Q8 IM09 Final

CHAPTER 9
Leading, Building, and Sustaining

Performance Excellence
Teaching Notes
The keys to attaining an in-depth understanding of total quality organizations as integrated
systems are to have basic knowledge of organizing principles and organizational cultures and to
develop and use a sustainable model for performance excellence such as the Baldrige criteria as a
foundation for quality organization and continuous improvement. Building and sustaining a TQ
organization requires leadership as the "driver" for an effective TQ systems, a readiness for
change, the adoption of sound practices and implementation strategies, and effective organization.
An understanding of basic leadership concepts and their importance is vital for managers and
workers at every level in a TQ focused organization. Integrated systems have become more
important in organizations that aspire to high quality levels, and organizational leaders must
understand how to "deploy" plans and quality efforts throughout the organization.
This chapter focuses on the leadership, corporate culture, and integration of concepts developed
throughout the text. This organizing focus is one that students may find easier to grasp than the
cost of quality or even planning for quality. However, you should point out that the "safe" concept
of organizations is rapidly changing, as organizations and individuals are shaken out of their
complacency by events that surround them today. The strict hierarchy of the conventional
organizational "pyramid" is giving way to a "matrix" or process focused organization, selfmanaged teams, massive part-time employment, and economic and technological dislocations.
Numerous attempts to align the corporate culture with the total quality management, global
marketplace, and "lean and mean" concepts, not all of which have been resounding successes,
have brought us into the 21st Century. Key objectives are:
To define leadership as the ability to positively influence people and systems under ones
authority to have a meaningful impact and achieve important results. Leaders create clear
and visible quality values and integrate these into the organization's strategy and structure.
To emphasize that building and sustaining performance excellence requires effective

leadership, a commitment to change and long-term sustainability, the adoption of sound
practices and implementation strategies, and continual organizational learning. To sustain
performance excellence demands continual learning and adaption to the changing global
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Leading, Building, and Sustaining Performance Excellence
business landscape. An important element of sustainability is ensuring future leadership;

thus the development of future leaders and a formal succession plan are vital.
To define Sustainability as an organizations ability to address current needs and have the
agility and management skills and structure to prepare successfully for the future,
including preparedness for emergencies.
To learn that the six key leadership competencies are: navigator, communicator, mentor,
learner, builder, and motivator. The competencies depend on a collection of personal
leadership characteristics: accountability, courage, humility, integrity, creativity,
perseverance, and well-being. They are reflected in the Leadership category of the
Baldrige criteria.
To study the leadership system and how leadership is exercised, formally and informally,
throughout an organization. These elements include how key decisions are made,
communicated, and carried out at all levels. The leadership system includes structures and
mechanisms for decision making, selection and development of leaders and managers, and
reinforcement of values, directions, and performance expectations.
To investigate the contemporary and emerging leadership theories include situational

leadership, transactional leadership theory, transformational leadership theory, substitutes
for leadership theory, and emotional intelligence theory. The purpose of leadership theories
is to explain differences in leadership styles and contexts. They can provide guidance to
senior leaders in pursuing performance excellence.
To realize that an important aspect of an organizations leadership is governance the

system of management and controls exercised in the stewardship of an organization and
corporate social responsibility (CSR). Governance processes may include approving
strategic direction, monitoring and evaluating CEO performance, succession planning,
financial auditing, executive compensation, disclosure, and shareholder reporting. CSR
relates to responsibility to the public through the practices of good citizenship and includes
ethics, aspects of corporate governance, and protection of public health, safety, and the
environment. Corporate social responsibility has become a strategic imperative and a
competitive or marketplace necessity.
To show that organizations adopt TQ to react to competitive threats or take advantage of

perceived opportunities, however, threats are the most effective in providing an incentive
to act and change the organizations culture.
To develop understanding of the need for commitment from organizations senior

leadership that is critical to success, but is not easy. It requires aligning objectives with the
goals of senior leaders and stakeholders, using quantitative arguments, developing
sympathetic allies, and getting early wins.
To point out the importance of corporate culture -- defined as an organizations value

system and its collection of guiding principles -- how it and quality are impacted by
organization structure, and vice versa, and to enhance the understanding that corporate
culture must change in order for TQ to take root and grow.
To suggest that the Core Values and Concepts from the Baldrige Criteria are a useful
summary of the culture that defines a TQ organization.
To stress the idea that best practices are those that are recognized by the business
community to lead to successful performance. Some best practices are universal
including cycle-time analysis, process value analysis, process simplification, strategic
planning, and formal supplier certification programs. Others depend on a companys level
of performance. For instance, low performers must stick to basics such as process
simplification, training, and teamwork, while high performers can benefit from
benchmarking world-class organizations and using more advanced approaches.
To understand the multiple approaches to designing an effective organizational

infrastructure, overcoming barriers to successful implementation, and developing and
using self-assessment to determine the level of performance and best practices required at
various stages for building and sustaining quality efforts.
To emphasize that all employees play a role in TQ implementation from senior manager,
who lead and provide resources, to middle managers who act as change agents and assure
that goals are met, to the workforce that must take personal responsibility for making
things happen, to unions that must work for the welfare of their members, while also
working cooperatively with management.
To introduce the concept of self-assessment the holistic evaluation of processes and

performance that provides a starting point to build a quality organization by identifying
both strengths and opportunities for improvement, and creating a basis for evolving
toward higher levels of performance. A major objective is the improvement of
organizational processes based on opportunities identified by the evaluation. The Baldrige
criteria provide the most comprehensive instrument for self-assessment of organizational
quality and management practices.
To raise awareness of the fact that quality is a never-ending journey that must be built on
knowledge management, organization learning and adaptation to an ever-changing
environment, and continuous improvement. Organizations can take many routes to
performance excellence, but none of them represents the one best way. Organizational
learning can be built into Baldrige, ISO, or Six Sigma approaches to quality improvement.
Whatever approach an organization takes whether it is ISO 9000, Baldrige, Six Sigma,
or some other approach or combination the approach should make sense and work in the
organization.
Leadership Changes at Alcoa

1. From a strategic management standpoint, it is difficult to speculate on why corporate
management did not take definitive action for five years at the Addy plant. However, various
theories might be put forth. These might be termed the stay-the-course, insufficient measures,
and the maintaining market presence strategies.
First, the company had invested in innovative structuring that had caused the plant to become a
showcase. At first, this approach seemed to have worked well. However, systems (human and
technical) which are not maintained and improved tend to deteriorate. The company may have felt
that it would lose face as a forward-thinking innovative firm if it closed down the showplace
facility and admitted defeat.
Second, partially because of the innovative structure there may not have been sufficient measures
to track the components of cost, quality, and productivity. If those are not in place, it takes quite a
lot of effort to begin to build information systems and learn how to use them to impact
profitability.
Finally, the company may have received a good return on the original investment, which could
essentially have been written off in accounting terms. Therefore, the only costs that had to be
covered would be the variable costs of running the plant. If it would useful to present a full line of
products to customers, the plant could continue to operate, while not being profitable based on
total fixed, variable, and overhead costs.
2. Simonic seemed to use a mix of transformational and transactional leadership styles. The CEOs
and executive team members of nearly every Malcolm Baldrige Award recipient have generally
modeled this leadership behavior, and some empirical evidence found in research suggests that
transformational leadership behavior is strongly correlated with lower turnover, higher
productivity and quality, and higher employee satisfaction than other approaches. However, not all
managers in TQ organizations need be transformational leaders. An organization pursuing TQ
needs both those who establish visions and those who are effective at the day-to-day
(transactional) tasks needed to achieve them. In fact, Avolio and Bass extended the concept of
transformational leadership by developing a hybrid of transactional and transformational
leadership, which they labeled the Full Range of Leadership approach. They noted that
Transformational leadership adds to transactional leadership in its effects on follower satisfaction
and performance. Transformational leadership does not replace transactional leadership
Transactional leadership, particularly contingent rewards, provides a broad basis for leadership,
but a greater amount of effort, innovation, effectiveness, risk taking, and satisfaction can be
achieved by transactional leadership if it is augmented by transformational leadership.
3. It would appear to be moderately difficult to duplicate the leadership style used by Simonic and
the organizational systems practiced at Addy. The basic management structure was built around
what might be called a socio-technical system design that included teamwork, informal,
democratic management style, and highly technical process management and control
requirements. As indicated in the text, organization structure has numerous facets, including:
1. Company operational and organizational guidelines. Standard practices that have

developed over the firms history often dictate how a company organizes and operates.
2. Management style. The management team operates in a manner unique to a given company.
For example, management style might be formal or informal or democratic or autocratic. If
the organization operates in a highly structured, formal atmosphere, organizing a quality effort
around informal meetings would probably meet with little success.
3. Customer influences. Customers, particularly governmental agencies, may require formal
specifications or administrative controls. Thus, the organization needs to understand and
respond to these requirements.
4. Company size. Large companies have the ability to maintain formal systems and records,
whereas smaller companies may not.
5. Diversity and complexity of product line. An organization suitable for the manufacture of a
small number of highly sophisticated products may differ dramatically from an organization
that produces a high volume of standard goods.
6. Stability of the product line. Stable product lines generate economies of scale that influence
supervision, corrective action, and other quality-related issues. Frequent changes in products
necessitate more control and commensurate changes to the quality system.
The style that he used was effective for the situation that he had to work with. Thus, he was able
to turn the plant around by applying transformational and transactional leadership style.
Merging Divergent Quality Systems at Honeywell
1. Allied Signal was one of the pioneers of Six Sigma quality, which they borrowed from
Motorola. Honeywell developed their own quality management approach, called
Honeywell Quality Value (HQV) that was Baldrige-based. Both systems were working
very well for the two companies. However, when the merger took place, it was necessary
that a new, integrated approach be devised that would build on the successes of each
separate process. This was given the title of Six Sigma Plus, based on the DMAIC
process.
2. Top management, in the person of CEO Bonsignore has expressed public commitment to Six
Sigma Plus as the approach that will drive growth and productivity by energizing all of
Honeywell Internationals 120,000 employees Other top managers, such as Mr.
Romanoff, Honeywells communications director for Six Sigma Plus, as well as Mr. Stark,
VP of Six Sigma and Productivity have also given public support to using and improving
the merged Six Sigma processes.
3. Six Sigma Plus uses the same basic problem-solving methods and Belt designations for
quality experts as the traditional Six Sigma approach. However, it incorporates several
unique features. Some of these are lean approaches to process design, learning rather
than a pure training model, attention to team-dynamic skills in the training process, and
belt experts in supportive processes such as lean, activity-based management (ABM),
and total preventive maintenance (TPM).
ANSWERS TO REVIEW QUESTIONS

