Total Improvement

Management –(TIM)
H. James Harrington
CEO,
Harrington Institute
 H. James Harrington
Chief Executive Officer
Harrington Institute, Inc.

The New York Times referred to him as having a “…knack for synthesis and an open mind
about packaging his knowledge and experience in new ways -characteristics that may matter
more as prerequisites for new-economy success than technical wizardry…”

Harrington now serves as CEO for the Harrington Institute, Inc. (HI). HI is an international
consulting system consisting of three divisions: Management Solutions, Technical Solutions,
and the Harrington Academy. He is past president and chairman of ASQ, and the
International Academy for Quality. He has published more than 25 books in over 10
languages and hundreds of articles. He has four quality awards named after him and has
been elected as an honorary member of five quality societies. Harrington was made the
honorary quality advisor to China in the 1980s and has received many awards for his efforts
to improve performance.

Harrington is recognized as one of the world leaders in applying performance improvement

methodologies to business processes. He has written regular columns for the Quality Digest
Magazine and is on the Editorial Review Board for five magazines.

Contact Harrington at his e-mail address: hjh@harrington-institute.com.

“Don’t start an improvement
process to improve customer
satisfaction or employee morale.
Yes, it will do that, but the real
reason you need an improvement
process is to increase PROFITS.”

Dr. H. James Harrington

 Delivered Performance Versus
Customer Expectations
High

Expectation Gaps

Delivery Gaps
Rating

Low
Telecom- Banking Insurance Delivery Electric Automotive
munications Service Utilities
Investment High Airlines Hotel Auto Household
Technology Rental Appliances
Industry
Expectations (Ideal) Perceptions Best Firm Perceptions Average Firm
 Ford Motor Company
Quality Improvement Plan
• Slogan contest - “Quality and demand go
hand-in-hand”
• Poster campaign - Ford and suppliers - pride
in individual performance
• Monthly quality control publications - give
credit for achievements
• Plant achievement awards
 Ford Motor Company
Quality Improvement Plan
(cont’d)
• Statistical quality control - to get products
better than the best
• Management and employee training
• Supplier improvement
• Supplier training on SPC
 Why Highlight Ford’s
Improvement Process?

• These were improvement activities at Ford

in the late 1940s, as reported in a 1950 issue
of Industrial Quality Control
 Improvement Curve
A
High
I
M
P
R
O
V
E
M
E
N
T
S
Low
1 2 3
Year
Two Identical Improvement Curves
A B
High
I
M
P
R
O
V
E
M
E
N
T
S
Low
1 2 3
Year
 Confusion Reigns Supreme
• Philip B. Crosby’s 14 Steps
• Dr.W.Edwards Deming’s 14 Points, or new
and different 14 Points of “Profound
Knowledge”
• Dr. Armand V. Feigenbaum’s 10 Benchmarks
for Quality Success
• Dr. Joseph M. Juran’s Step-By-Steps
Improvement
• Dr. Kaoru Ishikawa’s Six Categories for
Transformation
 The Competition for Resources
Total
Quality
Total Management Total
Productivity (TQM) Resource
Management Management
(TPM) (TRM)

Total Total
Cost RESOURCES Technology
Management Management
(TCM) (TTM)

RESULT
Improvement Methodology
Relationships
TBM
TRM
TTM

3 4 3
T T
C 4 4 Q
M 3 4 3 M

TPM
The Total Improvement
Management Pyramid
Rewards
Organizational
Impact

Delivery Processes

Basic Concepts

Direction

Value to Stakeholders
The Total Improvement Management Pyramid

Rewards
&
Recognition

Organizational
Measurements
Structure

Process Product Service

Breakthrough Processes Processes

Management Team Individual Supplier

Participation Building Excellence Partnerships

Top Environmental External Quality

Management Business Change Customer Management
Leadership Plans Plans Partnerships Systems

Value To Stakeholders
 The Total Improvement
Management Pyramid

Top
Management
Leadership

Value to Stakeholders
Who has the greatest impact
on employee involvement in
the Improvement Process?

• Top Management 50%

• Middle Management 26%
• First-Line Supervisors 19%
 Top Management Action

• Personal performance measurements

• Communicate personal and organizational
beliefs/ values
• Set a new performance standard
• Publish Policy Statement
– “No-Layoff” policy
– Improvement policy
 Display Personal Values
• John D. Rockefeller’s
Management Creed (2 of 11):

“I believe in the supreme worth of the individual and in

his right to life, liberty, and pursuit of happiness.

