Transforming Your Business
History
Transforming your Business to be a Leader in Customer Focus
In 1980, NBC presented a program called “If Japan can, why can’t we.” This documentary showcased the work of W. Edwards Deming, an American statistician, and his impact on the success of Japanese industry. Deming had been invited to Japan by the Union of Japanese Scientists and Engineers (JUSE) to assist in rebuilding Japanese industry after World War II.
The NBC presentation highlighted how Deming’s ideas and methods had contributed to the remarkable transformation of Japan’s manufacturing sector after World War II, presenting examples of Japanese companies, such as Toyota and Nissan, that had implemented Deming’s principles and achieved exceptional levels of quality and productivity.
Deming’s advice was based on what has become known as his 14 principles which can be summarized as follows:
These principles, which came to be accepted as the basis for Total Quality Management (TQM), emphasize the importance of a customer-centric approach, continuous improvement, teamwork, and employee empowerment to achieve higher quality, increased productivity, and long-term success.
There are two significant implications arising out of Deming’ teachings:
1. Quality should be built into how products and services are created and delivered, rather that inspecting for defects after the fact.
2. Whereas traditional management involved senior decision makersformulating strategy and objectives and then delegating the desired outcomes down the line, the new role of management needs to be mobilizing the intellectual resources of every employee to focus on delivering value to customers
Principal 1
Create constancy of purpose for improving products and services: Organizations should have a clear and unwavering focus on continuously improving the quality of their products and services.
Principal 2
Adopt the new philosophy: Management should embrace a new way of thinking that emphasizes quality, cooperation, and long-term success, rather than a focus on short-term profits.
Principal 3
Cease dependence on mass inspection: Instead of relying solely on inspection to detect defects, organizations should strive to build quality into their products and processes from the beginning.
Principal 4
End the practice of awarding business based on price alone: Organizations should consider the total cost of a product or service, including factors such as quality and long-term relationships, when making purchasing decisions.
Principal 5
Improve constantly and forever the system of production and service: Continuous improvement should be a fundamental goal, with a focus on constantly refining and enhancing processes.
Principal 6
Institute training on the job: Employees should receive appropriate training to acquire the necessary skills and knowledge to perform their jobs effectively.
Principal 7
Institute leadership: Effective leadership is essential in fostering an environment of collaboration, trust, and continuous improvement.
Principal 8
Drive out fear: Organizations should create an atmosphere where employees feel safe to express their ideas, concerns, and suggestions without fear of reprisal.
Principal 9
Break down barriers between departments: Collaboration and cooperation between different departments are crucial for achieving organizational goals and improving overall performance.
Principal 10
Eliminate slogans, exhortations, and targets for the workforce: Rather than relying on motivational slogans and targets, organizations should focus on providing the necessary resources, training, and support to empower employees to achieve their best.
Principal 11
Eliminate numerical quotas and management by objectives: Arbitrary quotas and targets can hinder quality and innovation. Instead, organizations should focus on supporting employees in achieving their full potential.
Principal 12
Remove barriers to pride in workmanship: Employees should take pride in their work, and organizations should create an environment that encourages and recognizes their efforts and achievements.
Principal 13
Institute a vigorous program of education and self-improvement: Continuous learning and self-improvement should be encouraged at all levels of the organization.
Principal 14
Put everyone in the company to work to accomplish the transformation: The principles of quality management should be embraced by everyone in the organization, from top-level management to frontline employees, to achieve meaningful and sustainable change.
The NBC Documentary
The NBC documentary emphasized several key aspects of Deming’s philosophy, including statistical process control, continuous improvement, customer focus, and the importance of employee involvement. It showcased how these principles, when properly applied, had led to improved product quality, reduced defects, increased efficiency, and enhanced customer satisfaction in Japanese companies.
The impact of the NBC presentation was significant, as it brought Deming’s ideas into the spotlight and captured the attention of American business leaders. It prompted many organizations in the United States to re-evaluate their management practices and embrace Deming’s principles as a means to improve their own competitiveness. It is interesting to note that in a study conducted by Fortune magazine during the 1990s, only about one third of the companies that attempted to initiate TQM were successful. The most common reason why success was not achieved was due to a lack of commitment on the part of corporate leadership. There are many anecdotal accounts of CEO’s contacting Deming after the program and suggesting that he meet with their company’s planning teams. In every case, he refused and said he would only meet if the CEO was involved. His view was that if the top decision make was not committed, there was no point in his attending any meetings.
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The exposure generated by the presentation helped popularize Deming’s teachings and led to increased interest in quality management and process improvement methodologies across various industries in the United States. Deming’s principles became the foundation for the quality movement, and his influence can still be seen today in practices such as TQM and Lean Six Sigma.
Goal/QPC, a consulting and training organization, has played a significant role in expanding the understanding and application of Deming’s teachings. They have been instrumental in promoting Deming’s principles and providing practical guidance to organizations seeking to implement them effectively.