1.
Companies decide to pursue performance excellence for two basic reasons: a) as a

reaction to competition that poses a threat to its profitable survival, and b) as an
opportunity to improve. The first reason is most prevalent. When faced with a threat to
survival, a company effects cultural change more easily; under these circumstances,
organizations generally implement performance excellence effectively.
2.
Leadership is defined as the ability to positively influence people and systems under ones
authority to have a meaningful impact and achieve important results. It implies the right to
exercise authority and the ability to achieve results. Strong leadership is necessary to
successfully implement a quality process. Leaders may seek to motivate employees and
develop enthusiasm for quality with rhetoric, but taking strong, decisive, and personal
action to implement quality changes makes a bigger impression on employees. Leadership
is the most essential ingredient for success in developing a culture of performance
excellence. But gaining commitment from top executives is not easy. Dale Crownover,
CEO of Texas Nameplate Company a Baldrige winner, was quoted as saying that the
best way to sell quality to top executives is to show them where money is being lost due to
absenteeism, downtime, not having procedures in place, lack of job descriptions, and poor
training.
3.
Six competencies for leadership based on more than 50 authors thoughts on leadership
are:
Navigator creates shared meaning and provides direction towards a vision, mission,
goal or end-result. This competency may entail risk taking and requires constant
evaluation of the operating environment to ensure progress in the appropriate direction
is achieved.
Communicator effectively listens and articulates messages to provide shared
meaning. This competency involves the creation of an environment that reduces
barriers and fosters open, honest and honorable communication.
Mentor provides others with a role to guide their actions. This competency requires
the development of personal relationships that help others develop trust, integrity and
ethical decision making.
Learner continuously develops personal knowledge, skills and abilities through
formal study, experience, reflection and recreation.
Builder shapes processes and structures to allow for the achievement of goals and
outcomes. This competency also entails assuming responsibility for ensuring necessary
resources are available and the evaluation of processes to ensure effective resource
use.
Motivator influences others to take action in a desirable manner. This competency
also includes the evaluation of peoples actions to ensure they are performing
consistently with the mission, goal or end-result.
A collection of personal leadership characteristics underlie these six competencies:

1. Accountability taking responsibility for the organization, community or self that the
leader serves. This provides the means for measuring performance and dealing with
performance that is not good.
2. Courage the mental or moral strength to venture, persevere and withstand danger,
fear or difficulty with a firmness of mind and will, allowing leaders to navigate into the
unknown.
3. Humility what gives excellent leaders their ability to mentor, communicate and learn,
and understand that they are servants of those that follow.
4. Integrity the ability to discern what is right from wrong and commit to the right
path.
5. Creativity the ability to see possibilities, horizons and futures that dont yet exist,
enabling the leader to help create a shared vision.
6. Perseverance sticking to a task or purpose, no matter how hard or troublesome.
This is vital to overcoming obstacles and motivating subordinates.
7. Well-being the ability to stay healthy in both work and play, demonstrating the
importance of being ready to implement leadership competencies when needed.
These characteristics provide the foundation for exercising the competencies. Many
notable leaders, from presidents to CEOs have exhibited these characteristics.
4.
Key practices for performance excellence leadership may be found in Table 9-1. They
include, in summary form:
a. Relating to visionary leadership, there is the need for organization leaders (especially
Senior Leaders) to set and deploy organizational vision and values, demonstrate those
values through person actions, promote an environment leading to legal and ethical
behavior, and create a sustainable organization.
b. Relating to organizational performance, there is the need for leaders to create an
environment for organizational performance improvement, with a focus on the
organizations mission and strategic objectives, innovation, competitive or role-model
performance leadership, and organizational agility; provide for organizational and
workforce learning and participate in succession planning and the development of future
organizational leaders
c. Relating to communication, organizational leaders must communicate with the entire
workforce, encourage frank, two-way communication throughout the organization, and
communicate key decisions.
d. Relating to performance and results, leaders are expected to take an active role in
reward and recognition programs to reinforce high performance, create an action focus to
accomplish the organizations objectives, review performance measures to inform them on
needed actions, balance value for customers and other stakeholders in organizational
performance expectations and evaluate their own performance and use the results to
improve their leadership effectiveness and the leadership system.
e. Regarding community focus, leaders must contribute to supporting and strengthening
key communities such as charitable organizations, education, and others.
5.
The leadership system refers to how leadership is exercised throughout the organization,
and includes both formal and informal mechanisms for leadership development. It requires
the elements of: 1) clear values that reflect stakeholder requirements and set high
expectations for performance and improvement; 2) a means of building loyalty and
teamwork based on the shared values, encouraging initiative and risk-taking, and
subordinating organization to purpose and function; and 3) a mechanism for leaders to
engage in self-examination and improvement.
6.
Steering teams in leadership systems have the responsibility to provide leadership,

planning, implementation, and review direction. Leadership involves articulating a quality
vision, and ensuring that the business management process is aligned, deployed, and
supported at all levels. Planning involves strategic planning, setting goals and priorities,
ensuring that all employees have the opportunity to participate, and aligning reward and
recognition systems to support the quality approach. Implementation involves
development of key business process and management teams, reviewing plans, and
working with suppliers and business partners in carrying out joint quality planning. Review
includes tracking progress of various measures, improving quality systems, planning
improvements, and validating the impact of improvements.
Corporate social responsibility and community support efforts include what is termed
Corporate Governance in the Baldrige Award criteria. It includes development of ethics,
protection of public health, safety, and concern for the environment. Senior leaders must
act to prevent problems, make forthright responses when problems occur, and make
information available in order to maintain public awareness, safety, and confidence in the
organization. Leaders should not only comply with local, regional, and national laws and
regulations, but also make an effort to continuously improve beyond mere compliance.
Good citizenship implies that an organization and its leaders support publicly important
purposes, such as improving education, public health, the environment, etc., within the
limits of its resources. Corporate social responsibility is more important than ever because
of recent corporate scandals that have occurred, especially in housing, banking, and
financial markets. It has also become a strategic imperative and a competitive or
marketplace necessity. Research points to a positive relationship between CSR and
business performance. In addition, an ethical business environment within an organization
creates trust from customers and employees, resulting in higher customer satisfaction,
stronger employee commitment, and improved quality, all of which lead to higher profits.
8.
Traditional leadership theories (see Bonus Materials on the Premium website) are based on
four common perspectives:

a)
b)
c)
d)
The trait approach--Involves discerning how to be a leader by examining the

characteristics and methods of recognized leaders.
The behavioral approach--Attempts to determine the types of leadership behaviors
that lead to successful task performance and employee satisfaction.
The contingency approach--Holds that there is no universal approach to
leadership. Rather, effective leadership behavior depends on situational factors
(i.e. who is leading, who is led, and what is the situation) that may change over
time.
The role approach--Suggests that leaders perform certain roles depending on the
situation.
These theories have implications for total quality in that they provide different views of
how leaders lead. They also help to understand how these theories have evolved to the
present. The older views suggest that perspectives on quality management may benefit
from looking at what other leaders do, but they also contain an implied warning that there
is no one best way that can be incorporated into every organization. Thus, if effective
leadership behavior depends on situational factors i.e. who is leading, who is led, and what
is the situation, that may change over time, the TQ leader needs to determine the leader,
led and situational variables in his/her own part of the organization, and find out what
works. Likewise, in the role approach--where leaders must perform certain roles
depending on the situation, the TQ leader establishes what roles need to be filled within
his/her own organization, not some other successful one.
9.
Emerging theories -- enhance or extend current theory by attempting to answer questions

raised, but not answered, by traditional contingency approaches. For example,
Attributional Theory states that leaders' judgment on how to deal with subordinates in a
specific situation is based on their attributions of the internal or external causes of the
behaviors of followers. One of the most widely used merging theories is Emotional
Maturity Theory. It is based on the premise that too much attention has been placed on the
rational side of leadership in leadership research. The author of the theory, Daniel
Goleman, states that emotionally intelligent leaders must develop characteristics of 1) selfawareness, 2) self-regulation, 3) motivation, 4) empathy, and 5) social skill. Such
characteristics and skills are not generally captured in performance evaluation systems.
Self-management and interpersonal skills are as essential to managerial success as rational
skills are. The implications for a total quality system are that without self-management
skills, it is difficult to inspire and motivate peers and subordinates into developing and
supporting an integrated leadership system and long-range plans for the organization.
Without interpersonal skills, it is difficult for managers to build rapport among customers,
suppliers, and others outside the organization that are needed to establish long-term
effectiveness.
10.
Organizations might pursue ISO 9000, Six Sigma, Baldrige, or some combination of all
three. Many routes can be taken to building a quality culture, but none of them represents
the one best way. Approaches that an organization uses should make the most sense
and work in the organization.
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Many organizations start with ISO 9000 because of its prescriptive nature and process
orientation. They develop a quality policy, a quality manual, and prepare for, and perform
a quality audit, with the assistance of an outside auditor.
Other organizations start with an action orientation and install a Six Sigma process. A
fully implemented Six Sigma process is a strategic approach that is driven and supported
by top management, but is deployed throughout the organization at every level. Several
key principles are necessary for effective implementation of Six Sigma:
Committed leadership from top management.
Integration with existing initiatives, business strategy, and performance

measurement.
Process thinking.
Disciplined customer and market intelligence gathering.
A bottom-line orientation.
Leadership in the trenches.
Training.
Continuous reinforcement and rewards.
Iomega Corporation summarized it as: invest in people, make data based decisions, and
achieve and measure results.
Implementing Baldrige requires repetitive cycles of self-assessment, priority-setting, action
planning to address gaps and opportunities for improvement, and reflection of results, all
driven by an organizations vision, strategic challenges, and capabilities. A major benefit of
Baldrige is that it naturally provides a framework for organizational learning, and therefore
helps to enhance and sustain an organization, no matter what level of current maturity.
11.
Culture, or "corporate culture," is the way an organization does things. The way of doing
things at a company is important for effective quality management and control since the
processes of production generally have the greatest effect on quality output. Studies show
that change is easier in corporate cultures that emphasize customer satisfaction and
continuous improvement; in other words those that embrace performance excellence.
Cultural values are often seen in the mission and vision statements of organizations.
Culture is a powerful influence on behavior because it is shared widely and because it
operates without being talked about, and often without being thought of.
12.
Strategic change and process change are significantly different from each other, although
process change supports strategic change. Strategic change stems from strategic
objectives, which are generally externally focused and relate to significant customer,
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market, product/service, or technological opportunities and challenges. This is what an

organization must change to remain or become competitive. Strategic change is broad in
scope, is driven by environmental forces, and is tied closely to the organizations ability to
achieve its goals. In contrast, process change deals with the operations of an organization.
13.
Senior managers must ensure that their plans and strategies are successfully executed to
lead cultural change within the organization. The ten managerial roles, defined by
Mintzberg, that leaders must play include (1) figurehead, (2) leader (3) liaison, (4)
monitor, (5) disseminator, (6) spokesperson, (7) entrepreneur, (8) disturbance handler, (9)
resource allocator, (10) negotiator. The importance of each role is contingent on the
environmental and organizational factors that face managers who must lead, i.e. the
industry or environment surroundings of the organization, its age and size, etc.
Senior managers' responsibilities include the following tasks:
a. Ensure that the organization focuses on the needs of the customer.
b. Cascade the mission, vision, and values of the organization throughout the
organization.
c. Identify the critical processes that need attention and improvement.
d. Identify the resources and tradeoffs that must be made to fund the TQ activity.
e. Review progress and remove any barriers to progress.
f. Improve macro processes in which they are involved, both to improve the performance
of the process and to demonstrate their ability to use quality tools for problem solving.
Middle managers are often called on to monitor progress; disseminate information and
suggestions between local and distant line, staff, and outside experts; and act as a
spokesperson inside and outside the firm. Technology development requires that
managers constantly scan the environment to be aware of technological developments that
may threaten or enhance the operations of the company. Systems and process integration
means optimizing the system to meet strategic goals such as customer service, and using
tools of quality measurement and continuous improvement. Samuel suggests that
transforming middle managers into change agents requires a systematic process that
dissolves traditional management boundaries and replaces them with an empowered and
team-oriented state of accountability for organizational performance. Middle managers
must also show that they support total quality, by listening to employees as customers,
creating a positive work environment, implementing quality improvements enthusiastically,
challenging people to develop new ideas and reach their potential, setting challenging
goals and providing positive feedback, and following through on promises. These changes
are often difficult for middle managers to accept.
The work force implements quality policies. This requires ownership that goes beyond
empowerment and gives employees the right to a voice in deciding what needs to be done
and how to do it. It is based on a belief that what is good for the organization is also good
for the individual and vice-versa.
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Labor's role is first to recognize the need for changing its relationship with management
and then to educate its members as to how cooperation will affect the organization. This
information includes what its members can expect, and how working conditions and job
security might change. At the same time, management must realize that the skills and
knowledge of all employees are needed to improve quality and meet competitive
challenges. Management must be willing to develop a closer working relationship with
labor and be ready to address union concerns and cultivate trust.
14.
Wainwright made a radical change in corporate culture to deal with their crisis in the
1980s. Management realized that they were part of the problem, so they put all workers
on salaries and began to call them associates. Management and workers all began to wear
the same uniform, developed common reward and bonus systems together, tore down
walls and barriers, and began to treat both internal and external customers as partners.
Their culture is now based on sincere belief and trust in people. The lessons learned
indicate that management puts up many barriers in developing corporate culture, and only
they can dismantle them if they want to develop such an open, productive, and supportive
culture.
15.
In the Baldrige criteria, alignment is defined as consistency of plans, processes, actions,

