I did this properly, I spent many hours researching my wife’s performance and crafting a review.  My relationship is important to me, so I have done it by the book, I:

  • Sought out 360 degree feedback, consulting neighbours and children
  • Made sure the evidence I used was specific and to the point
  • Catalogued her strengths (of which there are many) first
  • Captured a few clear weaknesses development areas for her to work on

Her review reads like this:

Annual Performance Appraisal 
Manager: James Lawther 
Employee: Christine Lawther 
Role: Wife

Key Skills and Competencies

1. Focus on Results: Below Average

Strength – Action focus: Proven capability to cook amazing meals during visits from your parents. B. this strength could be leveraged by cooking amazing meals when your parents are not visiting.

Development – Attention to Detail: On 3 separate occasions in the last week I have had to empty the washing machine and load the tumble dryer. This is a task for which I am not responsible as it is contained within your job description (wife).

Development – Completing and Finishing: Constantly distracted by fighting children whilst trying to complete simple jobs e.g. ironing. You need to develop your multitasking ability.

2. Influencing Ability: Good

Strength – Presentation: Very good at assuring me of the business case behind an investment in an expensive skiing holiday

Development – Influencing Junior Staff: Repeatedly have to shout at children in an effort to get them out of the house in time to get to school. This is a particular problem with the 15-year-old daughter.

3. Communication Skills: Below Average

Strength – Feedback: Ability to provide strong and timely feedback to me about my personal habits, specifically in relation to nocturnal activity and time keeping. N.B. there is a risk that this strength could become overplayed.

Development – Instruction: Your map reading ability is less than perfect. We have repeatedly found ourselves lost in large cities because of your inability to communicate clearly and concisely.  Unfortunately last year’s investment in satellite navigation technology this has not improved performance.

Overall Rating: Below Standard

The Performance Conversation

The meeting I arranged with my wife to discuss her performance didn’t go nearly as well as I had hoped.  My wife was withdrawn and I don’t believe she was really listening.  She was very focused on the overall rating and we didn’t have a value adding

conversation about the developmental feedback I had collated.   My “active listening techniques” fell on deaf ears.  Her demeanor was downright chilly until we discussed her annual pay rise.  Then she warmed up quite dramatically.

Pay for Performance

I’m a big believer in linking performance appraisals to performance pay, nothing focuses attention in quite the same way as money.  As I want my wife to be motivated to improve she needs to understand the consequences of poor performance.  As evidenced in her appraisal her performance was below standard, so I had little choice but to hold her house keeping money at a constant level.  If I had increased it I would have been accused of favoritism.

When I explained this to her, my wife had the audacity to suggest that many of the things I discussed were outside of her control.  She then become quite defensive and told me that I was equally accountable for household performance.

A Waste of Time

I won’t try another appraisal round next year.  My wife wasn’t remotely grateful for all the time and effort I put into it.  Instead I think we might just have a chat every now and then about the children.  It might be more productive.

A Simple Question

If performance appraisals go badly at home, why on earth do we think they will go well at work?

Ted Hessing

The Science of Encouraging High Performance

We humans are funny creatures. We don’t always act in our own best self-interest. And when we get into groups we don’t always make better decisions. Sometimes we build entire organizational practices that are nonsensical, counterproductiveanachronistic, and/or that we ourselves would not want to be subject to. Case in Point; Performance Management.

let’s take a user perspective rather than a managerial perspective. After all, they should be the same thing, right? It’s always a good idea to start with the client in mind and, under this perspective, the contributors we are seeking to encourage to high performance would be our clients. This perspective can be best understood by the concepts of Servant Leadership. Here’s an overview of servant leadership if this term is new to you.

What’s My Motivation?

Most performance management techniques revolve around 2 axis; rewards or penalties. On the rewards side we can call it salary, bonus, compensation, or whatever. But generally people are incentivized to high productivity via rewards. The flip side are penalties which could range from reduction or absence of rewards to reduced or eliminated security, status, and stability.

But is that carrot and stick approach the best system to use? Turns out the science says ‘no.’

Autonomy, Mastery, and Purpose

In Daniel Pinks excellent book Drive: the Surprising Truth About What Motivates Us (and eponymous TED Talks), he reveals that the research say unequivocally no. Rather than re-state Pink’s message (see above 10 min video for a great overview); Rewards don’t work the way you’d expect them to.