I believe in the dignity of labor, whether with head or

hand; that the world owes no man a living, but that it
owes every man an opportunity to make a living.”
 Typical Improvement Policy
Statement
“We will constantly improve our quality,
productivity and creativity, allowing us to provide
on-schedule products and services that represent the
best overall value to our present and potential
customers. Our improvement process’ objectives are
to increase our volume of business, thereby providing
greater job security to our employees and better
return on investment for our stockholders.”
 Management grossly
underestimates what waste is
costing them. It runs:

R&D 78%
Accounting 52%
Sales 80%
Manufacturing 15%
 The Total Improvement
Management Pyramid

Top
Business
Management
Plans
Leadership

Value to Stakeholders
 The Three Purposes
of Business Planning

Directions

Expectations Actions
 Business Planning Elements and Timing

PURPOSE 11 OUTPUTS TIME FRAME

Direction Visions 10 - 20 years

Mission Open-ended
Values Open-ended
Strategic focus 5 years
Critical success factors 3 years

Expectations Business Objectives 5-10 years

(measurements Performance Goals 1-5 years

Actions Strategies 1-5 years

Tactics 1-3 years
Budgets 1-3 years
Performance Plans 3-12 months
 The Total Improvement
Management Pyramid

Top Environmental
Business
Management Change
Plans
Leadership Plans

Value to Stakeholders
Typical Business Drivers
• Leadership and Support
• Customer Partnerships
• Business Processes
• Training
• Knowledge Management
• Measurements
• Supplier Partnerships
 Business Drivers Change Plan
Phase I Phase II Phase III Phase IV

Assessment Vision Performance Desired

Statements Goals Behavior

Phase V Phase VI Phase VII Phase VIII

3 - Year Combined 90 - Day Implementation

Plans 3 - Year Plan Action Plan
 Total Improvement Management

Individual 3-Year Improvement Plan

Key Performance Drivers: Management Support/Leadership
Activity MONTH QUARTER Person
#
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 1 2 3 4 Responsible
1.0 Teams
1.1 Establish Task Teams EIT
1.2 Develop Training Plan & Budget for EIT Task Team
1.3 Implement Training Plan Division President

2.0 Start Departmental Improvement Teams Department Manager

3.0 Develop Strategic Direction Sam K.

3.1 Communicate to Management
3.2 Communicate to Employees

4.0 Performance Planning and Appraisal

4.1 New Appraisal Process Joe B.
4.2 Communicate Plan to Management Joe B.
4.3 Communicate Plan to Employees Division President
4.4 Implement Plan Management

5.0 Measurement/Feedback
5.1 MBWA Division President
5.2 Employee Opinion Survey H.I.
5.3 Feedback Results H.I.
5.4 Re-survey H.I.

6.0 Suggestion System

6.1 Establish Task Team Sam K.
= Action
= Ongoing Activity
Trinidad and Tobago
A Quality Nation Plan

• 20 Year Visions
• 4 Year Objectives
• 1 Year Activities
• 90-Day Plan
 Trinidad and Tobago
A Quality Nation Plan

Objective:
To accomplish in 10 years what
Singapore did in 25 years
 A Quality Nation
• Identified 18 Potential Stakeholders
• Identified 20 Year Vision Phrases for 6 Primary
Stakeholders’ Groups
• Identified 27 Four-Year Objectives
• Identified 7 Highest Objectives
• Developed One-Year Action Plans
• Formed Organizational Structure
• Developed a 90-Day Action Plan
The four key project management
factors
PEOPLE

PROCESS TECHNOLOGY

KNOWLEDGE
Research confirms that as much as 60
percent of change initiatives and other
projects fail as a direct result of a
fundamental inability to manage their social
implications.

GartnerGroup
The Magnitude of IT Driven Change
First-Order Second-Order Third-Order
Magnitude Magnitude Magnitude

Tasks Affected
+ People Affected
+ Structure/Culture
Affected

Culture Technology Culture Technology Culture Technology

Structure Technology Structure Technology Structure Technology

People Tasks People Tasks People Tasks

Source: O’Hara, Watson & Kavan

The Total Improvement Management Pyramid

Top Environmental External

Business
Management Change Customer
Plans
Leadership Plans Partnerships

Value to Stakeholders
External Customer Focus

• Executive Contact
• Remote Employee Contact
• Complaint Handling
• Getting Suggestions
• Design for Customer Satisfaction
• Strategic Customer Partnerships
The Total Improvement Management Pyramid

Top Environmental External Quality

Business
Management Change Customer Management
Plans
Leadership Plans Focus Systems

Value to Stakeholders
With ISO-9000
With TQM
With TIM
The Total Improvement
Management Pyramid

Management
Participation

Direction

Value to Stakeholders
 Why Management First?
• Allocating resources
• Establishing the organization's structure
• Selecting the leaders
• Developing the processes
• Setting performance standards
• Making job assignments
• Preparing the job description
• Providing the measurement and reward systems
• Setting priorities
• Selecting and training employees
 Summary
• Don’t involve the employees until management:
– Has corrected the major management problems
– Has embraced the new ways
– Is capable of teaching the necessary tools
– Is willing to give up controls
– Is willing to share their power
– Is willing to trust their employees
– Has made a personal commitment to change
The Total Improvement
Management Pyramid

