KEY INGREDIENTS FOR ORGANIZATIONAL EXCELLENCE

January 24th ,2017

Presented by:Desmond Mahadeo, Bsc. Eng, CQE, LSSBB

(Summarized from a presentation given at ASQ Toronto seminar)

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American Society For Quality

Section 405- Kitchener

KEY INGREDIENTS FOR ORGANIZATIONAL EXCELLENCE

April 21ST , 2015

Desmond Mahadeo, Bsc. Eng, CQE, LSSBB2

Presentation

Based on Experiential Learning and established

methodologies:

• Share what I learnt from experiences

• Look at concepts ..the “what”

• Execution ….the “how”

• Examples

• Success/failure

• Disclaimer and acknowledgements

• Sources of the concepts/ideas

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Organizational Excellence

Let’s talk about Excellence, what are your thoughts?

• What do you think it means?

• Why do we need it?

• Is mediocrity good enough?

(we can’t be all excellent,… after all)

• Is it a destination or a journey?

• Is there a cost associated with it? And if so, does the

benefit or value outweigh it?4

Scratch sheet of ingredients

Aggressive, Achievable goals Environment to sustain customer engagement

Effective vertical and horizontal communication

Factual Approach to decision making

Effective Change Management

Value diversity, including acceptance of radical thinking

Sarbanes Oxley, Good citizen, social, legal ,environmental Effective benchmarking

Succession Planning

Agility, respond quickly to challenges

Fully aware of strengths and weaknesses

Effective Quality data and information systems

Know the competitors Effective management of people, resources capacityCustomer-centric

Embrace new technologies, media Emergency recovery plan

Value employees, open culture, transparency

Learning Organization

Authenticity

Accountability at all levels

Value based, waste reduction

Develop effective measurements/metrics

Good vendor relationships

Identify and build core competencies

Train and develop people

Alignment throughout to vision Live by their “mission”

Formal evaluation and improvement process Empowerment of employees

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Organizational ExcellenceSo we all know the “what”….the question is “how”?

• Lets look again at the scratch sheet, what do we need to do to

achieve those on the list?

• If we look closely it is mostly people related or it depends on the

interaction of people within the organisation

• What jumps at us is the degree leadership* plays on setting the

tone

• Let’s look at it again- all the red’s; leaders have to provide /set

the tone and demonstrate

* Leadership (context)

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Scratch sheet of ingredients

Aggressive, Achievable goals Environment to sustain customer engagement

Effective vertical and horizontal communication

Factual Approach to decision making

Effective Change Management

Value diversity, including acceptance of radical thinking

Sarbanes Oxley, Good citizen, social, legal ,environmental Effective benchmarking

Succession Planning

Agility, respond quickly to challenges

Fully aware of strengths and weaknesses

Effective Quality data and information systems

Know the competitorsEffective management of people, resources capacity

Customer-centric Embrace new technologies, mediaEmergency recovery plan

Value employees, open culture, transparency

Learning Organization

Authenticity

Accountability at all levels

Value based, waste reduction

Develop effective measurements/metrics

Good vendor relationships

Identify and build core competencies

Train and develop people

Alignment throughout to vision Live by their “mission”

Formal evaluation and improvement process Empowerment of employees

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Organizational Excellence

Let’s look at the Oxford definition:Organization: An organized group of people with a particular purpose,

such as a business or government department

Organized: Arranged in a systematic way, especially on a large scale

“ Group of people arranged in a systematic way for a particular purpose”Excellence: The quality of being outstanding or extremely good

So lets play with this….

Organizational Excellence:Its about people within a system being extremely good or outstanding at achieving their particular purpose

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Organizational Excellence

Continuing, if we take this view:Organizational Excellence:Its about people within a system being extremely good or outstanding at achieving their particular purpose To accomplish this we need to focus on:• People – Leaders and followers

• Leaders have to define the clear purpose (vision, mission)

• System – create a system with processes to enable the interactions of leaders and followers to be outstanding in achieving their particular purpose

Point here is that we forget the People aspect and focus on Process to deliver value, we use the tools to improve processes and forget the impact on the system!