information, decisions, results, analysis, and learning to support key organization-wide
goals. Effective alignment requires common understand of purposes and goals and use of
complementary measures and information for planning, tracking, analysis, and
improvement at each of the three levels of quality. A well-aligned organization has its
processes focused on achieving a shared vision and strategy of performance excellence.
Aligning the organization is a challenging task that is accomplished through a sound
strategy and effective deployment. . Integration refers to the harmonization of plans,
processes, information, resource decisions, actions, results, and analyses to support key
organization-wide goals.
16.
The Best Practices study, by Ernst and Young, found that best practices depend on the
current level of performance of a company, and that trying to implement all the practices
of world-class organizations can actually waste time and money, not help. The study used
two performance measures: ROA (return on assets: after tax income divided by total
assets) and VAE (value added per employee: sales less the costs of materials, supplies, and
work done by outside contractors). Low performers -- those with less than two percent
ROA and $47,000 VAE -- can reap the highest benefits by concentrating on fundamentals,
i.e. identifying and improving processes to better serve customer and market demands.
Medium performers -- those with ROA's from two percent to 6.9 percent and VAE
between $47,000 and $73,999 -- achieve the most benefits from meticulously
documenting gains and further refining practices to improve value added per employee,
time to market, and customer satisfaction. High performers -- with ROA and VAE
exceeding seven percent $74,000 respectively -- gain the most from using self-managed
teams and cross-functional teams that concentrate on horizontal processes such as
logistics and process development.
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The best practices can be related to the Deming philosophy in that Deming always
advocated profound understanding of processes and systems. This is shown in Points 3, 5,
and 9 of his 14 Points. In 3 he advocated using inspection for improvement of processes
and cost reduction (concentrating on the "fundamentals" for low-performing companies);
Point 5 requires improving constantly and forever the system of production and service
(documenting the gains for medium performers, as well as other process refinements); and
more emphasis on advanced teamwork and horizontal processes (for high performers), as
suggested in Point 9 -- optimize toward the aims and purposes of the company the efforts
of teams, groups, and staff areas.
17.
The typical life cycle of a quality initiative includes the steps of:
1. Adoption: the implementation stage of a new quality initiative.
2. Regeneration: when a new quality initiative is used in conjunction with an existing one
to generate new energy and impact.
3. Energizing: when an existing quality initiative is refocused and given new resources.
4. Maturation: when quality is strategically aligned and deployed across the organization.
5. Limitation or stagnation: when quality has not been strategically driven or aligned.
6. Decline: When a quality management system (QMS) has had a limited impact,
initiatives are failing and the QMS is awaiting termination.
It is important that senior leaders understand that the life cycle provides a strategic
mechanism to chart and sustain quality while proactively countering shortcomings of its
implementation, such as stagnation and limited application, which can ultimately result in
failure.
18.
Senge defines a learning organization as "an organization that is continually expanding its
capacity to create its future. For such an organization, it is not enough merely to survive.
'Survival learning,' or what is most often termed 'adaptive learning' is important -- indeed it
is necessary. But for a learning organization, 'adaptive learning' must be joined by
'generative learning,' learning that enhances our capacity to create."
Organizations cannot count on succeeding in the long run if they merely have committed
leaders who use TQ principles for strategic planning and policy deployment, practice TQ
in daily operations, and use it for continuous improvement of the current process. These
adaptive activities are called "first generation" TQ. Senge advocates developing a learning
organization with a new approach to leadership. Instead of the adaptive approach to
learning, leaders must use a generative approach -- constantly anticipating the needs of
customers to the point of anticipating products or services they would value but have
never experienced and would never think of asking for. Leaders must develop the ability to
integrate creative thinking and problem solving throughout the organization.
19.
Self-assessment is the holistic evaluation of processes and performance. The self part of
the term means that it should be conducted internally rather than simply relying on an
external consultant. An organization should make a critical self-assessment of where it
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stands in relation to its quality commitment. That can help it to identify strengths and areas
for improvement and determine what practices will yield the most benefit. At a minimum, a
self-assessment should address the following:
a.
Management involvement and leadership. To what extent are all levels of
management involved?
b.
Product and process design. Do products meet customer needs? Are
products designed for easy manufacturability?
c.
Product control. Is a strong product control system in place that
concentrates on defect prevention, before the fact, rather than defect
removal after the product is made?
d.
Customer and supplier communications. Does everyone understand who
the customer is? To what extent do customers and suppliers communicate
with each other?
e.
Quality improvement. Is a quality improvement plan in place? What results
have been achieved?
f.
Employee participation. Are all employees actively involved in quality
improvement?
g.
Education and training. What is done to ensure that everyone understands
his or her job and has the necessary skills? Are employees trained in quality
improvement techniques?
h.
Quality information. How is feedback on quality results collected and
used?
Most self-administered surveys, however, can only provide a rudimentary assessment of an
organizations strengths and weaknesses. The most complete way to assess the level of TQ
maturity in an organization is to evaluate its practices and results against the Malcolm
Baldrige National Quality Award criteria by using trained internal or external examiners, or
by actually applying for the Baldrige or a similar state award and receiving comprehensive
examiner feedback. Understanding ones strengths and opportunities for improvement
creates a basis for evolving toward higher levels of performance.
20.
Following up in self-assessment activities requires senior leaders to engage in two types of

activities: action planning and subsequently tracking implementation progress.
To leverage self-assessment findings, managers must do four things:
a. Prepare to be humbled. Humbling is a word we often hear from managers who have
recently digested assessment findings.
b. Talk though the findings. Follow-up can be enhanced when the top management team
discusses the self-assessment findings.
c. Recognize institutional influences. Managers should be sensitive to the institutional
forces working on their self-assessment activities, such as pressures from customers.
d. Grind Out the Follow-up. Follow-up activities provide infrastructure for realizing the
process improvements possible from self-assessment.
15
ANSWERS TO DISCUSSION QUESTIONS

1.
By saying that leadership is the "driver," we try to emphasize the critical nature of leadership
at every level for successful TQ. The answer to Review Question 3, above, elaborates on the
practices of top managers in leading TQ focused organizations. Without strong commitment
of leaders at every level, a TQ system may not survive, and it certainly will not grow and
flourish.
2.
Again see Review Question 3, above, as a basis for developing the answer to this question.
3.
Leaders can demonstrate the seven personal leadership characteristics of: accountability,
courage, humility, integrity, creativity, perseverance, and well-being, but it isnt always easy.
As quality guru A. V. Feigenbaum noted, The passion is in living and working in the spirit
of a quality ethic which means having a deep belief that what you do to make quality
better makes everything in the organization better.
4.
Answers will vary, depending on the experiences of the students.
5.
The answer to this question will require that students "go beyond" the textbook and the
materials in the Bonus materials folder on the Premium website and research the Fiedler
model, in more detail. A principles of management or organizational behavior text will
probably have Fiedler's "Model of the Effects of Leadership Styles on Leader Performance
According to Situational Conditions" and sufficient detail for this answer. Although Fiedler's
situational model is not discussed in detail in the chapter, other sources show that the
"situational conditions" consist of the leader (called the "leader position power" variable by
Fiedler), the led (called the "leader-member relations" variable), and the situation (called "task
structure"). Because tasks become less structured in a TQ environment (in contrast to rigid,
highly structured tasks in traditional organizations), leader position power is weakened (the
first line employees are "empowered"), but leader-member relations are typically good (due
to high quality communications and shared commitment). Thus, a "relationship-oriented"
leader is better qualified than a "task-oriented leader" in this situation.
6.
A dysfunctional corporate culture is one in which shared values and behavior are at odds
with the organization's long-term health. If the quality of a company's product or service is
low, there is usually a flaw somewhere in the corporate culture. An example of a
dysfunctional culture is a high-tech company that stresses individual rewards while
innovation depends on teamwork. To change their management practices, organizations
must first address their fundamental values.
7.
A concise summary of the principles on which modern, high-performing TQ organizations

are built and managed is given in the set of Core Values and Concepts that form the basis
for the Baldrige criteria. These are the Baldrige process explanations of Core Values and
Concepts (using the 2008 Criteria wording):

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
16
Visionary leadership
Customer driven excellence
Organizational and personal learning
Valuing workforce members and partners
Agility
Focus on the future
Managing for innovation
Management by fact
Social responsibility
Focus on results and creating value
Systems perspective
Although there is overlap between these values and concepts, it is easy to see that the
criteria and core values and concepts may be aligned as follows, with criteria listed
alphabetically and values under them, numerically:
A. Leadership
1. Visionary leadership
11. Systems perspective
B. Strategic Planning
6. Focus on the future
7. Managing for innovation
C. Customer and Market Focus
2. Customer-driven excellence
9. Social responsibility
D. Measurement, Analysis, and Knowledge Management
8. Management by fact
10. Focus on results and creating value
E. Workforce Focus
4. Valuing workforce members and partners
3. Organizational and personal learning
F. Process Management
5. Agility
7. Managing for innovation (repeated)
8
In a site visit to a TQ organization, you would see most of these core values and
concepts exemplified. In most cases, you would not have an opportunity to
perform a site visit at a non-TQ company. If you did, you would tend to see the
17
opposite conditions in many places throughout the organization. Interested readers