It turns out that after a certain amount of compensation, rewards are actually counter-productive in terms of increasing performance in any endeavor requiring a modicum of cognitive skill. After that magic level of compensation, people require other attributes to be present in order to Got that?

In other words, if you want higher performance, you have to pay people enough where they aren’t worried about money but then you have to enable 3 other key attributes; autonomy, mastery, and purpose.

Thus,the overwhelmingly most popular way of incentivizing performance, reward vs penalty, is wrong. if you want to maximize performance, it turns out that you must optimize for motivation.

So, how does one do that? What’s the right way to handle performance management? If rewards are wrong (or at least only part of the story), then it seems we’d best change our performance management process to the other key factors Pink identifies; Autonomy, Mastery, and Purpose.

Let’s take each one step by step.

Purpose

Per Pink, Purpose is each team member being able to say  “I know why I am here and what I contribute with (as an individual or as a team)” How do we maximize a sense of purpose? So, as managers with a strong background in quality and strategic deployment techniques seeking to maximize performance, how do we maximize a sense of purpose?

I like Simon Sinek’s approach of ‘Start with the Why. Again, if you haven’t seen this Ted talk, you’re missing out.

To my mind, conveying Why is all about alignment. Alignment between the strategic direction of the company and the front-line personnel executing the vision. Some techniques quality leaders can use that we can use to achieve, communicate and measure that alignment are:

If we want to maximize performance management, it behooves us to make the alignment of why behind what people are being asked to do explicitly clear.

Often, when we make that alignment clear we find that much of the resources of time, talent, and energy that people are currently expending

are in pursuit of things that don’t matter or don’t matter as much as other goals they could be working towards. And that is clearly a waste.

Mastery

If the next attribute in results is Mastery, then it makes sense to incorporate this into our performance management techniques. How can we best help people pursue and achieve mastery of their professions?

Some tools we can use to monitor and maximize mastery are visual management principles and gauge R&R techniques. Perhaps the two that I like best are Skill Matrix boards – an excellent

visual management of team skill mastery and credibility as described by Ray Dalio in Principles. However, there are countless adaptations of each that we can apply to skill acquisition.

Also, it is helpful to recognize that every member of a company has a profession (what they do) and an industry they perform it in (where they do it.) It makes sense from a performance management standpoint to help contributors to develop a strong understanding of both the skills and context for their role and their industry at large. T shaped employee management is an excellent framework for this/

Autonomy

Now that we’ve addressed how to manage clear alignment and skill acquisition – the why’s and what’s of a role – let’s move on the how’s.

Again Pink helped us by illustrating how autonomy and empowerment are crucial pieces of the performance management puzzle. And we helped ourselves by showing the alignment of the highest strategic goals of the company

Now, autonomy is scary for many managers. To overcome this hurdle we could use a ‘trust but verify’ model of cascading dashboards and assigning responsible parties for work streams. And the autocratic manager will be happy with this. But autocratic leadership has it’s limits.

Sources: Business Case Studies and Cleverism

Perhaps the best way to encourage autonomy to meet our desired performance management goals is to favor the empowerment of a Team of Teams model such as the ones favored by General Stanley McChrystal (and others) in his book Team of Teams.

Autonomy is best served by employee empowerment. There is a link between employee desire to participate on autonomous teams and having a significant sense of ownership in team outcomes. Simply put, members of autonomous teams desire the ability to make decisions in an entrepreneurial climate without too much managerial interference. And arguably employee empowerment is best achieved through managers leading by illustrating a clear vision and then getting out of their way.

 Bringing it All Together

As leaders it is important for us to recognize that performance management is itself a process. It’s subject to an equation Y=f(x) where f(x) is often more complex than we think. But fortunately, like any other process, it can be measured, faults found, and hypotheses tried, tested, and improved upon.

Luciana Paulise 

The current performance appraisal methods have been hardly criticized in the last years, especially in the era of agile companies and continuous innovation. In the following article we will share some ideas and tips on how to adapt to your specific company culture.

Performance appraisals are the most common performance measurement strategy. A performance appraisal is a systematic and periodic process that assesses an individual employee’s job performance in relation to certain objectives.

Neverthless, several studies have been showing that the effectiveness of the current methods is not clear, as employee’s habits and company cultures have been changing and need different incentives to work better.
What are the main cons of a performance appraisal?

