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:
- 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.
- 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.
- 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.
- 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?