are referred to the most current detailed Baldrige Criteria, available on the Internet at
http://www.quality.nist.gov. Just to give some understanding of the how the values and
concepts might be integrated into management and organizational structure of a Baldrige
recipient, and what might be observed on a site visit, the first three core values as
described in the 2008 Baldrige materials are as follows:
Visionary Leadership
An organizations senior leaders should set directions and create a customer focus, clear
and visible values, and high expectations. The directions, values, and expectations should
balance the needs of all your stakeholders. Your leaders should ensure the creation of
strategies, systems, and methods for achieving excellence, stimulating innovation, and
building knowledge and capabilities. The values and strategies should help guide all
activities and decisions of your organization. Senior leaders should inspire and motivate
your entire workforce and should encourage all employees to contribute, to develop and
learn, to be innovative, and to be creative. Senior leaders should be responsible to your
organizations governance body for their action and performance. The governance body
should be responsible ultimately to all stakeholders for the ethics, vision, actions, and
performance of your organization and its senior leaders.
Senior leaders should serve as role models through their ethical behavior and their
personal involvement in planning, communications, coaching, development of future
leaders, review of organizational performance, and employee recognition. As role models,
they can reinforce ethics, values and expectations, while building leadership, commitment,
and initiative throughout your organization.
Customer-Driven Excellence
An organizations customers judge quality and performance. Thus, your organization must
take into account all product and service features and characteristics and all modes of
customer access that contribute value to customers. Such behavior leads to customer
acquisition, satisfaction, preference, referral, retention and loyalty, and to business
expansion. Customer-driven excellence has both current and future components:
understanding todays customer desires and anticipating future customer desires and
marketplace potential.
Value and satisfaction may be influenced by many factors throughout your customers
overall purchase, ownership, and service experiences. These factors include your
organizations relationships with customers, which help build trust, confidence, and loyalty.
Customer-driven excellence means much more than reducing defects and errors, merely
meeting specifications, or reducing complaints. Nevertheless, reducing defects and errors
and eliminating causes of dissatisfaction contribute to your customers view of your
organization and thus are also important parts of customer-driven excellence. In addition,
18
your organizations success in recovering from defects and mistakes (making things right
for the customer) is crucial to retaining customers and building customer relationships.
Customer-driven organizations address not only the product and service characteristics
that meet basic customer requirements but also those features and characteristics that
differentiate products and services from competing offerings. Such differentiation may be
based upon new or modified offerings, combinations of product and service offerings,
customization of offerings, multiple access mechanisms, rapid response, or special
relationships.
Customer driven excellence is thus a strategic concept. It is directed toward customer
retention, market share gain, and growth. It demands constant sensitivity to changing and
emerging customer and market requirements and to the factors that drive customer
satisfaction and retention. It demands anticipating changes in the marketplace. Therefore,
customer-driven excellence demands awareness of developments in technology and
competitors offerings, as well as rapid and flexible response to customer and market
changes.
Organizational and Personal Learning
Achieving the highest levels of business performance requires a well-executed approach to
organizational and personal learning. Organizational learning includes both continuous
improvement of existing approaches and adaptation to change, leading to new goals
and/or approaches. Learning needs to be embedded in the way your organization operates.
This means that learning (1) is a regular part of daily work; (2) is practiced at personal,
work unit, and organizational levels; (3) results in solving problems at their source (root
cause); (4) is focused on sharing knowledge throughout the organization; and (5) is
driven by opportunities to effect significant change and to do better. Sources for learning
include employees ideas, research and development (R&D), customers input, best
practice sharing, and benchmarking.
Organizational learning can result in (1) enhancing value to customers through new and
improved products and services; (2) developing new business opportunities; (3) reducing
errors, defects, waste, and related costs; (4) improving responsiveness and cycle time
performance; (5) increasing productivity and effectiveness in the use of all resources
throughout your organization; and (6) enhancing your organizations performance in
fulfilling its societal responsibilities and its service to your community as a good citizen.
Employees success depends increasingly on having opportunities for personal learning
and practicing new skills. Organizations invest in employees personal learning through
education, training, and other opportunities for continuing growth. Such opportunities
might include job rotation and increased pay for demonstrated knowledge and skills. Onthe-job training offers a cost-effective way to train and to better link training to your
organizational needs and priorities. Education and training programs may benefit from
19
advanced technologies, such as computer-and Internet-based learning and satellite

broadcasts.
Personal learning can result in (1) more satisfied and versatile employees who stay with
the organization, (2) organizational cross-functional learning, and (3) an improved
environment for innovation.
Thus, learning is directed not only toward better products and services but also toward
being more responsive, adaptive, and efficient giving your organization marketplace
sustainability and performance advantages.
The Use of the Framework to Embody the Criteria
Other ways that the core values are embodied in the Baldrige Criteria can be seen in the
Framework (Baldrige Model).
9.
Amazingly, many colleges and universities would not be classified by

Senge as "learning organizations." To do so, they would have to begin
to practice what they teach. For example, colleges of business and
engineering would have to go beyond just teaching about enhancing
performance to applying it to their academic and administrative
processes, also. Internal benchmarking could also be done within and
between several different departments in a university. For example,
the facilities department or group might show examples of excellent
building and renovation projects to other administrative or academic
departments, giving them the fine points of how to design, control,
and improve their project management process. The College of
Education might be able to provide best practices for classroom
teaching in the Colleges of Business or Engineering. The business
office might be able to provide suggestions for improvement and
training in accounting and cost control for administrators in the
academic departments.
10.
Each of the principles used by geese has a quality parallel that should be considered. Many
of them are so obvious as to make one wonder, how did those geese become so smart?
or why are we so dumb? Organizations wishing to implement performance excellence
might benefit from studying the behavior of geese and drawing the following parallels;
a) This shows the synergistic value of teamwork. The team is
able to provide more lift to the organization than any one
individual, or the sum of their efforts when they work alone.
b) Going alone to reach a goal is possible, but generally not as
productive, or as much fun.
20
c) The most powerful leaders are the ones that are not
threatened by letting their subordinates take the lead from
time to time. Not only does this help the leader to rest, but it
also helps the employee to develop valuable leadership and
problem-solving skills that can be used immediately and later.
d) Everyone needs encourage when performing a difficult task,
especially if one is the leader. Too often the followers dont
show appreciation for the leader, which makes their job more
difficult.
e) This action by the geese shows concern for others. It also
shows that teamwork is maintained, even when trying to
assist someone that has fallen behind. The fact that two
geese stay behind to help the third one is quite impressive.
The cost may be worth the price, if the injured member is
brought back to full productivity.
11.
Student opinions may vary, but by this time in the course, they should
be convinced of the value of quality, and that quality does pay.
They should also consider what a world without a quality focus would
mean, in terms of safety, security, and satisfaction with our products
and services.
SUGGESTIONS FOR PROJECTS, ETC.

1.
Characteristics of leadership effectiveness should be identified by the students and may

include: how senior leaders set clear values, set high expectations for performance, set
expectations for performance improvement, build loyalty, build teamwork, promote
initiative, encourage risk-taking, and clearly promote the purpose and function of the
business over maintaining structure or executive privilege. Questions could be
constructed on a scale of 1-7 or 1-10, with 1 = Strongly disagree and 7 = Strongly agree.
For example, in setting clear values and high expectations, the questions might include:
Strongly disagree
Strongly agree
1
2
3
4
5
6
7
Senior leadership develops, commun+-----+-----+-----+-----+-----+-----+
icates, and demonstrates clear values for
the organization.
1
2
3
4
5
6
7
Senior leadership sets, communicates,
+-----+-----+-----+-----+-----+-----+
and supports high expectations for
performance throughout the organization.
Senior leadership sets, communicates,
1
2
3
4
5
6
7
+-----+-----+-----+-----+-----+-----+
21
and supports high expectations for improving

performance throughout the organization.
2.
Leadership styles will vary widely, depending on such factors as the type of organization,
its size, and the philosophy of the top management. Expect to see any one of the styles
listed in the chapter, including coaching, transactional, or transformational leadership, or a
combination of two or more of these.
3.
Conklins questions can provide a useful checklist for leadership styles. See his article,
referenced in the question, for more background. They also provide a starting point for
useful discussions of what is a leader. Keep in mind that there are hundreds of
psychologically validated leadership inventories. We can only provide a brief introduction
and overview in this chapter. For a more rigorous approach, consult one of the
organization behavior professors in your universitys college of business or the
management department.
4.
This project will provide some interesting contrasts in cultural values,

as students surf the Web for answers. You might point the students
to some of the websites of Baldrige winners and some of the subjects
of cases in this text, as a starting point.
5.
Students will likely find a great deal of variation in terms of commitment to quality and
performance excellence principles. In addition, there will be a lot of variation as to the
keys to success of those that do have an on-going commitment. For more processoriented manufacturing or service organizations, expect to see the five universal best
practices exhibited, including:
a. Cycle-time analysis
b. Process value analysis
c. Process simplification
d. Strategic planning
e. Formal supplier certification programs
Also, such organizations would seek to avoid or tear down barriers to successful
implementation, such as:
a. lack of what Deming called constancy of purpose
b. lack of a holistic systems perspective
c. lack of alignment and integration with the organizational system.
d. failure to focus on achieving a shared vision through development of a sound strategy
and effective deployment.
6.
This project is designed to give students insights into how the Baldrige criteria are closely
inter-related to core values and concepts. See answer to Discussion Question #7, above,
as a resource for this project.
22
7.
This can be an interesting hands on project that may be beneficial to the students who
are the interviewees, as well as those who are interviewing. It is likely that few students,
even good ones, have analyzed how they go about learning, much less develop best
practices. There is a whole literature in educational psychology on learning styles that
might be explored.
8.
See the answer to Review Question #10, above, as a resource for this project. Small and
large companies differ in a number of ways in which they can implement TQ, whether they
use a Baldrige, Six Sigma, or ISO 9000 approach. Small companies have less access to
specialists, such as financial, technical (such as Six Sigma Black Belts), and human
resources experts. They often cannot support sophisticated information systems to gather
and analyze customer and process data. However, they do have some advantages over
large organizations. They are more agile, thus able to respond quickly to changing
customer needs. Because they are small, they are often closer to their customers and
interact frequently with them. Employees often have been with the company for many
years and are highly skilled and loyal. They will often respond to a problem or crisis by
sticking with it until its solved. Quality can often be built in to products or services,
because employees will see the need for it in order to remain competitive. Students should
be encouraged to study some small and large companies in order to explore these
differences.
9.
The following table is meant to be a suggestive, but not exhaustive, list of characteristic
changes in practices related to the Baldrige Criteria, as an organization moves from a
traditional to a world-class quality system.
Traditional
Growing
Quality
World-Class
Baldrige
Management
Awareness of Quality
Management
Quality
Category
Practices
System
Management
1
Senior leaders job is Senior leaders job is Senior leaders job is Senior leaders job is
to maintain the
to ensure that quality to define and
developing vision
status quo by
problems are
manage change
and encouraging
preventing change
brought to mgt.s
toward a quality
innovation and
attention
mgt. system
change.
Managers oversee
Managers oversee Managers guide
Managers facilitate
departments or
functions.
dept./functions to
depts/ functions to- depts/ functions
stop ext. failure
ward quality
efforts to reach
prevention/appraisal stretch goals
2
Senior leaders
Senior leaders
Senior leaders and Senior leaders
develop goals and
develop goals in
lower level mgrs.
develop mission and
pass down
consultation with
develop goals and
vision on which
middle
managers
resolve
through
give
stretch goals are
Goals are zero-sum
based and use a
Goals are based on & take.
game - loser for
catchball process to
Goals
are
based
on
every winner
incentives for
deploy
highest individual
mutual trust and

