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?

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?

A Leader’s Roadmap to a Culture of Quality: Building on Forbes Insights-ASQ Leadership Research: Part 2 of 3

This is a guest post by Rob Lawton, an author, executive coach, and expert in creating rapid strategic alignment between enterprise objectives and customer priorities. He has directed strategic and operational improvement initiatives since 1985. Lawton coined the term “customer-centered culture” with his first book, Creating a Customer-Centered Culture: Leadership in Quality, Innovation and Speed (ASQ Quality Press, 1993). He has been published in Brazil, China, the U.K., and is referenced widely. Many of his articles are available at www.imtc3.com. Contact him at Robin.Lawton@icloud.com.

The Forbes Insights-ASQ white paper published in fall of 2014 distills several guidelines from interviewees that can be especially useful with more detail. My purpose in this three part blog series is to provide details and references to the missing specifics for successful action.

Part 1 in this blog series addressed the first of three research findings on what leaders must do to create a quality culture:
1.    All employees must apply the four key elements of any strategy for building a quality culture.  (Page 8: Boeing’s Ken Shead).
2.    Closely understand customer expectations so you can focus and give them what they want.  Study respondents overwhelmingly report low effectiveness by their organizations in doing so.  (Page 16: Intel’s Stan Miller and Rudy Hacker)
3.    Develop a formal quality policy, common language and leader behaviors as deployment mechanisms. (Pages 18-19, HP’s Rodney Donaville)

Part Two in this blog series spells out how to successfully address point #2, above.

CLOSELY UNDERSTAND CUSTOMER EXPECTATIONS

“Duh! Well, of course!” would be the expected response by many leaders and quality practitioners to this exhortation.  The intent to understand what customers want is easily agreed with but not well executed.

Most culture change leaders do not have the time, patience or inclination sufficient to adequately understand and apply the many quality methods and tools available.  Abundance, complexity and competing priorities abound.  The voice of the customer (VOC), customer experience, QFD and other labels refer to organized ways of uncovering and satisfying what customers want.  They’re all valuable but not necessarily easy to apply or relevant to every organizational setting.  Unfortunately, the vast majority of information is aimed at widget-making enterprises.  Only 13% of us personally make widgets so we need another way.

There are two practical and easy-to-apply versions of the cultural transformation roadmap. For those leaders who prefer text and a step-by step recipe, follow the path of answers to questions 1-8 covered in the first blog in this series.  For those of us who like pictures, think in terms of relationships and systems, like a reference that applies to every aspect of excellence in every context, and want to be able to point to “we are here,” use the 8 Dimensions of Excellence  graphic below (more on this graphic).


A culture of quality must address all eight topics labeled in this graphic.  Attacking the Dimensions in the sequence shown by the numbers works best.  Traditional quality management practices put especially heavy emphasis on Dimension 8.  In fact, most initiative names (lean, Six Sigma, activity-based costing, business process improvement, etc.) explicitly work on processes to benefit the producer.  Dimension 4, the customer’s process for acquiring and using the product, generally gets far less attention.

Leaders who have defined and measured Dimensions 1-4, in that order, have effectively uncovered the VOC.  That defines the target to hit; it is what quality or excellence means to customers.  The mechanics of doing this in any context is described with some detail in “Voice of the Customer In a Widget-free World.”

An easy way to test whether what we have said we value is actually valued is to examine what gets measured regarding each of the 8 Dimensions.  Most healthcare organizations will admit that their customers (patients, let’s say) want to achieve, above all else,  “good health.”  This is the voice of the customer for Dimension 1, their ultimate desired outcome, and should not come as a surprise.  Yet the vast majority of healthcare providers have no written definition for good health (though the World Health Organization has had one since 1948), has no measure for it, and no numerical goals for improvement.  Other than that, everything is wonderful.

Happily, there will be many measures for other things, mostly regarding operations and compliance, but the most important customer outcome is not defined, measured or linked to compensation or performance reviews (but volume, cycle time and cost are).  Customer surveys ask many questions (on courtesy, cleanliness, wait times) but few to none regarding the good health outcome (not to be confused with the clinical outcome).  We assume high scores indicate satisfaction, but we have carefully chosen which questions to ask and which to avoid.  The power of customers is therefore diminished and staff behavior is not linked to what the strategic plan intends.

You can fix this situation by using the 8 Dimensions framework with the steps outlined in the article referenced above. You will have a practical sense for what it takes to “closely understand customer expectations.”

The third blog in this series will outline the specifics of taking action on the third major research finding: Develop policy, common language and leader behaviors for deployment.