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An Old Story..

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Models for organizational excellence• Balanced Scorecard-Kaplan and Norton

• The Learning Organization - Peter Senge

• Malcolm Baldridge Award - USA

• Deming’s profound knowledge- Edward Deming

• ISO 9001:2008 – QMS Standard

• 5 pillars – Dr. H. James Harrington

• Domains of excellence - Dr. Karl Albrecht

• Versions Of Lean Enterprise - TPS

• Many…many…more

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MODELSSeven Domains of Excellence: Dr. Karl Albrecht• Strategic Focus• Customer Value• Leadership&Team

performance• Culture, value &Ethics• Process excellence• Talent management• Knowledgement

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The Balanced Scorecard: Kaplan & NortonAlignment of Vision, Mission and strategy into a comprehensive set of performance measures

• Financial

• Customer

• Internal Processes

• Learning and growth

Malcolm Baldridge: USA

• Leadership

• Information and Analysis

• Strategy

• Customers

• Process Management

• Human Resources

• Results

MODELSISO 9001:2008: ISO QMS

• Customer focus

• Leadership

• Involvement of people

• Process approach

• Systems approach to

management

• Continual improvement

• Factual approach to

decision making

• Mutually beneficial

supplier relationships13

5 pillars:Dr. Harrington

Pillar 1: process management

Pillar 2: project management

Pillar 3: change management

Pillar 4: knowledge management

Pillar 5: resource management

Deming’s Profound KnowledgeEdward Deming

• Appreciation for a

system

• Knowledge of

variation

• Theory of knowledge

• Psychology

MODELSLearning Organisation: Peter Senge, 5th Discipline

• Systems thinking

• Personal mastery

• Mental models

• Building shared vision

• Team learning

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Lean Management Systems “House of lean”: TPS

• True North (what should be done not what can

be done)

• Leader Standard Work

• Accountability processes

• Operational Standard work

• Visual Management

• People development

What theme do we see in the models?We see:• Leadership• Systems thinking• Measures• Knowledge Management• People – development, empowerment, engagement• Personal development• Change management• Communication• Team Building• Project management• Processes - Value and results

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Leadership

Systems Thinking

People

Process Excellence

Project Management

Personal Development

Team Building

Communication

Change Management

Summarised – My view…..

Value and Results

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Leadership

Leadership• Strategic focus• Set the direction, the vision• Transparency• Authenticity• Accountability• Respect• Enumerate how to achieve the vision• Provide support and resources• Establish the framework, norms, policies• Create the environment within which the culture of the

organisation can evolve to achieve excellence

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Strategic FocusStrategic focus:

– What is the vision?• Vision is where we are headed (future focused)

– What is the mission?• What business are we in?

– What does the strategy look like?• How is the vision/mission aligned to four areas ? (can

use “The Balanced Scorecard ”)

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• Transparency, Authenticity, Accountability, Respect Achieved by:

- Modeling consistent behaviours- Honest communication- Holding self and others accountable- Ensuring adequate resources and budget is provided to

achieve the objectives (not flavour of the month)- Reward and recognition

Leadership

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Scanning the environment:– PESTLE* analysis (relate to new

ISO Standard “context of organisation”)

– Levering on internal SWOT# analysis

– Drive Smart Objectives

*Political, Economic, Social, Technological, Legal, Environmental# SWOT- Strengths, Weaknesses, Opportunities, Threats

Leadership

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STRATEGIC THRUSTS Strengths

1. _________2. ________3. _________

Weakness1. ________2. _________3. __________

Opportunities1. ___________2. ___________3. ___________

CAPITALISE –

Firmly grasp opportunities using strengths

Build up –

Minimize impact of weaknesses in pursuit of opportunities

Threats1. ___________2. ___________3. ___________

Invest –

Counter threats by creatively extending use of strengths

Limit damage –

Reduce exposure of weaknesses to threats

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Strategy Mapping

FINANCIAL

Manage the Budget

MISSION

CUSTOMER

Internal and external

INTERNAL PROCESS

Select key processes

LEARNING &GROWTH

Enable the Human element

STRATEGY

How to control costs, eliminate waste and not operate at a

loss?

