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Organization-Wide Improvement

Dean wrote:

>There is nothing in TQM which adds focus to organization wide

and Neil responded:

>I guess we need to agree on a definition of organization-wide improvement.
>The organization-wide focus I see in companies are major cross-company
>process improvements like Product Development or Order Fulfillment and
>getting an entire company acting and making decisions that are more
>customer focused. Sounds pretty organization-wide to me.

"Organization-wide improvements," in my mind, are those that help the organization achieve more of its goal and set it up to go on to higher levels of capability with regard to that goal.

Organization-wide improvements must be considered in terms of the goal of the organization.

A for-profit organization's goal is the prerogative of the owners/investors and is typically and appropriately stated as "making more money now and in the future." To accomplish this requires that attention also be paid to certain "necessary conditions," such as 1) providing more satisfaction to customers (the market) now and in the future and 2) ensuring that the firm's associates are provided with secure and satisfying employment both now and in the future.

Therefore, organization-wide improvements for for-profit organizations are those improvements that maximize profits for owners/shareholders while satisfying customers and protecting employees. Non- and not-for-profit might shift the relationship between the goal and necessary conditions. For example, the goal of a hospital might be to provide quality healthcare to the community (customers), which requires making enough money to keep the operations going now and invest for future services as well as keeping the staff from burning out.

I believe this is completely consistent with Deming, et al. For example, the protection of employees directly relates to the need to drive out fear. If you put too much or too little emphasis on any one of these three legs of the stool (profits, customers, employees), the stool becomes awful unstable and uncomfortable. {As an aside, I'd like to assert that, to some extent, there are cause-and-effect relationships between profitability, customer sat, and employee security, but they are complex interactions and can not be taken for granted or simplified to slogans.}

TQM is primarily "process-oriented." SPC tools, the idea of inpout-process-output, satisfaction of internal process customers as well as external paying customers, and common TQM problem-solving tools are well-developed and highly appropriate for strengthening the links of the value chain. Neil's comments about Product Development and Order Fulfillment reflect this. When thinking about the whole organization, TQM easily extends to the thinking of BPR and Process Management, all of which correctly recognize that cross-functional processes are the way to go to assess and maximize effectiveness. But while such meta-processes have "organization-wide scope," how can we assure that addressing them provides "organization-wide improvements" defined as bottom-line (goal-related) results?"

My intimate experience with a 2-time Baldrige winner, along with much of what I have studied and read in venues such as this list, results in the observation that the application of TQM and Process Management is typically done in a pervasive, organization-wide manner. All processes are subject to improvement efforts. Layers of cross-functional improvement teams, with their metrics, objectives, etc, are set up to assess, develop, and implement those improvements. Significant time and effort is put in at the individual process level to reduce variability and beef up the capabilities of all the links of the value chain -- all the processes and sub-processes. As Neil alluded to a Feigenbaum comment at the end of his post:

>...snip...quality management is not just for the manufacturing
>department - all departments can benefit from it.

But the question is...Can the organization benefit from what benefits a department? Which improvements will have the most, and quickest impact on the organization as a whole? How do we assure that our improvement efforts are not only effective at the process level, but also efficient at the "organization-wide" level? How do we allocate scarce time, effort, and money on processes that get us the most "bang-for-the-buck?"

TQM, while powerful in the endeavors I have described, provides minimal direction for where emphasis should be placed at a macro level -- where and how efforts should be concentrated -- where and how to apply scarce resources to the improvement efforts for the organization as a whole. When pressed with the need to address such alternatives, TQM often relies on a philosophy of "acting and making decisions that are more customer focused" to assure that an appropriate direction is taken. However, when working to improve some deeply internal process in the bowels of the organization, or some support process on the far periphery of the value chain that eventually connects to the external customer, it is difficult, if not impossible, to identify and quantify customer impact. Sometimes, in an effort to augment the power of TQM with some additional direction and focus, an organization overlays TQM efforts with strategic plans and directions that cascade through the organization via Policy Deployment/Hoshin Planning or variations on the old Management-By-Objective route.

But what do we base the strategy on? How do we direct processes to act and improve? How do we determine the focus of "organization-wide improvement?" How do we avoid the deterioration of global goals to local optimization? A TQM mindset sometimes (and more commonly than we'd like to admit) falls back on the oxymoronic "focusing across the board," with the belief that improvement in all processes will assure improvement for the organization. Paraphrasing the old economic cliché, this results in efforts akin to raising all the boats to allow the tide to rise.

If we do think of the organization as a chain, we can improve the capabilities of all the links by strengthening them all, as implementations of TQM typically endeavor to do. But TOC tells us we will only gain "organization-wide improvement" from whatever strengthening happens to be applied to the weakest link -- that aspect of the organization that currently constrains the organization from reaching more of its goal. Efficient ongoing organization-wide improvement requires a focus on the constraint and its capabilities. As one constraint is elevated to the point at which it no longer blocks goal attainment, we move on to the new "weakest link" or constraint.

TQM tools and techniques are best applied in terms of how the target process interacts with and supports or hinders the performance of the constraint. After all, the performance of the constraint is what defines/limits the performance of the organization as a whole. The chain is only as strong as its weakest link. TQM, combined with the constraint-based focusing mechanism provided by TOC, provides both maximum current "bang-for-the-buck" and a systematic method for achieving ongoing "organization-wide improvement."

Who makes these changes?

I shoot an arrow right.
It lands left.
I ride after a deer and find myself chased by a hog.
I plot to get what I want and end up in prison.
I dig pits to trap others and fall in.

I should be suspicious of what I want.

- Jelaluddin Rumi, a 13th-century Sufi mystic poet, translated by Coleman Barks

The source of this page is a posting made by Frank Patrick to one of a variety of online discussion forums, most likely an e-mail discussion list. It's tone and style may be informal, occasionally provocative, and sometimes, even impertinent. There may even be typos until an opportunity arises to clean them up for more formal presentation. Despite these minor shortcomings of style, the content is worth sharing.

Related links:

FP's Postings - others like this page on a variety of topics

Unconstrained Thinking - a collection of more polished mutterings and musings, written as a column for APICS chapter newsleters

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