Traditional
Management
Practices
Growing
Quality
Management
System
team efforts
23
World-Class
Baldrige
Quality
Category
Management
performers
Goals are cascaded
with individual and
team rewards for
accomplishment
3
Customers are
Customers needs are Customers are
Customers are
outsiders in the
the focus of
surveyed to
insiders in the
domain of marketing marketing and sales determine
domain of design,
and sales
satisfaction
production, and
Customers have
Customers have no some impact on
Customers/suppliers marketing
Customers have a
impact on product
product design
are consulted in
design
major impact on
Complaints are taken product design
decisions
product design
Complaints are only as a signal of quality
Complaints are
Complaints are only
reacted to
problems
handled systema part of a complete
Customer/supplier
atically
and
used
for
customer
dialogs on quality
product/process
management process
sometimes occur
improvement
4
Control is achieved Control is achieved Control is achieved Control is achieved
by pre-established
by somewhat flexible by cooperative team by alignment with
inflexible responsive responsive patterns efforts to improve
goals
patterns
processes
Information is
Information is
Information is
generally considered Information is
interlinked and is
generally considered to be confidential,
considered to be
considered to be
to be secret
but available
widely available to
openly available
those inside the
unless proprietary or
organization
personally sensitive
5
People are an
People often have People should be People should be
interchangeable
valuable unique
encouraged to work empowered to work
commodity
skills and should be in teams to solve
individually and in
teams to meet
Adversarial relation- rewarded for indivi- problems
dual
contributions
individual and
Cooperative
ship between union
organizational goals
Consultative
and management
relationships
Relationships
relationship
between
between
union
and
Hierarchical
management need to between union and
chimney structures union and mgt.
be developed
management based
prevent teamwork Chimney structon full partnership
Chimney strucbetween functions.
ures need to be
Cross-functional and
reduced to permit
tures virtually
Performance
team, and project
appraisal and reward teamwork between eliminated to
functions.
enhance
teamwork
structures virtually
systems place people
between functions.
eliminate hierarchy.
Performance
in a competitive

Traditional
Management
Practices
environment.
24
Growing
Quality
World-Class
Baldrige
Management
Quality
Category
System
Management
appraisal and reward Performance
Performance
systems need modifi- appraisal and reward appraisal and reward
cation to reduce
systems modified by systems replaced by
competitive environ- team and/or goalteam, goal, and
ment
based reward
knowledge-based
systems
reward systems
6
Processes are seen Processes are seen Reorganization of Processes are seen
as a collection of
as a collection of
processes of some
as a system of
separate, specialized separate units, in a
separate units, out of interdependent
units, in a functional functional hierarchy, the functional
processes linking the
hierarchy.
but cross-functional hierarchy, is seen as organization to
advantageous
customers and
Suppliers are pitted activities require a
coordinative
suppliers
Suppliers are
against each other to
mechanism.
obtain the lowest
consulted for critical Suppliers are
Suppliers
are
price
design information
partners with their
selected, based on
and given support in customers. Goal is to
performance to
efforts to develop
have few sup-pliers
obtain better quality improved products
and establish longand service at an
and services
term relationships
acceptable price
7
Results are pri Results are pri Results are stated in Results are stated as
marily stated
marily stated in
financial, market,
a balanced
financially
financial and market operating, quality
scorecard
terms
metrics
Any negative
Benchmarking and
Any
negative
Any
negative
deviation is a cause
historical comparisons
for corrective action deviation is a cause deviation is a cause are used for setting
and search for a
for corrective action for correction after goals, tracking, and
scapegoat
some investigation, improvement.
and development of Any negative
a new tracking
deviation is a cause
measure, if required for investigation
using existing goals
and metrics before
any corrective action
is taken
10.
This project suggests that the quality life-cycle of development, perhaps using Figure 9.4,
the Baldrige Roadmap to Performance Excellence, would provide a visual model of the process
for pursuing performance excellence from start to (Baldrige Award-winning) world-class
performance. Also, the IQS Best Practices Report could also be used to suggest which areas to
concentrate on at each stage. For example, organizations starting out on the road to performance
25
excellence can reap the highest benefits by concentrating on fundamentals, including:

departmental and cross-functional teamwork, training in customer relationships, problem solving
and suggestion systems, using internal customer complaint systems for new product and service
ideas, emphasizing cost reduction when acquiring new technology, using customer satisfaction
measures in strategic planning, increased training for all levels of employees, and focusing quality
strategy on building it in and inspecting it in. Once these fundamentals are in place, they can
move on to practices such as department-level improvement teams, training employees in problem
solving and other specialized topics, listening to supplier suggestions about new products,
emphasizing the role of enforcement for quality assurance, making regular and consistent
measurements of progress and sharing quality performance information with middle management,
and emphasizing quality as a key to an organizations reputation. Finally, organizations that have a
solid quality system in place can gain the most from providing customer-relationship training for
new employees, emphasizing quality and teamwork for senior management assessment,
encouraging widespread participation in quality meetings among non-management employees,
using world-class benchmarking, communicating strategic plans to customers and suppliers,
conducting after-sales service to build customer loyalty, and emphasizing competitor-comparison
measures and customer satisfaction measures when developing plans. The study also showed that
certain practices could have a negative impact on performance if applied inappropriately. For
example, organizations at the early stages of the quality journey do not benefit from process
benchmarking while those that have solid systems in place attain no benefit from increased
training. From there, questions from the Baldrige criteria could be sorted out and prioritized.
ANSWERS TO CASE QUESTIONS
Case - The Distinguished Ad Agency
1. Novedad and the Steering Committee made mistakes in the initial development of the protocols
and documentation and the early implementation stage because of the pressures to perform a
quick fix. Much of the documentation had been written by the quality manager and edited by
the president. Review by managers and supervisors, who were asked to implement applicable
elements in their departments, was minimal. Consequently, many of the procedures and
instructions did not reflect work realities. They depicted an ideal and were ultimately challenged
as supervisors and process operators tried to implement them. But, since the clock was ticking
and Megaproducts was threatening to cancel orders, implementation proceeded with promises of
a complete quality management system revision once improvements were in place.
2. Despite the fact that early implementation steps were handled well, with gaps and shortfalls
identified and proposed solutions recommended, implementation was chaotic. Because of time, it
was assumed that acceptance and adoption would be automatic. There were numerous indications
that things were not proceeding as planned. Managers, not wanting to appear unsure of their
changed responsibilities and authority, clung to the status quo. Trainingwhen donefocused on
lower level employees, which left supervisors without a good understanding of new requirements.
They were caught saying one thing but doing another. Interfaces between departments and
individuals, although described in an organizational chart and statements of authority and
responsibility, were not truly functional. System workflow faltered because new relationships and
26
interdependencies encountered old departmental barriers. Audit reports and corrective actions
languished because the president periodically overrode the quality managers authority, fearing
delivery promises might be compromised.
Indications such as the above were ignored because the steering committee members rationalized
that everyone knew what needed to be done, due to the fervent efforts exerted in solution finding.
Improvement efforts were not very effective because concluding steps were inadequately thought
through and poorly managed. Proposed solutions were not completely integrated into daily
activities.
3. Now that Novedad and the Steering Committee have received their wake-up call, a number
of steps should be taken to revise and implement an improved, workable quality management
system. These include:
a. Define the need for making improvements include communicating the scope of the problem,
types of complaints and errors being made, types of waste being experienced, and benefits of
improvements. This might be done by sending a letter from the president to all employees, and by
posting information prominently in work areas.
b. Develop and transmit the purpose for the improved quality management process it must be
brief; it should appeal to employees, customers, and stakeholders; and it must contain a
challenging, but attainable goal. This might be done by the Steering Committee by affirming the
mission and vision for the quality management process and
c. Identify work alliances and connections for implementation the Steering Committee might
meet with departmental representatives, informal leaders, and others to build trust and seek ideas
on how to structure improvement processes and projects.
d. Create a plan the Steering committee might revise the improvement plan, setting clear,
measureable goals with a timeline.
e. Empower people the Steering Committee should ensure that training is provided,
representative project teams are established, perhaps with teams electing their leaders, support is
given to overcome bureaucratic barriers, and projects are reported on regularly to provide
visibility and momentum.
f. Create opportunities for small gains if the Steering Committee can guide teams to pick the
low hanging fruit first, the small wins will lead to a sense of accomplishment and confidence to
tackle the more challenging problems. For example customer complaints might be handled, and
processes for preventing them might be developed.
g. Expand and complete projects projects bypassed in initial rounds of improvement, such as
analyzing and simplifying complex processes, might be taken on by mature project teams.
h. Reinforce the improved structures the Steering Committee should evaluate new organization
structures, monitor project team activities and results, celebrate accomplishments, and begin to
make the quality management process an integral part of the strategic and action planning
structure of the organization.
Case - Novel Connect - Leadership
27
1. The factors in the Organizational Profile that are the most important in evaluating their
Senior Leadership approaches are:
Purpose: Facilitates a world on the move. Vision: the most innovative company for mobile
communication in the world. Mission: leverages new and existing technology to advance
mobile communication. Core values: agility, valuing employees/partners, innovation, and
sustainability
Culture promotes core competencies of agility and communication: working out of the
home, flexible work schedules, and maximizing technology (cell phones, virtual meetings,
teleconferencing) to minimize travel.
4,188 employees make up a virtual, distributed workforce: 1,200 in innovation (sales,
R&D, marketing, IT, and product engineering), 2,738 in operations, and 250 in
administration and support. There is no employee union. Women compose 65% of the
workforce; 50% of employees are under age 40; for 20%, English is a second language;
and 15% are disabled.
Organizational structure: A nine-member Board of Directors (BOD) composed of eight
independent members and the CEO, four standing BOD committees, and a five-member
Senior Leader Team (SLT). The relatively flat organization has one rotating ethics officer,
and the 11 pods have team leaders.
Key suppliers/partners: two offshore manufacturing suppliers (in China and India), a cell
carrier, retailers, transportation companies, integrated component/software manufacturers,
universities, IT support, a security company, and a law firm
Strategic challenges: communication, rapidly changing customer/market needs (volatility
in niche markets), volatility of the overseas environment
2. Based on their response in Category 1 to the 2008 Baldrige criteria questions for this
category, Novel Connects strengths, weaknesses and opportunities for improvement are as
follows:
1.1 Senior Leadership
STRENGTHS
In 1994, Novel Connects Senior Leadership Team (SLT) conducted brainstorming and
planning sessions to establish the organizations vision and core values, which were refined in
1996, 2000, and 2002 and, along with the organizations mission, have undergone an annual
review since 2003. SLT members lead at least one project each year that exemplifies a core value
and also lead weekly discussions to explore the core value with employees. The Novel Path
(Figure 1.1-1) depicts the organizations leadership system, performance management process,
and organizational reviews and includes the mission, vision, and core values. It is deployed to
employees as part of the performance appraisal process (e.g., through the personal measuring of
action and performance [PMap]) and to customers and stakeholders through marketing materials,
funding events, and surveys. Partners are required to demonstrate the core values as part of the
partner selection process. In addition, the Novel Path is integrated with the strategic planning and
communication processes.
28
Senior leaders promote an ethical environment through numerous approaches, including

requiring employees to sign a Code of Ethical Compliance annually, assigning a rotating
Chief Ethics Officer from the SLT to investigate and solve ethical concerns, and developing Ethics
Examples that are discussed with all employees and key suppliers/partners during monthly
meetings. Written Ethics Examples are followed up with monthly ethics videos showing senior
leaders discussing the issue and conveying which response would most closely align with the
Novel Path.
Senior leaders create an environment for organizational performance improvement and the
accomplishment of the organizations mission and objectives through several systematic
approaches, such as the Performance Improvement Process (PIP), which includes the continuous
improvement cycle of Design, Measure, Analyze, and Improve (DMAI, Figure 6.2-1); mobile
monthly meetings (Triple-Ms); weekly operational reviews; and the deployment of objectives and
action plans to the workforce, suppliers, and partners. Innovation is encouraged through the
expectation for employees to spend 10% of their time on innovation, the use of the Innovation
Process to develop and select ideas, and rewards and recognition for innovative ideas and
acquisition of patents (e.g., the Pathways Innovation Award and Bright Idea Award). In addition,
as part of Novel Connects sustainability approaches (Figure 1.1-2), the Novel Path is integrated
into all leadership and workforce practices and decisions, and formal succession plans identify
three potential leaders for all leadership positions.
Senior leaders use a wide variety of communication mechanisms (Figure 1.1-4) to
communicate with and engage the workforce. Two levels of communication (with the
supervisor only and with the supervisor and work unit) occur each week for employees, and
each communication approach provides ways for employees to ask questions and suggest
other topics. Leaders have the primary responsibility for communicating with employees,
including sharing information on decisions and the rationale behind them.
OPPORTUNITIES FOR IMPROVEMENT
While senior leaders annually select up to three areas to improve in the leadership system, it is
not clear whether these include a systematic review and improvement of key leadership
approaches, such as processes to ensure ethical and legal behavior, to foster organizational
sustainability, and to facilitate organization-wide communication. Without systematic evaluation
and improvement in these areas, it may be difficult for Novel Connect to ensure it is meeting its
expectations of continuous improvement in all of its key processes, including how senior leaders
guide and sustain the organization.
It is not evident that communication methods are effectively deployed to all employees and to
all suppliers and partners, including overseas partners. For example, Spanish-speaking employees
are able to enter their ideas in Spanish into an entry screen in the companys Measuring Action
and Performance (MAP) database, but it is not clear whether meetings, newsletters, daily e-mails,
and video discussions are conducted in multiple languages for the 20% of the workforce who
29
consider English a second language, as well as for overseas suppliers in China and India. This may
inhibit Novel Connect from effectively addressing its key strategic challenge and core competency
regarding communication.
1.2 Governance and Social Responsibilities
1. For Category 1.2, the factors in the Organizational Profile that are the most important in
evaluating their Governance and Social Responsibilities approaches are:
Core values: agility, valuing employees/partners, innovation, and sustainability