Goal/QPC developed various training programs, workshops, and resources that delve into Deming’s teachings and help individuals and organizations understand and apply his principles in real-world contexts. Their work has focused on translating Deming’s sometimes complex concepts into practical tools and techniques that can be readily applied by businesses, including the creation of cross-functional teams (which together with their program on “Daily Management” led to companies focusing on their processes).
Through their training programs and workshops, Goal/QPC helped organizations grasp key aspects of Deming’s philosophy, including the System of Profound Knowledge, the Plan-Do-Study-Act (PDSA) cycle, statistical process control, and the importance of continuous improvement. They emphasized the role of leadership, employee involvement, and the creation of a culture of quality in the successful implementation of Deming’s principles.
They facilitated the dissemination of Deming’s teachings by publishing books, articles, and other educational materials that explore his concepts and provide practical guidance for their application. These resources have served as valuable references for individuals and organizations seeking to deepen their understanding of Deming’s teachings and improve their management practices accordingly.
One of Goal/QPC’s management training program, “Daily Management” focused on establishing effective daily routines and practices to drive continuous improvement within an organization. The program emphasizes employee engagement, problem-solving, and performance monitoring to achieve sustainable results.
Training Program
“Daily Management”
The key teachings presented in Goal/QPC’s “Daily Management” training program include:
The elements of this program establish a disciplined approach to daily operations, enhance employee engagement, drive problem-solving, and achieve sustainable improvements in performance. Although not mentioned elsewhere, it is reasonable to infer that the focus on the detailed elements of daily activities eventually led to recognizing that these activities were part of a process, the end result of which would be delivery of value to the customer.
Daily Routines
The program emphasizes the importance of establishing daily routines that prioritize problem-solving and continuous improvement. These routines involve setting aside dedicated time for addressing issues, monitoring progress, and identifying opportunities for improvement.
Employee Involvement
Daily Management encourages active involvement and engagement of employees at all levels of the organization. It emphasizes that employees are closest to the processes and can provide valuable insights and ideas for improvement. Empowering employees to participate in problem-solving and decision-making processes is a crucial aspect of the program.
Problem Solving Methodology
The program introduces structured problem-solving methodologies, such as Plan-Do-Check-Act (PDCA) or DMAIC (Define, Measure, Analyze, Improve, Control), to help individuals and teams address issues effectively. These methodologies provide a systematic approach to identify root causes, develop and implement solutions, and monitor the outcomes.
Key Performance Indicators (KPIs)
Daily Management emphasizes the use of key performance indicators to monitor and measure progress toward organizational goals. It guides participants in selecting appropriate metrics, setting targets, and tracking performance on a daily basis. This data-driven approach enables timely identification of issues and facilitates informed decision-making.
Visual Management
The program promotes the use of visual management tools, such as performance dashboards, visual boards, and standardized work instructions, to facilitate communication and understanding of performance metrics. Visual management enhances transparency, promotes accountability, and supports effective daily decision-making.
Continuous Improvement Culture
Daily Management fosters a culture of continuous improvement, where every employee is encouraged to contribute ideas and suggestions for enhancing processes and performance. It emphasizes that improvement is an ongoing, collective effort and encourages celebration of successes and learning from failures.
Deming’s Principles and the Emergence of Business Process Re-engineering
Deming’s 14 principles were primarily focused on improving quality and productivity in manufacturing processes. These principles gained significant recognition in the 1980s and emphasized the importance of customer focus, continuous improvement, and employee involvement.
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Business Process Reengineering (BPR) emerged as a management approach in the early 1990s, and was the subject of the book, “Re-engineering the Corporation” written by Michael Hammer and James Champy. Hammer, in his Process Seminars, commented that he did not invent BPR, but reported what he had observed in studying businesses that had implemented a change from a traditional business organizational structure to one that focused on processes. He observed that BPR radically redesigned and optimized an organization’s core business processes to achieve substantial improvements in performance, such as cost reduction, cycle time reduction, and quality enhancement. It challenged traditional ways of organizing work and advocated for radical changes rather than incremental improvements.
Hammer’s book, published in 1993, synthesized his observations about the development of a new management approach that advocated for the radical redesign and rethinking of business processes to achieve substantial improvements in performance. It described how organizations needed to fundamentally rethink their workflows, structures, and practices to adapt to changing business environments and leverage emerging technologies effectively. He showed how BPR went substantially beyond continuous improvement, showing that while continuous improvement is important, it was less than what businesses needed to succeed. His book made it possible for all businesses to become aware of and implement a change from a traditional organizational structure to a process-centred structure. While the core ideas behind BPR, such as process optimization and rethinking organizational structures, had been discussed and implemented in various forms before Hammer’s book, he played a pivotal role in bringing these concepts to the forefront of management thinking and popularizing the term “Business Process Reengineering.”
Hammer’s work drew attention to the need for organizations to challenge long-established practices and embrace significant changes rather than incremental improvements. His book showcased case studies and examples that illustrated how BPR had transformed companies and led to remarkable improvements in productivity, quality, and customer satisfaction.