Frequency: Performance appraisals are usually done annually or quarterly. The frequency of feedback should not be defined by a standard, should be defined based n the specific need of the employee and his/her supervisor. Periodic evaluations usually generate more frustration that satisfaction to the employees because as it’s based on past performance and it’s general, it doesn’t help to actually change behaviors in the future. Millennials expect continuous feedback on each situation that helps them improve performance on the near future.

Specificity: appraisals tend to be general as they are the only opportunity throughout the year to formally discuss how we are doing. Clearly many items cannot be discussed, so supervisors tend to choose only a couple of hot topics, very good or very bad based on the general evaluation. So they really don’t tackle specific strategies for improvement, but simply try to confirm what we already know: we are in the top 10 percent, or just out of it. So 90% of the employees just get frustrated, while the other 10% get anxious about keeping the top for themselves on the next review.

All the employees have the appraisals at the same time, so instead of a real opportunity to improve, it becomes another item on the supervisors To Do lists, which they have to do as quick and neat as possible. While for the employee, it may be the opportunity they have been waiting to showcase their results or received some praise for their work.

A performance appraisal is usually focused on individuals, without considering the system or the team. Agile organizations are more prone to work in teams, so individual measurement may be counterproductive. It may impact team collaboration and promote competition instead, to achieve the individual results agreed in the individual discussion.
Subjectivity: No matter how well defined the dimensions for appraising performance on quantitative goals are, judgments on performance are usually subjective.

There are always winners and losers: When salary increases are allocated on the basis of a curve of normal distribution, which is in turn based on a rating of results rather than on behavior, competent employees may not only be denied increases but may also become demotivated. Performance appraisals turn to be unfair trying to fit everyone in the bell curve.

New strategies to have a successful performance appraisal
As peter Scholtes says in Total Quality or Performance Appraisal: Choose One, “Improvement efforts should focus on systems, processes, and methods, not on individual workers. Those efforts that focus on improving the attentiveness, carefulness, speed, etc., of individual workers — without changing the systems, processes, and methods — constitute a low-yield strategy with negligible short-term results”.

Continuous feedback

Annual performance appraisals are pretty standardized, not very much open to discussion and done only once a year. They are usually time-consuming and generate a stressful situation supervisor-employee, so doing it just once a year “looks great”. But real coaching for behavioral change should be short, continuous and spread throughout the year based on the need. It can be positive or negative, but for sure it should be based on recent situations that allow the employee to take action immediately. Innovative companies should count on that to be able to adapt quickly to the changes in the environment.

Leadership training

Many leaders say they don’t have the time in this high-pressure economy for the tedious work of teaching people and helping them grow. On the opposite, the one main task for leaders should be to facilitate their employee’s growth, and there should be no specific time for it, should be part of their day-to-day. Leaders tend to have a lot of work when they have an over dependent team. become demotivated work should not be done by them even if they can do it better, they should help their people to learn and do it better, that is their job. Leaders should be trained to develop habits that make their team owner of the tasks, autonomous and therefore more engaged. RECOMMENDED COURSE: Leadership

Fact-based

Continuous feedback doesn’t need to be based just on impressions or feelings, it can also be based on facts and data. Depending on the type of operation, leaders can use different tools to help employees ask for help or solve problems on the go, instead of hiding issue to avoid bad appraisals. Manufacturing companies can use run charts and graphics to evaluate trends and identify issues. Charts can show if the issues are systemic (all the lines are having delays due to inadequate maintenance) or individual (an employee is not well trained). In some companies, we suggest to do monthly audits with scores and detail action plans, to provide not only a fact-based measure but also a means to improve.

On demand

The best way to provide feedback is making sure the employee knows it before the supervisor, and before it’s too late. Timely feedback can be done when the information and the performance are online and accessible to everyone involved. Measures can be done by the employee himself, or through IT. For example, online retail agencies can provide to employees with online information about customer satisfaction, delays or errors so that employees can adjust the service accordingly. Many companies have 5 stand-up minutes to talk about issues and potential solutions.

Win-win

Performance measurement should be a tool to improve the team and organizational performance, not to blame employees or justify layoffs. It should help to know why a process is failing and what can we do about it, no matter who. So every measurement should not be used along with a root cause analysis and follow-up method.