The regulatory environment includes the Wireless Telecommunications Bureau (WTB) of
the Federal Communications Commission (FCC), the Occupational Safety and Health
Administration (OSHA), the Environmental Protection Agency (EPA), the Securities and
Exchange Commission (SEC), IPC-A-610, the International Organization for
Standardization (ISO), the Help Desk Institute (HDI), and the TL9000/QuEST Forum.
Organizational structure: A nine-member Board of Directors (BOD) composed of eight
independent members and the CEO, four standing BOD committees, and a five-member
Senior Leader Team (SLT). The relatively flat organization has one rotating ethics officer,
and the 11 pods have team leaders.
Serves only the U.S. market. Seventh-largest manufacturer of cell phones, with
approximately a 3% market share, and the fourth-largest supplier of ringtones. $3.25
billion in sales, with approximately 26.6 million phones sold in 2007. The focus is on
profit, rather than growth.
Key suppliers/partners: two offshore manufacturing suppliers (in China and India), a cell
carrier, retailers, transportation companies, integrated component/software manufacturers,
universities, IT support, a security company, and a law firm
Founded in 1994 as a private company; it went public in 2002.
2. Based on their response in Category 1.2 to the 2008 Baldrige criteria questions for this
category, Novel Connects strengths, weaknesses and opportunities for improvement are as
follows:
STRENGTHS
Novel Connect evaluates the performance of all senior leaders. The Board of Directors
(BOD) reviews the CEO/President annually, and she in turn consults with the BOD Executive
Governance Committee to review SLT performance. All leaders must participate in a 360-degree
feedback process, which provides the basis for behavior reviews. The BOD conducts annual selfevaluations with feedback from the SLT and in 2007 initiated an approach to obtain shareholder
feedback at its annual meeting. Using that feedback, the BOD selects up to two improvement
areas annually. Senior leaders use these reviews to improve their leadership effectiveness through
the use of PMaps. In addition, the SLT reviews an aggregate summary of all of its performance
reviews and selects up to three initiatives annually that are aimed at improving the leadership
system.
30
Novel Connect promotes and helps ensure ethical behavior in its interactions through multiple
approaches, including reissuing the ethics policy annually, requiring employees and suppliers to
sign the Code of Ethical Compliance, maintaining an ethics hotline, discussing Ethics Examples
scenarios at monthly meetings, terminating employment for ethical violations, and rotating the
position of Chief Ethics Officer among SLT members, a practice that has been featured in both
industry and national publications. These approaches assist Novel Connect in meeting its
workforce requirement of connection with the companys values.
Novel Connect actively supports its key communities through numerous approaches,
including a foundation established in 2002. The foundation provides funds for four primary
causes (i.e., mobility, environment, education, safety) that are aligned to the core value of
sustainability. Foundation processes are evaluated annually, and recipients must prove the
efficacy of their efforts. Other approaches include matching funds for employees charitable
donations and 16 hours of paid time off annually for community service. In addition, senior
leaders are expected to serve leadership roles in at least one national and two regional or
local nonprofit organizations that focus on work aligned with Novel Connects core values.
While SLT members participate in process improvement and operational performance reviews,
it is unknown how they systematically review and achieve fiscal accountability. For example,
systematic approaches are not described for achieving Sarbanes-Oxley Act (SOX) and Securities
and Exchange Commission (SEC) compliance, and it is not clear what financial data are reviewed
in monthly and weekly meetings beyond the two profit-specific measures in the Novel Compass
Scorecard. The lack of an effective process and tracking measures may make it difficult for Novel
Connect to ensure the protection of stakeholder and stockholder interests.
It is unclear how Novel Connect addresses the adverse impacts on society from partners and
suppliers operations associated with Novel Connects products and services. For example, it is
not apparent that the resource-sustaining approaches used in the U.S. manufacturing facility are
also used in the manufacturing plants in China and India. Additionally, there is no evidence of
systematic review and improvement of Novel Connects resource-sustaining processes, including
the key processes for addressing risks associated with its products, services, and operations (e.g.,
Go-Green/Grow-Green and Customer Advisory Groups [CAGs]).
Some of the approaches used to ensure ethical and legal behavior do not appear to be well
deployed and/or systematically improved. For example, while Novel Connect reviews
relationships and transactions in offshore facilities to ensure they comply with U.S. laws and align
with the Novel Path, it is unclear if the ethics investigation/resolution process is deployed to all
suppliers and partners. In addition, there is no evidence of reviews of or improvements in ethicsrelated approaches, including the ethics hotline, the Code of Ethical Compliance, and ethics
scenarios and follow-up discussions.
3. a. Specific advice for Category 1.1, that might help Novel Connect, would include:
31
the need to develop a systematic review and improvement of key leadership approaches, such
as processes to ensure ethical and legal behavior, to foster organizational sustainability, and to
facilitate organization-wide communication.
the need for implementing and effectively deploying communication methods to all employees
and to all suppliers and partners, including overseas partners. For example, Novel Connect should
insure that meetings, newsletters, daily e-mails, and video discussions are conducted in multiple
languages for the 20% of the workforce who consider English a second language, as well as for
overseas suppliers in China and India.
3. b. Specific advice for Category 1.2, that might help Novel Connect, would include:
need to develop a way to systematically review and achieve fiscal accountability. For example,
systematic approaches are not described for achieving Sarbanes-Oxley Act (SOX) and Securities
and Exchange Commission (SEC) compliance. Also, there is a need to review financial data in
monthly and weekly meetings beyond the two profit-specific measures in the Novel Compass
Scorecard.
need to develop a way for Novel Connect to address the adverse impacts on society from
partners and suppliers operations associated with Novel Connects products and services.
Additionally, there needs to be a process for systematic review and improvement of Novel
Connects resource-sustaining processes, including the key processes for addressing risks
associated with its products, services, and operations (e.g., Go-Green/Grow-Green and Customer
Advisory Groups [CAGs]).
need to ensure that ethical and legal behavior are well deployed to all suppliers and partners
and/or systematically improved. Also the company needs to ensure that a process for reviews of
or improvements in ethics-related approaches, including the ethics hotline, the Code of Ethical
Compliance, and ethics scenarios and follow-up discussions is developed and deployed.
For all of the above, tools and approaches may be found in the Baldrige
process, which specifically recommends that: Implementing Baldrige requires
repetitive cycles of self-assessment, priority-setting, action planning to address gaps and
opportunities for improvement, and reflection of results, all driven by an organizations vision,
strategic challenges, and capabilities.
Case - The Parable of the Green Lawn1
1.
This parable shows that many of the common failings of TQ

transformation efforts and attempts to improve business processes are
common to everyday experiences away from the job, as well. As
Source: James A. Alloway, Jr. "Laying the Groundwork for Total Quality," Quality Progress, 27,
1, January, 1990, p. 67.
1
32
"Pogo," the character who played the title part in a 1960's and '70's
cartoon series used to say, "We have met the enemy, and he is us!"
2.
Many common problems encountered on the path to TQ are contained

in this story:
Equating higher price with higher quality
Jumping right into a program without first preparing the
groundwork by finding and eliminating obvious system problems
that can prevent success
Trying to treat the symptoms, rather than the causes
Not having time to do the job right the first time but always having
time to redo it
Judging performance by isolated incidents
Copying tools and programs from others without understanding
their own process
Blaming other and things beyond your control when efforts fail
Expected results based on money and time, rather than on
effective use of resources
Believing that islands of success will spread without preparation
rather than realizing that a successful operation will become
unsuccessful if left unattended
Drifting from one program to another, hoping for a solution
Trying to purchase technological solutions to problems
Automating a process without first understanding it completely
Conversely, Ms. Slo did the following:
Carefully analyzed conditions that might contribute to her success.

First prepared the groundwork by finding and eliminating obvious
system problems that could prevent success
Treated the causes, not the symptoms
Took time to do the job right the first time so as to avoid redoing it
Did not judge performance by isolated incidents
Understood her own process, eliminating the need for copying tools
and programs from others
Expected results based on economical use of money and time,
rather than on ineffective use of massive resources
Continued to tend her spreading successful efforts, realizing that a
successful operation will become unsuccessful if left unattended
Showed constancy of effort, rather than drifting from one program
to another, hoping for a solution
33
Used appropriate technological solutions to problems
Case - The Yellow Brick Road to Quality