Management Team
Participation Building

Direction

Value to Stakeholders
 Area Activity Analysis
Department Activity Analysis

• Mission/major activities
• Customer requirements
• Value-added analysis
• Supplier analysis
 The Cascading
Customer/Supplier Model
Agreed-to Agreed-to
Requirements Requirements
Supplier Inputs Customer Supplier Inputs Customer

Feedback on Feedback on
Performance Performance

Feedback on
Corrective Action/Improvements
Performance Board

Performance Photo of
Projects the team

New
•NWT names
Ideas
•Area mission statement
•Customer list
•Board posting procedure
•Letters from customers

Improvement
Ideas Plans
in
Progress
 Individual
Excellence
Value To Stakeholders

• Job Training • Improvement Effectiveness Programs

• Career Planning • Speak-Up Programs
• Cross-Discipline Training • Creativity Training
• Suggestion Programs • Empowerment
• Building Risk-Teams
Supplier
Relations
Value To Stakeholders

• Materials Goals and Strategies

• Supply Management Model
• Supplier Measurement Systems
• Just-In-Time
Our Suppliers Certainly Run a
Close Second
The Total Improvement
Management Pyramid

Process
Breakthrough

Basic Concepts

Direction

Value to Stakeholders
 Business Process
Improvement
• Systematic Breakthrough
– Process Reengineering
– Process Redesign
– Benchmarking
• Rapid Breakthrough
– FAST (Fast Action Solution Teams)
– HIT (High Impact Teams)
 Process Redesign
• 80 to 100 days for the future state design

• Cost and cycle time reduction 20% to 60%

• Quality improvement 40% to 100%

• Correct answer 60% to 80% of the time

 Process Reengineering
• 9 to 12 months for the future state design

• Cost and cycle time reduction 60% to 90%

• Quality improvement 20% to 100%

• Correct answer 5% to 15% of the time

 Benchmarking
• Often used in conjunction with Process
Redesign and Process Reengineering
• 3 to 4 months for the future state design
• Cost and cycle time reduction 20% to 50%
• Quality improvement 10% to 150%
• Correct answer 5% to 15% of the time
 Three Types of Breakthrough
0
5

10

Cycle 15 Benchmarking
Time 20
Process
25 Redes ign

30 Process
Reengineering
35
0 6 12 18 24 30 36
Months
© 2007, Harrington Institute, Inc.
Product
Processes

Value To Stakeholders

• Express • Product Benchmarking

• Process Qualification • SPC
• Continuous Flow • Information Technology
• One-Minute Changeover • Computer-Aided Process Planning
• Error-Proofing • Computer-Aided Manufacturing
• Equipment Benchmarking • Computer-Aided Acquisitions
Service
Excellence
Value To Stakeholders

• Empowerment • Error-Proofing
• Competitive Shopping • Cross Training
• Customer-Related Walk-Through • Backup Systems
• Service Benchmarking • Express
• Customer Roundtables
The Total Improvement
Management Pyramid

Measurements

Delivery Processes

Basic Concepts

Direction

Value to Stakeholders
 Measurements

Value To Stakeholders

• Balanced Scorecard • Stakeholder Needs Assessment

- Activity Measurements - Activity and Measurements
Based Costing, Error Rates, • Malcolm Baldrige National Award
Yields, etc. • IS Measurements
- Improvement Results
• Customer Data Analysis
- Performance (Business) Results
• Poor-Quality Cost
The Total Improvement
Management Pyramid

Measurements Organizational
Structure

Delivery Processes

Basic Concepts

Direction

Value to Stakeholders
ORGANIZATIONAL ALIGNMENT
Strategy

People Structure
Practices

Rewards Processes &

System Capabilities

© 2007, Harrington Institute, Inc.

The Total Improvement
Management Pyramid
Rewards
Organizational
Impact

Delivery Processes

Basic Concepts

Direction

Value to Stakeholders
Five Major Types of Recognition

1. Financial compensation
2. Monetary awards
3. Personal public recognition
4. Group public recognition
5. Private recognition
 The long road to Excellent

But who wants to just be average? I don’t. Do you?

 The Real Secret of the Great
Organizations
• High Standards
• Constructive Dissatisfaction
• Customer Focus
• Quality Before Cost and Schedule
• Respect for the Individual
• Better R.O.I.
 Middle East Benchmarking
Clearing House
• The Emirates Of Abu Dhabi Executive
Council has just established a International
Middle East Benchmarking Clearing House.

• It is scheduled to be fully operational by

Sept. 2007
Types of Organizational Structures
• Vertical
• Bureaucratic
• Decentralized
• Matrix
• Network
- Case Management
- Horizontal (Process)