Feedback at the gemba

A performance appraisal tends to be so formal that is never done on the work floor but inside an office or meeting room. As it is not the normal workplace for the employee, it can be more stressful. If it is done on the workshop, it allows for a more direct discussion. It allows for a psychological safety for the employee, which promotes more innovation and reduces the sense of failure. You can even find more solutions on the floor than in a meeting room or a cold management report. As Edwards Deming would say, successful companies must also manage what cannot be measured (the data-invisible elements).

A performance appraisal or any type of measurement is not bad per se, what matters is what you do with them. Good luck!!

Robert Mitchell

As a Baldrige Examiner, I like to begin my roundtable discussions with a review of the Baldrige Criteria. Category 5 of the Criteria focuses on the Workforce. The Workforce category asks how the organization assesses Workforce Capability and Capacity needs and builds a workforce environment conducive to Engagement and High Performance. The Baldrige Criteria defines High Performance as ever-higher levels of overall organizational and individual performance, including quality, productivity, innovation rate and cycle time.

High performance results in improved service and value for customers and other stakeholders. High performance stems from and enhances workforce engagement. Some characteristics about workforce high performance:

  • It involves cooperation between management and the workforce; cooperation among work groups and teams; empowerment of employees and building personal accountability.
  • It may involve learning to build individual and organizational skills; creating flexible job design; decentralized decision making and making decisions closest to the front line.

My career experience, and observations of applicants to state and national quality programs using the Baldrige Criteria has revealed six key processes necessary to effectively encourage high performance:

  1. A Formal on-boarding as part of the New Employee Orientation process
  2. Providing immediate, open and honest feedback
  3. Regular, periodic “pulse” surveys to measure employee satisfaction and engagement
  4. Frank, two-way skip-level meetings between management and its people
  5. A Career Pathing process to manage employee progression
  6. A Learning & Development System that supports organizational needs and employee development
  7. Systems & Structures supporting compensation, benefits and policies, rewards, recognition, as well as incentives to encourage continuous improvement, intelligent risk-taking, innovation and customer focus.

For more information about these key business and workforce processes, I highly recommend learning about the Baldrige Excellence Framework and attending Baldrige Evaluator training.

Apply Design Thinking to Quality Practices

 

More and more organizations are using design thinking to assess business concerns, discover creative solutions, and to establish market opportunities. As this strategy gains more traction ASQ asks:

How can design thinking be integrated with, and applied to quality practices?   

 

Prem Ranganath: The Art of Quality

Design Thinking is an opportunity to humanize quality and continuous improvement

Background: Design Thinking is a collection of methods and mindset that evolved at Stanford University and has now entered the mainstream in almost every industry. While the design thinking stages and methods might appear to be a framework, the essence of design thinking is the focus on ‘empathy’ and ‘experimentation’ to design innovative, meaningful and people focused solutions.

Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.

-Tim Brown, CEO OF IDEO

Design Thinking for Quality Practitioners:

There is no dearth of frameworks, toolkits and methodologies for quality management and continuous improvement. For example, a methodology like DMAIC (Define, Measure, Analyze, Improve, Control) provides a structured set of methods for continuous improvement along with a set of problem-solving tools and techniques for each stage in the methodology. DMAIC provides an opportunity to assess the current state using quantitative methods and prioritize problems/ opportunities for which solutions have to be implemented.

Metrics to qualify the current state and for measuring effectiveness of the solutions implemented are typically tagged to business objectives which ensures that employees understand the alignment between improvement initiatives and the potential impact of outcomes on business objectives.

If we use the Visual-01 (below) from IDEO as a reference, traditionally quality and continuous improvement initiatives are largely driven by viability and feasibility considerations. Integrating design thinking with improvement initiatives brings the ‘human’ element into focus, by driving conversation on ‘desirability’ of the solutions being proposed for implementation.

Visual-01: Dimensions of Design Thinking (source: IDEO)

Innovation Dimensions

When desirability is considered alongside viability and feasibility on quality and continuous improvement projects, it significantly improves change management and adoption. This approach also significantly increases the odds of institutionalizing and sustaining changes and ensures the effectiveness of the changes. Use of empathy as a facet to characterize current state brings more focus on the users (internal or external customers). Applying empathy alongside prototyping to evaluate alternate solution options for the future state improves engagement from the user community and will have a positive impact on the pace and extent of adoption. An informed and engaged user is more likely to be a champion for the solutions being implemented. The combination of traditional metrics and qualitative data supporting the desirability dimension can provide a new perspective for prioritizing and driving improvements.