Which are the key processes to

focus on?

How do we create value for

customers?

How to manage growth and meet

ongoing demands?Is the strategy

aligned to the Mission?

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VISION

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Systems Thinking

Systems ThinkingThe organization is a whole system

A system is a collection of interrelated, independent processes that work together to turn inputs into outputs in the pursuit of some goal

“interdependency”

Ackoff- It is not the hand that writes, it is you that write

Goldratt – TOC; manage the interaction (not the actual parts)• Prevents “silo” mentality, fighting for resources among departments• Budgets need to be prepared with this in mind• Performance measures need to be established with this in mind. If

department “A” is @120% and the entire company is 67%...then??25

Theory of Constraints (simplified)Identify the Constraint

Manage the Constraint

Evaluate the performance

Repeat the process

Find the bottleneck, “exploit” or manage it. How do you increase the efficiency?Subordinate everything else, allow the constraint to be maximisedApply the fix, evaluate, is it eliminated?

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People – Development, Empowerment, Engagement

• Four generations in the workforce– Baby boomers post 1946– Gen X post 1963– Gen Y post 1976– Millennials post 1994

• Different approaches– Gen X- more individual (are in their 50’s and 60’s)– Gen Y more Team spirited like to band together, work has to

be fun, more impatience (30’s and 40’s)– Millennials – Technologically wired group (20’s)

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majority

From 75 to 18 yrs old (1945-1999)

Effective Managers focus on strengthsPeople – Development, Empowerment, Engagement

Focus on Weakness Focus on Strengths

Define performance by legislating required skills or competencies.

Define performance by legislating required skills outcomes. "What are we trying to achieve?, how can you achieve this?

Identify which skills or competencies employees lack and then plug the gaps

Identify each employee's strengths and use these to reach the desired outcomes

"Area of opportunity" is a euphemism for "area of weakness". Felt by the employee :• actually attacks their self esteem and

self worth, • creates a culture of fear of job loss or

promotions

"Area of opportunity" now becomes “Area of strength". Employee will be willing to share and contribute

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What are the results with this approach on the employees?- Feel ownership of their work, they manage the outcomes and are more eager to be creative-Produce higher quality of work- Empowered to solve problems and make decisions- Continuously improve process and services

People – Development, Empowerment, Engagement

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• DETERMINE THE DRIVERS OF ENGAGEMENT• LINK THE RESULTS TO BUSINESS OUTCOMES• TRACK ENGAGEMENT LEVELS

– the level of engagement people have to their job, career or profession – the level of engagement they have to their organization– Surveys to determine how:

1. satisfied they are with their current job and their organization as an employer2. committed they are to making the job and organization successful3. proud they are of their organization and the work they do4. willing they are to positively talk about their job and the organization

People – Development, Empowerment, Engagement

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If employees are engaged only to their job or profession, then they will not be aligned to organizational goals and strategy.

If employees are engaged to the organization but not their job, they will be aligned to organizational goals but will find it difficult to do their jobs well and to deliver extra discretionary effort in the work that they do.

People – Development, Empowerment, Engagement

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Process Excellence

Efficiency and Effectiveness:Doing Wrong things Wrong Doing the Wrong things Right

Doing the Right things Wrong Doing the Right things Right

PROCESSINPUT OUTPUT

EFFICIENCYHow we are converting

inputs?

EFFECTIVENESS How we are

achieving desired outputs?