The quality analogies to Dorothys adventures are pretty clear.
A.
B.
C.
D.
E.
Dorothys call to action was precipitated by a crisis -- the tornado that transported her to
an alien land.
Managers at many levels find that there is a quality crisis in their part of the organization
that must be systematically dealt with. Often, they feel that they are in an alien land when
they are expected to lead their organization along the road to quality. Organizations need
to make backup plans if they are to avoid Dorothy-like disasters.
In the throes of a Kansas tornado, Dorothy is transported to an unfamiliar land. She is
lost and confused and uncertain about the next steps to take. She realizes she is in a
changed state -- the Land of Oz, and must devise a plan to get home.
Here, managers, most of whom are not at home with concepts of quality, such as
customer focus, employee participation, teamwork, and empowerment, management by
fact, or continuous improvement, must devise a plan to get home (become comfortable)
with these concepts and techniques. Strategic and action planning are both essential to
quality results.
Dorothy is a hero for killing the Wicked Witch of the East. Dorothy and Toto leave for Oz
via the Yellow Brick Road. Along the way, they are joined by Scarecrow, Tin Man, and
Lion. Through their teamwork, they provide mutual support and overcome many risks
and barriers to endure the vexing journey.
This suggests that managers are not alone in their search for the illusive goals of high
quality. However, the journey contains both breakthroughs and daunting challenges. Some
quality witches will be killed easily. Great strides can often be made by developing
teamwork, teaching quality tools, and implementing statistical process control. However,
other goals and breakthroughs are often more difficult to attain.
Dorothy and her entourage finally reach Oz and meet the Wizard. Rather than instantly
granting their wishes, the Wizard gives them an assignment -- to obtain the Wicked
Witch's broom.
As Deming often said, Theres no instant pudding! with quality. Often the most soughtafter goals are the most difficult to attain. You dont become a Baldrige Award winner by
having a single quality champion, screening out defects, and having a few team meetings.
Dorothy and company experience several encounters with near disaster while trying to
get the broom, including Dorothy's incarceration. In a struggle to extinguish the
Scarecrow's fire (incited by the Wicked Witch), Dorothy tosses a bucket of water, some of
which hits the Witch and melts her. Dorothy is rewarded with the broomstick and returns
to Oz.
This set of episodes has some interesting parallels with the quality journey. Managers who
are involved with quality efforts can sometimes get side-tracked and hung up with shortterm firefighting, such as union disputes, suppliers who dont understand the quality
issues, and/or have few resources or interest in developing a compatible quality system,
34
etc. However, managers can also get lucky, such as when lagging managers or teams
finally get it and become much more quality minded and helpful in making significant
improvements as team players. Such luck rarely happens unless goals and plans are
developed, deployed, aligned, and infrastructure that can capitalize on luck is in place
when it happens.
F. Returning to Oz, the group talks with the Wizard, expecting him to help Dorothy return to
Kansas. After defrocking the Wizard, they find out he does not know how. The Wizard
tries to use a hot air balloon to return and accidentally leaves Dorothy and Toto behind
upon takeoff. Glinda arrives and helps Dorothy realize she can return to Kansas on her
own with the help of the ruby slippers.
It is clear that the Wizard is an unscrupulous quality consultant selling the latest brand of
snake oil, while Glinda is the wise manager or helpful consultant who says, You have to
take the available tools and learn to do it yourself. Developing and deploying a quality
system, with continuing leadership, stretch goals, effective deployment, and ultimate
alignment, often requires a long and difficult journey along a winding road.
G. Dorothy awakens from her dream and experiences a new understanding and appreciation
for her home and family in Kansas. "Oh, Auntie Em, there's no place like home."
Quality can become a comfortable home only when people realize that the journey is
worth taking if a long-term perspective is adopted.
Bonus Materials
Quality in Practice: Leadership in the Virgin Group
1.
It is difficult to categorize such a free-spirited organization as following any known

management model. The lack of a formal mission or detailed management principles
would not seem to fit the basic requirements for a TQ focus. However, the firm seems to
have a firm belief in customer focus, employee involvement, and continuous improvement.
The first and second of those TQ principles are included in the Corporate Culture
statement. The third principle (continuous improvement) is spelled out under the subcategory of "Continuous Transformation and Change"
2.
Despite the fact that the organization is freewheeling and encourages creative
adaptation, it is likely that some strategic planning takes place. This is suggested by the
phrases: extremely competitive, strong executive role constellation, and Keiretsu-like
system, where companies act quasi-independently. Autonomy should not be a barrier to
oversight and long-range thinking, however. The process might be improved by
systematically having corporate managing directors meet periodically in order to discuss
plans, financial needs and business results with the top corporate executives at the Groups
headquarters in London.
3.
Strong leadership is suggested by the Strong executive role constellation under the
Leadership Style sub-category. Entrepreneurial and intrapreneurial organizational design
also suggests that creative local leaders in small autonomous units can, and are expected
35
to lead, manage, and accomplish goals. Leadership appears to be stronger than

management, thus suggesting that inefficiencies may occur as the various small companies
mature. More attention should be paid to the life cycle of each firm, in order to
determine whether there are non-productive units that should be pruned and to ensure
that there are not stars that are growing rapidly, but not being given proper financial or
management support.
4.
The theory that the senior leadership, about which little was specifically said, would
probably fit best into the emerging charismatic leadership theory. Bransons leadership
style is somewhere between creative and impulsive. Thus, he could also be said to be an
example of the charismatic leader.
Cases
Case - Equipto, Inc.
1.
In launching a major change to the corporate culture, careful planning

needs to be done. At Equipto, a personable middle manager was
chosen as division TQ director. Three days of training was given to top
management. Then division managers chose in-house facilitators and
local consultants to give three to five days of quality training. Teams
were pretty much on their own to develop projects during the first
year. Possibly, managers and workers could had been given just in
time (JIT) training on TQ principles and tools, while they were learning
to use them. Also, if managers had been required to use the tools and
approaches, and report on results at the same time that subordinates
were using them, it could have been very reinforcing.
2.
Details were not given on the content of the training, but it is likely
that it was more team based than SPC oriented because of Bob
Green's influence. Up-front training was very popular in the 1980's
(and still is in some organizations). However, the advantage of JIT
training is that team members can immediately put their skills into
practice and see results. The large scale training effort may have
caused the company to lose some momentum.
3.
SPC generally should be introduced to operating levels of employees

soon after they have learned problem-solving skills in their teams.
However, training and use must be tailored to the needs of
employees, so JIT training is preferable to up-front training. Employees
need to learn the basics of measurement and control, in addition to
instruction on teamwork, how to improve processes, and how to solve
problems. It was probably past time for Equipto to do so, since many
36
of their customers probably were technical people who could talk

intelligently about motor specifications and may have been concerned
about the impact of TQ on their products.
4.
It is certainly possible for TQ to be implemented successfully and to

have market conditions to turn down. TQ is no guarantee of corporate
financial success. However, if there is "constancy of purpose" in the
installation and application of a TQ process, long-run success has a
much higher probability with TQ than without it. For example, Wallace
Corporation, a Baldrige award winner, had to declare Chapter 11
bankruptcy due to the drop in oil prices and foreclosure by banks on
their business loans.
5.
The company should stay with its TQ focus. Frequently, corporations

that institute a TQ process quit too early, thus damaging employee
morale and losing momentum in quality efforts. Rather than a sudden,
wrenching change, Harry Rule should introduce JIT training in SPC. He
should not scrap EI teams, but should have local and corporate
steering committees to channel the efforts of the teams toward a
balanced emphasis on problem solving and control and performance.
CASE - LANB - Quality in Banking Case A

1.
LANB was established as a community bank in order to fill a gap that was obvious in a
non-typical small town in the USA. Los Alamos was built by the government to aid in the
development of atomic weapons during and after World War II. The government
infrastructure was unable to meet local needs after a peacetime environment and economy
was established, so a more normal banking facility was called for.
Senior leadership has modeled its commitment to the community through being involved,
personally and professionally in the community, and through their long-term commitment
to bank. Many of the senior leaders have been in place for more than 25 years with the
bank, indicating their personal commitment and stability.
The sense of community commitment is focused on quality and performance excellence in
numerous ways. Customer contributions to the community and loyalty to the bank are
recognized publicly in the bank lobby. In addition, the banks actions during the Cero
Gordo fire demonstrated their commitment to quality service, even under extreme
conditions.
2.
LANB focuses on employees as valuable assets. It empowers them to handle customer

complaints, gives them extensive training, and rewards them with fair compensation and
profit sharing in the same plan as senior management. In addition, senior management
37
breaks down the hierarchical barriers by not claiming traditional top management perks,
such as reserved parking places close to the building.
It is especially important for a service organization, such as LANB, to focus on employees
for the long-term quality and success of the business. It is known that employee
satisfaction is closely correlated with customer satisfaction, and that customer satisfaction
is related to customer loyalty. In addition, if a business, such as LANB, in a small town
develops a reputation as a good place to work, recruiting new employees to handle
expansion and attrition becomes much easier than would otherwise be the case.
3.
Technology supports the banks mission, as it strives to be more customer driven than its
competitors. It is organized to identify customer needs more readily and more accurately
and, then, to respond more quickly and more satisfactorily. Technology is essential to
handle the thousands of bank transactions that take place on a daily and weekly basis.
Therefore, ti must be considered a core competency. Without performance excellence in
the back office and on their website, customers will quickly lose confidence in the ability
of the bank to handle their financial transactions.
LANB - Quality in Banking Case B i

1.
LANB feels that a sustainability commitment is a good business practice for a number of
reasons. Customers in the region are a unique mix of highly educated scientists and
technicians and farmers, ranchers, Hispanics, and Native Americans. They all have a bias
toward sustainability and care of the environment. In addition, natural resources such as
water, energy, clean air, and good soil are increasingly difficult to develop and maintain in
the desert southwestern region. In addition, it makes smart business sense to save material
and other costs by reducing paper use, and recycling water, among other measures.
2.
LANB is moving beyond its core computational technology needed for everyday banking
transactions to green technology. It is making the effort to recycle water, reduce paper
waste through electronic communication, and reduce its carbon footprint through the
use of hybrid vehicles.
LANBs stated mission is to: Exceed the Expectations of our Customers, Employees and
Investors. Supporting the mission are and the values of Service Excellence, Valuing
People, Operating Efficiently, Remaining Flexible and Innovative and Supporting Our
Communities. Its sustainability commitment and the EcoSmart program are definitely in
line with the mission and values.
38
Case - Baldrige Assessment of Leadership Part 1