Visual-02: Integrating Design Thinking with DMAIC

Integrating Design Thinking with DMAICVisual-02 shows the integration of a Design Thinking flow represented by the steps Empathize, Define, Ideate, Prototype and Test with the DMAIC approach for continuous improvement. Integration of design thinking methods to adopt a humanized approach to characterizing (challenges and opportunities) current state. On similar lines, engaging internal and external customers to experiment and improve in a culture of play can lead to solutions that are desired by the user community and enable the quality practitioners ability to sustain and scale the improvements.

I have used the design thinking approach and methods on large transformation initiatives and during Kaizen events and I have seen significant impact on participants’ enthusiasm and engagement. The ability to empathize and experiment puts a human face to quality and process improvements and I would highly recommend design thinking to quality practitioners. I look forward to hearing from my peers on their experience with design thinking.

 

Robert Mitchell: Quality Matters 

Use Design Thinking to Innovate Your Quality Improvement Journey

Design Thinking is a strategy-making process that focuses on customer behaviors rather than opinion (aka tribal knowledge) and market research.

There is a lot of press lately about Design Thinking concepts, applications and examples in the development of new products and opening new markets. Design Thinking was popularized by David M. Kelley and Tim Brown of IDEO and Roger Martin of the Rotman School. A very good, short video on the topic was recently published by the Harvard Business Review blog . For a more detailed explanation please read the paper, “Design for Action” written by Brown and Martin.

Design Thinking process:

Design Thinking Process
From a paper recently published by Creativity At Work, “Design Thinking is a methodology used by designers to solve complex problems, and find desirable solutions for clients. A design mindset is not problem-focused, it’s solution focused and action oriented towards creating a preferred future. Design Thinking draws upon logic, imagination, intuition, and systemic reasoning, to explore possibilities of what could be—and to create desired outcomes that benefit the end user (the customer)”.

So how might Design Thinking be applied to your Quality improvement frameworks and roadmaps? The three major stages of Design Thinking are:

  1. Observe customer behavior; define unarticulated needs
  2. Ideate, Prototype, experiment and test
  3. Bring the new concept to life; open new markets

What differentiates Design Thinking from traditional Voice of Customer collection approaches is the emphasis placed on observation of behaviors rather than relying on customers’ input to satisfaction surveys. Survey responses tend to validate Expected Quality and rarely reveal Exciting Quality opportunities (see “Kano Model”). In this way, Design Thinking is similar to Focus Panels and “Be the Customer” methods to better understand unarticulated customer needs. It is at this stage of Design Thinking that the Quality practitioner has the unique opportunity to innovate through the introduction and incorporation of Journey Mapping to document customer experiences throughout the value chain of the producer-customer relationship, from product awareness to purchase and after-sale touchpoints.

An example of customer journey map:

Customer Journey Layers

The stages in Design Thinking around Ideation and Prototyping should look very similar to your existing Product Development and Commercialization processes. Many such approaches use a stage-gate model to prototype, test, and refine product design to evaluate customer acceptance and verify production cost estimates. Quality’s role in this stage should be to coach and consult in the proper use of experimental design to minimize experimentation costs and identify potentially important interactions of inputs and process variables to optimize performance of customer needs.

Another unique opportunity in the Design Thinking process for the Quality professional is in the final stage of bringing the new concept to life. With the help of social media the properly trained Quality professional can analyze customer / consumer feedback to validate areas of satisfaction and dissatisfaction, focusing on opportunities to build loyalty and engagement.

One can debate whether Design Thinking is really all that new or novel an approach to the value creation process. Design Thinking reinforces the power of understanding customer behaviors and unarticulated needs to deliver Exciting, innovative new product and service offerings for improved customer satisfaction and engagement… and potentially opening whole new markets. Per Linda Naiman (Creativity at Work), “Design Thinking minimizes the uncertainty and risk of innovation by engaging customers or users through a series of prototypes to learn, test and refine concepts”. The Quality professional might also consider how Design Thinking and Journey Mapping can help him/her to innovate their professional services portfolio for increased customer satisfaction in teaching, coaching and consulting outcomes.