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Knowledge Management

Knowledge ManagementProcess of creating value from intellectual capital and sharing that knowledge with employees, managers, suppliers, customers, and others who need itDeveloping and supporting a learning organisationManaging core competenciesData-Information-Knowledge-Wisdom• Tacit knowledge – not recorded, part of the intellectual asset pool, how to

capture and convert into explicit knowledge• Wisdom is derived from the collective database of knowledge, built from

experience, values, and expert insights. Wisdom provides the capability to exploit the use of the knowledge for informed decision making

A key to long-term success of any organization is the ability to differentiate itself from competitors.Caution: “The true sign of intelligence is not knowledge but imagination”.

- Albert Einstein35

Peter Senge’s Fifth discipline:Discusses Core disciplines:Personal Mastery – “live in a continual learning mode”Team Learning – “thinking together”

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Knowledge Management

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Change Management

Change Management

Beckhard’s equation:Dissatisfaction- create it , what is the “burning platform”?Vision- focus on the outcomesFirst steps- plans, resourcesIf any is zero, there is no change

Leading change Vs. Managing ChangeAgility, responseBased on confidence and trustLeader is not ‘travel agent”, (send people where they have never been before), instead marches ahead; clears the path and communicate the vision, where are we headed?

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Change Initiator

Early Adopters

Early Majority

Late Majority

Laggards

Willing to take risk on change

Waits to hear good anecdotes

Pragmatic: Wants anecdotal evidence Conservative:

Wants to see; Hold on

Skeptic: No Way

Change Management

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Not so much about change ….but the “D”.. rate of change

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Communication

What, How, When• Content• Vertical and Lateral• Appropriate use of technology• Verbal vs. Nonverbal• Communication tools and effectiveness

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• Open - all members feel free to share feedback, trust• Inclusive – Involve employees in decisions that affect their

day to day work• Two-Way – vertical and lateral, ideation, conversations both

formal and informal, prevents rumour machine• Results Driven – focused on achieving measureable results

through interaction and to serve as ambassadors outside of the organisations

• Multi-Chanelled – maintain consistency in the message using different media, increases saturation and reduces the downside of message being lost

Communication strategies

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Team Building

THREE STAKEHOLDER

GROUPS

Team BuildingBack to basics: (Tuckman’s model)1. Forming- Set the clear objectives2. Storming – Trust, resolve conflicts (use Disc or MB

to understand team members)3. Norming – Working together, recognition, team

building events4. Performing – delegate tasks , celebrate successes

– Use strategies to move the team through stages to performing

– May have to remove members

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Project Management

A Deadline is a Deadline !

PROJECT INITIATION

Sources:Data analysis

ideation

NEEDS ANALYSIS Cost benefit

Define project

TEAM FORMATIONSelect members Assign champion

STRATEGIC DEVELOPMENTProject Statement "problem that the project will solve"

EVALUATIONRisk analysis

Critical success factors

Identify barriers

PLANNINGResources, timeline,

milestones, cost, communication,

Gantt/WBS

ASSESSMENTProject Charter

Measures Approvals

EXECUTIONChampions manage

resources, get the work done, try alternatives

work to plan

MONITORINGProject Engineering

Facilitate solutions for deviations to plans, report on progress

COMPLETENESS CHECKS

Verify work is being completed

CLOSEOUTEvaluation of metrics

Were goals achieved?Establish actions to ensure sustainability

Things gone rightThings gone wrong

Project Management (my version) ‘PDCA’

Quality

Scope

CostTime

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Measures“What gets measured gets managed.” ..Peter Drucker “Not everything that counts can be counted, and not everything that can be counted counts.”