Assignment 1: For Item 1.1 the most important business or organizational factors relevant to this
item in the Organizational Profile are:
Mission, Vision, Values (MVV). Mission: A community-based food bank dedicated to
feeding the hungry residents of its communities. Vision: Iowa's heartland is hunger-free.
Values: We work together, we do what we say, everyone deserves respect, and we follow
through.
10.5 full-time equivalent (FTE) employees (8 full-time and 5 part-time); 8 of 13 employees
with bachelor level or above degrees, 5 employees with high school diplomas or associate
degrees
More than 500 volunteers, including a core team of 20 volunteers, contributed 28,600
hours in 2006. Volunteers include university nutrition and management students, government
and foundation fellows, and court-ordered community-service placements. Nearly half of
volunteers are over age 55.
Governance by a 12-member Board of Directors, including a county commission
representative and a rotating member agency position, with 5 subcommittees linked to
management functions
Major customer, stakeholder, and market segments and requirements:
a. Customers: member agencies. Requirements: timeliness; quality, variety, and
quantity of food; competency and consistency; access to nutritional food; and
continuity of service
b. Stakeholders: county, city, state, and federal governments; Food Banks of America
(FBA), the Food Bank Learning Collaborative (FBLC), and the Iowa Food Bank
Association (IFBA); the Regional Network of Food Relief Agencies; and
taxpayers. Requirements: accountability, cost efficiency, administrative cost
reduction, dependability, and flexibility
c. Community Segments: County residents, community groups, community leaders,
the Chamber of Commerce, businesses, education entities, and volunteers.
Requirements: effective response to emergency needs, cost efficiency, and
meaningful opportunities to serve
d. Donors/Suppliers: charitable foundations; corporations, grocers, and restaurants;
individuals; The Emergency Food Assistance Program (TEFAP); and corporate
contributors. Requirements: accountability; impact and integrity; a single point of
service for deliveries; predictability of operations; coordinated management of
donations; effective lead-time to meet requests; and proper food storage
Performance improvement system: Plan-Do-Check-Act (PDCA) Process
Assignment 2: The response to Item 1.1 had strengths and opportunities for improvement as
identified by an experienced team of Baldrige examiners:
Analysis of Strengths
39
The reasons why the examiners identified the 4 strengths as listed were because they clearly
corresponded to, and exceeded the basic requirements in the criteria. For example, in the set of
questions in Section 1.1 of the criteria, the questions that are raised have been strongly answered
by the applicant in their Baldrige application:
Strength 1 supplies the answer to this question.
a. (1) HOW do SENIOR LEADERS set organizational VISION and VALUES? HOW do
SENIOR LEADERS DEPLOY your organizations VISION and VALUES through your
LEADERSHIP SYSTEM, to the WORKFORCE, to KEY suppliers and PARTNERS, and
to CUSTOMERS and other STAKEHOLDERS, as appropriate? HOW do SENIOR
LEADERS personal actions reflect a commitment to the organizations VALUES?
In a similar fashion, strengths 2 and 3 supply the answer to:
a. (3) HOW do SENIOR LEADERS create a SUSTAINABLE organization? HOW do
SENIOR LEADERS create an environment for organizational PERFORMANCE
improvement, the accomplishment of your MISSION and STRATEGIC OBJECTIVES,
INNOVATION, competitive or role-model PERFORMANCE leadership, and
organizational agility? HOW do they create an environment for organizational and
WORKFORCE LEARNING? HOW do they personally participate in succession planning
and the development of future organizational leaders?
Strength 4 supplies the answer to this question.
b. (1) HOW do SENIOR LEADERS communicate with and engage the entire
WORKFORCE? HOW do SENIOR LEADERS encourage frank, two-way
communication throughout the organization? HOW do SENIOR LEADERS communicate
KEY decisions? HOW do SENIOR LEADERS take an active role in reward and
recognition programs to reinforce HIGH PERFORMANCE and a CUSTOMER and
business focus?
Analysis of OFIs
The reasons why the examiners identified the 3 opportunities for improvement (OFIs) as listed
were because the applicants responses did not correspond to, and/or meet the requirements in the
criteria. For example, in the set of questions in Section 1.1 of the criteria, the following questions
are raised, but the answers are not apparent in the Baldrige application:
For example the Criteria raise the question:
a. (2) HOW do SENIOR LEADERS personally promote an organizational environment that
fosters, requires, and results in legal and ETHICAL BEHAVIOR?
40
The applicants response brought this OFI from the examiner, in part: It is unclear how
senior leaders personally promote an organizational environment that fosters, requires,
and results in legal and ethical behavior. For example, the Executive Director is widely
acknowledged as a community leader in ethics; however, it is not clear that she or other
senior leaders follow a systematic approach to personally promote an environment within
the organization that requires and results in ethical behavior
OFI 2 relates to the question of:
a. (3) HOW do SENIOR LEADERS create a SUSTAINABLE organization? HOW do SENIOR
LEADERS create an environment for organizational PERFORMANCE improvement, the
accomplishment of your MISSION and STRATEGIC OBJECTIVES, INNOVATION,
competitive or role-model PERFORMANCE leadership, and organizational agility? HOW do they
create an environment for organizational and WORKFORCE LEARNING? HOW do they
personally participate in succession planning and the development of future organizational
leaders?
The examiner responded with this OFI, in part: While succession planning for the five key
leadership positions is addressed during biennial strategic planning, it is not clear how
senior leaders personally participate in the development of future organizational leaders.
Also, information is not provided concerning other aspects of sustainability, such as issues
related to the changing future business and market environment (including volunteer
availability) or a safe and secure environment
OFI 3 relates to the question of:
b. (2) HOW do SENIOR LEADERS create a focus on action to accomplish the organizations
objectives, improve PERFORMANCE, and attain its VISION? What PERFORMANCE
MEASURES do SENIOR LEADERS regularly review to inform them on needed actions? HOW
do SENIOR LEADERS include a focus on creating and balancing VALUE for CUSTOMERS and
other STAKEHOLDERS in their organizational PERFORMANCE expectations?
The examiner responded with this OFI, in part: While senior leaders make quarterly
reports on strategic action plans to board committees (Figures 2.1-1 and 2.2-2), review
Balanced Plate Scorecard metrics monthly (Figure 4.1-1), and review numerous other
indicators frequently (Figure 4.1-2), it is not clear how senior leaders include a focus on
creating and balancing value in their organizational performance expectations for
customers and stakeholders beyond the member agencies.
These strengths and OFIs do relate well to the Key Factors, listed above for Assignment 1. This
shows that the organizations mission, vision, and values must be aligned with their leadership
system in order to be effective.
Other strengths and OFIs may always be considered, so there is room for judgment. In the Stage
2 evaluation process for Baldrige consensus feedback to applicant, 6 or 8 examiners compare their
41
scorebook results on the strengths and OFIs for the same applicant. There is always a very high
level of agreement between examiners on the strengths and OFIs when independently prepared
scorebooks for the same applicant are compared.
Case - Baldrige Assessment of Leadership Part 2
1.2 Governance and Social Responsibilities
1. The most relevant business and organization factors from the Organizational Profile pertaining
to Item 1.2
In 2002, organization exited food pantry and soup kitchen services to focus on food
banking as core competency. Aims to provide best foods, at the right time, to the right
place.
Mission, Vision, Values (MVV). Mission: A community-based food bank dedicated to
feeding the hungry residents of its communities. Vision: Iowas heartland is hungerfree. Values: We work together, we do what we say, everyone deserves respect, and
we follow through.
10.5 full-time equivalent (FTE) employees (8 full-time and 5 part-time); 8 of 13
employees with bachelor level or above degrees, 5 employees with high school
diplomas or associate degrees
More than 500 volunteers, including a core team of 20 volunteers, contributed 28,600
hours in 2006. Volunteers include university nutrition and management students,
government and foundation fellows, and court-ordered community-service placements.
Nearly half of volunteers are over age 55.
Multiple regulating agencies and standards to protect food, workers, member
agencies; food safety and safety of employees and volunteers require tight controls
Governance by a 12-member Board of Directors, including a county commission
representative and a rotating member agency position, with 5 subcommittees linked to
management functions
2. Strengths that the organization has relative to the criteria questions include:
STRENGTHS
SFs governance system addresses key aspects of oversight through a variety of formal
reviews and reports (Figure 1.2-1) that include involvement by the board, senior leaders,
and board committees. Board committees include employees, volunteers, and,
occasionally, suppliers and member agencies, as appropriate. In addition to these various
methods, SF addresses the protection of stakeholder interests through the broad
involvement of internal and external stakeholders in the SPP (Figure 2.1-1).
Evaluation of senior leaders performance occurs at various levels. The board conducts an
annual self-evaluation to identify improvement opportunities, such as the creation of the
interlocking Leadership System Model (Figure 1.1-1) in 2004. The board is responsible for
42
the performance evaluation of the Executive Director, using a 360-degree approach that
includes the board, senior leaders, two employees and volunteers, and executives of two
member agencies. The other senior leaders are evaluated by the Executive Director in the
areas of accomplishing strategic objectives and professional achievement goals. The senior
leaders evaluate all employees and core volunteers.
SF identifies its key communities as those within its geographic service areas, choosing
activities linked to food or hunger. It supports these communities through education about
nutrition, hunger, and the food-insecure (Figure 3.1-2) and through the LDP, which is
open to volunteers, employees, and representatives of other community nonprofits. SF
also collaborates with other organizations in the Food as an Economic Engine for
Development (FEED) Partnership to provide safety-net services. Employees and all senior
leaders are provided with time off to volunteer for community outreach programs (Figure
1.2-2). SF also provides placement for people with court-ordered community service
sentences.
3. Opportunities for improvement relative to the criteria questions include:

While SF has developed an approach for evaluating senior leaders performance, there is
no indication of how senior leaders use the results of these reviews to further develop and
improve personal leadership effectiveness and the effectiveness of the leadership system as
a whole. Without a fact-based, systematic approach, SF may find it difficult to provide the
leadership necessary to achieve its vision: Iowas heartland is hunger-free.
It is not evident how SF anticipates public concerns with future products, services,
and operations. Additionally, while Figure P.1-3 outlines regulatory entities,
measures, and performance goals, there is no indication of the key processes used to
attain these performance levels. For instance, no processes are described to meet the
requirements and goals of the Internal Revenue Service (IRS) or The Emergency
Food Assistance Program (TEFAP). Proactive anticipation of concerns and processes
to address ongoing regulatory requirements may provide the opportunity to manage
regulatory requirements and stakeholder risks as part of a systematic approach
rather than attending to issues as they emerge.
While an employee appraisal form and orientation communicate SFs ethics-based

values, there is no indication of the effectiveness of the volunteer self-appraisal form
in enabling or monitoring ethical behavior. In addition, it is not evident what key
processes or measures for enabling and monitoring ethical behavior in governance,
operations, or stakeholder interactions are used other than an ethics hotline that
yielded only three calls in five years. This beginning of a systematic approach to
43
promote, ensure, and measure ethical behavior does not appear to be aligned with
the importance that the Executive Director places on this subject.
Adapted from: 2007 Annual Report of from Bill Enloe, TCC President and CEO. Source:
http://www.lanb.com/tcc/annual.asp

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CHAPTER 9

Leading, Building, and Sustaining

To emphasize that building and sustaining performance excellence requires effective

Leading, Building, and Sustaining Performance Excellence

business landscape. An important element of sustainability is ensuring future leadership;

To investigate the contemporary and emerging leadership theories include situational

To realize that an important aspect of an organizations leadership is governance the

To show that organizations adopt TQ to react to competitive threats or take advantage of

To develop understanding of the need for commitment from organizations senior

Leading, Building, and Sustaining Performance Excellence

To point out the importance of corporate culture -- defined as an organizations value

To understand the multiple approaches to designing an effective organizational

To introduce the concept of self-assessment the holistic evaluation of processes and

Leading, Building, and Sustaining Performance Excellence

Leadership Changes at Alcoa

Leading, Building, and Sustaining Performance Excellence

1. Company operational and organizational guidelines. Standard practices that have

Leading, Building, and Sustaining Performance Excellence

ANSWERS TO REVIEW QUESTIONS

Companies decide to pursue performance excellence for two basic reasons: a) as a

Leading, Building, and Sustaining Performance Excellence

A collection of personal leadership characteristics underlie these six competencies:

Leading, Building, and Sustaining Performance Excellence

Steering teams in leadership systems have the responsibility to provide leadership,

Leading, Building, and Sustaining Performance Excellence

The trait approach--Involves discerning how to be a leader by examining the

Emerging theories -- enhance or extend current theory by attempting to answer questions

Leading, Building, and Sustaining Performance Excellence

Committed leadership from top management.

Integration with existing initiatives, business strategy, and performance

Disciplined customer and market intelligence gathering.

Leadership in the trenches.

Continuous reinforcement and rewards.

Leading, Building, and Sustaining Performance Excellence

market, product/service, or technological opportunities and challenges. This is what an

Leading, Building, and Sustaining Performance Excellence

In the Baldrige criteria, alignment is defined as consistency of plans, processes, actions,

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence

Following up in self-assessment activities requires senior leaders to engage in two types of

Leading, Building, and Sustaining Performance Excellence

ANSWERS TO DISCUSSION QUESTIONS

Answers will vary, depending on the experiences of the students.

A concise summary of the principles on which modern, high-performing TQ organizations

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence

opposite conditions in many places throughout the organization. Interested readers

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence

advanced technologies, such as computer-and Internet-based learning and satellite

Amazingly, many colleges and universities would not be classified by

Leading, Building, and Sustaining Performance Excellence

SUGGESTIONS FOR PROJECTS, ETC.

Characteristics of leadership effectiveness should be identified by the students and may

Leading, Building, and Sustaining Performance Excellence

and supports high expectations for improving

This project will provide some interesting contrasts in cultural values,

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence

excellence can reap the highest benefits by concentrating on fundamentals, including:

Leading, Building, and Sustaining Performance Excellence

Leading, Building, and Sustaining Performance Excellence