“The best way to predict the future is to create it” – Peter Drucker

 

Luciana Paulise: Biztorming

What is Design thinking

Design thinking is a systematic and collaborative creative problem solving approach focusing on customer needs, getting information by direct observation, and testing it in a disciplined way. Similar to the Lean startup approach, the key is to fail fast and fail often. Even Toyota production system promotes investigating as many alternatives as possible, to find the very best solution, and always urge to propose ideas and fail as fast as possible.

The three main stages

1) Invent the future: With design thinking you should imagine what could be, in the ideal world, with limitless boundaries. You need to think what your customer may want but don’t know. The way to do that is by “Camping out” with your customers, like Home depot does. They talk to customers, ask how their experience was, ask questions like “did you find what you expected, what about the price, was it easy to find?” Sometimes a customer just want something fast, meaning buying a product in your website in just three clicks. That is what you need to discover through observation, what is “unstated”. Customer know they want to Get from a to b, but don’t know how. You need to find out the best way by immersing in their lives, observing and asking questions.

Ideas for product changes may be related to new products, pricing or new store displays.

2) Test ideas. You can do Mindmapping to write down ideas after observation, and then test those ideas. Do first individually, and then test it with your team mates or even with your customers. Remember, don’t judge, simply think and write down.

Once you have your ideas mapped, you need to conduct experiments to test the ideas in the real world. You can also test new processes that maybe faster, easier or

Use cheap materials, or partial solutions or Rapid prototyping tools. It does’t have to look perfect at first. The idea is to go fast, to be able to adjust fast.

3) Bring the new product to life. Identify resources and activities to implement the new ideas. Plan how to produce, distribute and sell the product or how to change the process.

Some Case studies

Design thinking can be used in any type of industry. A health provider for example used it to re-engineer nursing-staff shift changes. Close observation of actual shift changes, combined with brainstorming and rapid prototyping, produced new procedures that radically streamlined information exchange between shifts. The result was more time for nursing, better-informed patient care, and a happier nursing staff.

The Innova School System, for example, with 23 schools thus far, is applying design thinking across its platform, from how the classrooms are built to the curriculum. and the UK’s Design Policy Unit  as described in Tim Browns’s first article on Design Thinking for HBR.

Samsung Electronics manufactured inexpensive, imitative electronics for other companies. Its engineers built products to meet prescribed price and performance requirements. In a company that emphasized efficiency and engineering rigor, the designers had little status or influence. Then, in 1996, Lee Kun-Hee, the chairman of Samsung Group, frustrated by the company’s lack of innovation decided that in order to become a top brand, Samsung needed expertise in design, and set out to create a design-focused culture that would support world-class innovation. It took a long way until getting everyone in the company on-board, but they finally made it. Now Samsung innovation process begins with research conducted by multidisciplinary teams of designers, engineers, marketers, ethnographers, musicians, and writers who search for users’ unmet needs and identify cultural, technological, and economic trends. Design thinking for them means three major things: empathy, visualization, and experimentation in the marketplace.

Tech companies are using quality tools to organize their innovation cycles, likewise automotive, manufacturing, or even consulting industries more focused on standardization should start using quality together with design thinking so as to get a disciplined empathetic approach to customer requirements.

Are you ready?

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?

September Roundup: What's the Best Approach to Strategy?

Do you have a preferred way to approach challenges and opportunities? If so, you have a strategy.  In September, ASQ’s bloggers wrote about their approach to strategy after ASQ CEO Bill Troy shared his.

Approaches and methodologies: Tim McMahon approaches strategy with Hoshin Kanri, the process to select annual objectives that will give the organization the greatest possible advantage.

Nicole Radziwill developed a strategy called EASE, which stands for Expectations, Actionability, Sustainability, and Evaluation. Manu Vora discusses balanced scorecards, SWAT, and Hoshin. Lotto Lai wrote about Motorola’s Six Steps to Six Sigma deployment when developing a strategy for the Hong Kong Society for Quality.  Rajan Thiyagarajan uses a balanced scorecard approach to develop strategy. Bob Mitchell writes about strategies deployed by ASQ’s Statistics Division and the ASQ Minnesota section. Edwin Garro champions continuous improvement as part of strategy.

Implementing strategy: Unfortunately, there is  little focus on building the capability of the organization to execute strategy, writes John Hunter.  Similarly, Scott Rutherford discussed whether your strategic plan can survive when it first contacts reality.

Other Views: Jennifer Stepniowski writes about strategy in her personal and professional life.  And Dan Zrymiak explains how to use mission, mobilization, and governance to deploy strategy.