“Measure the wrong things and you will likely get the wrong behaviors”

“Without a standard, there is no logical basis for making a decision or taking

action” ..Joseph Juran

“When something is measured but it isn’t important, it probably won’t get

done”

“It is wrong to suppose that if you can’t measure it, you can’t manage it”-

Edward Deming (14 points; Eliminate work standards that prescribe numerical

quotas) 48

• Determine the important business priorities• Align with the Vision and Mission• Should convey meaning to entire organisation

– Example: Scrap/OEE/OTD

• Set meaningful objectives… “SMART” acronym

Measures

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Examples

• Established Company: KODAK• Company A:

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KODAK• WHY? Technology?- (digital era)• In 1975, a Kodak engineer – Steve Sasson, invented the digital

camera• As Sasson desperately wandered around the company trying

to convince senior executives of the potential of his discovery, he was met with the mindset of a company in love with the present.

• Fuji Films - facing exactly the same predicament as Kodak - has managed to survive and thrive in the same business climate that drove Kodak to ruin

• So Why? Combination of factors- Leadership, Vision, lost touch with Customer, resistance to change

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Design, engineering, processing, and manufacture of thermoplastic products in North America.Three segments: Custom Products, Outdoor Living Products, and Film Products. The Custom Products segment: Industrial OEM’soriginal equipment manufacturers in window fashion, office furniture, consumer electronics, transportation, home appliance, residential furniture, recreation vehicle, and leisure/fitness industries.

The Outdoor Living Products segment: Wood replacementwood replacement products for building products market and outdoor spa market. Decking, railing, and fencing products to the home centre, lumber retailer, and professional installer distribution channels. Cladding as skirting for outdoor spas, spa steps, surrounds, privacy screens, and other accessories to spa manufacturers and dealers in the spa channel.

The Film Products segment: Garbage/Plastic bagsBranded and private label household garbage and foods contact bags, as well as kitchen garbage bag holders through Canadian mass merchant, grocery, drug retailers, commercial customers in the food services and janitorial industries in the United States.

Company A

Company A• Retreats• Training• Picnics staff parties• Family outings• Coffee /juice• Subsidized cafeteria• Family feel• Acceptance/diversity..• Profitable• Processes• Right people

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1987 1992 1994 1998 2000 20012004 2005 2006-2007 2009

AcquisitionT-mold/after

market100 persons

Company AVision – Best in Class Custom Plastics Extrusion Company, to be on TSX by 2000. Mission- Manufacturer of Value added Custom Extrusion PlasticsStrategy – Aggressive acquisition

AcquisitionOEM Mfg.

GE300 persons

AcquisitionOEM Mfg. to Automotive600 persons

ISO/QS

TSX

AcquisitionPlastic bag

800 personsCreated

Divisions – 7 plants

New Plant in USAMerged plastic

bag plantsTotal 6

plants>1000 persons

New plant for Chrysler

program

First signs

of trouble

Bankruptcy

<$7M $$$$M

2008 Auto business declineOil prices risingDecking businessFurniture Business

“50 Best managed Companies”-1998 to 2004

Made mistake of hiring wrong type of manager… Union… ended up in court paid them off a $1MNepotism…in new venture

Company AWhat went wrong????- Excellent employee engagement - Great culture- Good talent management- Internal Growth- Benefits- had all the things on the scratch pad…. But as time went on…

MOVED AWAY FROM CORE COMPETENCIES, UNCONTROLLED GROWTH, DISCONNECTED AS they GREW…Vision no longer relevant, failed to changed (agility)Economic forces- Profitability declinedGrowth was not managed wellStarted to lose engagement

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ORGANIZATIONAL EXCELLENCE

No Magic potion!

• Leadership has to maintain profitability as an outcome, balance growth, and ensure employee engagement

• Excellence is a Journey , a continuous fluid state, not a Destination

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Excellent firms don't believe in excellence - only in constant improvement and constant change. - Tom Peters

REMEMBER

Organizational Excellence:–Its about people within a system

being extremely good or outstanding at achieving their particular purpose

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THANK YOU!

Henry Ford:

You can take my factories, burn up my buildings, but give me my people and I’ll build

the business right back again.

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Desmond Mahadeo, Bsc. Eng, CQE, LSSBB