It may be the case that the focus generated by the “Daily Management” approach on how businesses operate on a daily basis led to the recognition that businesses needed to focus on processes, and that the traditional departmental silo structure of the organization did not allow for this. Whether or not there is merit in this view, the timeline suggests that as TQM principles, in their application, evolved during the 1980’s, somehow, BPR emerged in the early 1990’s. It is reasonable to infer that Deming’s principles, as disseminated by Goal/QPC in its management education programs, influenced the development of BPR.
While Deming’s principles were not directly incorporated into the BPR methodology, some of the underlying concepts, such as the emphasis on customer needs and continuous improvement, align with the spirit of Deming’s principles. BPR practitioners recognized the importance of customer satisfaction and the need for process improvement. Additionally, BPR emphasized the need to empower employees and encourage innovation, another aspect that resonates with Deming’s principles.
BPR and Lean Thinking
One of the main drivers of the Process approach is eliminating non-value adding steps in a process, also referred to as “Lean Thinking.” This concept is derived from the Toyota Production System (TPS) which is focused on eliminating waste, improving efficiency, and continuously delivering value to customers. The principles of Lean Thinking include:
Value
Identify and define value from the customer’s perspective. Understand what customers truly need and are willing to pay for, and align all activities and processes to deliver that value.
Value Stream
Map the end-to-end value stream, encompassing all steps and processes required to deliver the product or service to the customer. Identify and eliminate non-value adding activities (waste) within the value stream.
Flow
Optimize the flow of work through the value stream. Minimize interruptions, delays, and bottlenecks to enable a smooth and uninterrupted flow of value from start to finish. Strive for a continuous and balanced flow of work.
Pull
Establish a pull-based system where work is initiated based on customer demand rather than pushing work based on forecasts or assumptions. Enable the downstream processes to pull the necessary work or resources from the upstream processes as needed.
Perfection
Pursue continuous improvement and perfection in all aspects of the organization. Encourage a culture of relentless improvement, where everyone is engaged in identifying problems, suggesting solutions, and making incremental improvements. Strive for perfection, knowing that it is an ongoing journey.
Respect For People
Place a strong emphasis on respecting and engaging people at all levels of the organization. Create an environment that encourages teamwork, collaboration, and empowerment. Develop and utilize the full potential of employees by involving them in problem-solving and decision-making processes.
Continuous Improvement
Embrace a mindset of continuous improvement. Encourage and support small, incremental changes (kaizen) that lead to significant improvements over time. Foster a culture of learning, experimentation, and innovation to drive ongoing enhancements.
Standardization
Establish standardized work processes and procedures that capture best practices. Continuously review and improve these standards to ensure they are effective and efficient. Standardization provides a foundation for improvement, consistency, and learning.
By applying these principles, organizations can streamline their operations, reduce waste, increase efficiency, and deliver value to customers. Lean Thinking focuses on creating a culture of continuous improvement, where everyone is involved in identifying and eliminating waste, enhancing processes, and improving customer satisfaction.
What Is A Process?
A process is a series of interrelated and sequential activities or steps that are performed to achieve a specific goal or outcome. It involves the transformation of inputs into desired outputs by following a defined set of procedures, rules, or guidelines. Processes can be found in various domains, including business, manufacturing, service delivery, software development, and many other areas. The standardization of these procedures is intended to and usually ensures consistency of output.
Here are some key characteristics of a process:
Goal Oriented
Processes are designed to achieve a specific objective or outcome. They have a defined purpose and are aligned with the broader goals of an organization or system.
Sequence of Activities
Processes consist of a series of activities or steps that are performed in a particular order. Each activity builds upon the previous one and contributes to the overall progress of the process.
Inputs and Outputs
Processes involve the transformation of inputs into desired outputs. Inputs can be tangible resources, such as raw materials or data, as well as intangible elements, such as information or knowledge. Outputs are the results or outcomes generated by the process.
Rules & Guidelines
Processes are typically guided by a set of rules, procedures, or guidelines that dictate how the activities should be performed. These rules help ensure consistency, quality, and efficiency in the execution of the process.
Interdependencies
Processes often have interdependencies, where the output of one process serves as the input for another process. These interdependencies create a flow of information, materials, or tasks between processes, forming a larger system or value chain.
Measurement and Control
Processes are monitored and measured to assess their performance, identify bottlenecks or inefficiencies, and make necessary improvements. Control mechanisms may be implemented to ensure that the process operates within defined parameters and meets the desired standards.
Continuous Improvement
Processes are subject to continuous improvement efforts. By analyzing process performance, gathering feedback, and implementing changes, organizations strive to enhance efficiency, effectiveness, and customer satisfaction.
Processes can be represented visually using various tools such as flowcharts, process maps, or workflow diagrams, which help illustrate the sequence of activities, decision points, and inputs/outputs involved in the process. These visual representations provide a clear overview of the process and aid in its analysis, optimization, and communication within an organization.