Deck 14: Building and Sustaining Quality and Performance Excellence

Question 1

Corning Incorporated was founded in 1851. One of the first companies in the United States to institutionalize research and development as a key business strategy, Corning is known for innovations in the development of glass products and glass- and ceramics-based applications. These include Gorilla ® Glass, a tough and damage-resistant application for touch screens on smartphones, tablets, slates, notebooks, and televisions, and telecommunications products such as optical fiber and cable connections systems that link people and businesses worldwide.
James (Jamie) R. Houghton, a descendant of Coming's founding family, served his first term as CEO from 1983 to 1996. During this time, he introduced the concept of total quality management to the company. Figure 14.3 provides a summary view of this quality journey that continues today.
In the early 1980s, Corning joined AT T, Cargill, Ford, Milliken, Motorola, Xerox, and other pioneering businesses in the pursuit of quality methodology to increase value. While the methods and concepts varied from one organization to another, a few recurring concepts emerged:
• Attack on all fronts; everyone needs to be engaged. Quality has to be a total effort.
• Develop small teams that attack projects by fixing processes across company operations.
• Tools of quality-such as Pareto analysis, fishbone diagrams, and statistical control charts-are taught, learned, and used by many teams.
• Among early adopters, the "attack on a broad front" strategy, which is implicit in the phrase total quality, requires the complete support of the CEO.
FIGURE 14.3 Coming's Heritage of Quality

Source: Adapted from Mary Beth Buckman and James Buckman, "The Corning Journey to Performance Excellence: Innovation Spanning Three Centuries," ASQ Next Generation Quality Leadership case study, July 2013. http://asq.org/knowledge-center/case-studies-corning.html.
During the early to mid-1980s, Corning made enormous strides in quality and company performance. The company achieved a milestone in 1995 when its telecommunications products division received the Malcolm Baldrige National Quality Award. From the late 1990s through the early part of the twenty-first century, Corning went through a boom period, exceeding market expectations while balancing opportunities and challenges. For instance, the tech bubble of the time contributed to an upward swing for several product lines, particularly fiber optics. However, that opportunity then turned into a challenge when the fiber optics market became saturated. Additionally, Coming's quality advantage had become outdated, no longer providing the competitive edge of cost and speed necessary to continue prospering from innovations alone. These issues created some difficulties for Corning in terms of competitiveness, sales opportunities, and cash flow, so the Corning Board of Directors asked Houghton to return as CEO in 2002.
Houghton felt it necessary to re-examine the fundamentals of Corning: its values, strategy, culture, and leadership. He asked Corning executives to analyze the company's expressed values and compare them to the current reality of practices, operations, and culture. At least one of the values-quality-was no longer a top priority. As evidence of its diminishing role, the quality office reported to a low level in the company hierarchy as the legendary quality advantage dissipated. Houghton searched for a new quality leader who would report frequently and personally to him, sending a clear message about the primacy of quality renewal.
Coming's new performance excellence initiative was based on the following guidelines:
• Concentrate on cost advantage.
• Preserve and enhance the historic culture of innovation that had been the guiding light of everything the company accomplished.
• Ensure that the continuous improvement system was the best in its class. Corning would use common quality tools, such as Six Sigma, lean, and kaizen, and customize them for a unique approach to quality improvement. This approach would have to be imbedded in Corning's vast global operations.
Initially, "quality" meant focusing on product quality. But as a strategic imperative, it became a process to position the company as a leader in innovation, manufacturing, and commercialization of products, and as a driver to greater profitability. This continual improvement approach was achieved by setting bold goals and expectations, using cross-functional teams to leverage outcomes, and expanding the term "quality" to "performance excellence," indicating the comprehensive inclusion of all business practices
Once the essential strategy was determined, it became evident that the company's new quality leader would have to provide a collection of performance excellence tools. Six Sigma training programs were expanded and would cover more subject matter and would be available for more personnel at all levels of the organization.
Globally, 70 percent of Coming's resources-both in manpower and expenditures-are devoted to manufacturing; thus, a principal focus was to transform manufacturing operations. Numerous approaches were used:
• Corning customized DMAIC tools for both operational and deep process improvement knowledge. When a Corning team works through the steps, tollgates at the end of each phase track progress. The company also maintains a database of completed projects that every employee can access.
• The company created individual DMAIC (iDMAIC), an online offering allowing one person to learn and apply Six Sigma methods to a personal project, as opposed to the more common practice of three- to 10-person project teams. Enabling one-person projects not only provides for far more learning, but it also avoids the temptation of project and meeting proliferation and promotes Six Sigma certification.
• Corning customized a new Design for Six Sigma tool to create new and innovative business processes and applies this method when a new process is needed or when a process is so broken that it needs to be replaced.
• Corning used lean to reduce waste and improve business process flow.
• The company developed an innovation process to support new product and technology development.
• Six Sigma and other continuous improvement tools were applied to sales and marketing. Corning has found, cataloged, documented, and published best practices for more than 50 common processes related to sales calls, proposals, market analyses, and forecasts.
To drive performance excellence across all disciplines to achieve corporate goals, Corning focused on embedding performance excellence practices across the broad spectrum of the multidivision, global company. The implementation team provided training, conducted benchmarking, launched Six Sigma projects, and supported teams dedicated to process improvement.
As of 2011, 3,000 employees had been trained in Six Sigma, and performance excellence champions were embedded in each division and manufacturing facility globally. Nearly 1,000 formal improvement projects were completed in 2011. Every year, Corning employees complete 100,000 personal improvement projects. On average, each employee uses performance excellence tools four times annually. Over an eight-year period, performance excellence saved Corning $1.5 billion.
Contrast Corning's journey to the Quality in Practice case about Xerox in Chapter 1. What similarities and differences do these organizations have?

Answer 1

Facts:
C Industries is a large-scale manufacturer of plastic and glass sheets. Initially, the company is able to obtain the results in a favorable manner. But, later the competition in the Industry ruined the company's position. And due to the dwindling market position, the company's quality policy changed and the company as a priority changed the policy to gain a cost advantage.
The Company changed its performance excellence motives and started practicing DMAIC of Six Sigma processes and KAIZAN's management principles. It initiated all the employees to get trained in Six Sigma and as a result, the company by 2011 is having a force of 3,000 employees trained in six sigma practices and 100,000 personnel projects are completed by them.
Six Sigma Procedures:
Six Sigma Procedures refers to a standardization of practices which are used to minimize the chances of defective practices in organizations. Organizations can cut down on their time and money by eliminating process errors by using Six Sigma. The Six Sigma process follows a DMIAC process standing for Define, Measure, Analyze and Control Process.
Discussion:
Both the Companies X and C industries have some similarities and some differences and the similarities are discussed as given below:
Similarities between X and C industry
Thus, the aforementioned are the similarities between industry C and X.
Differences between the X Company and C Industry
Thus, the aforementioned these are the differences between the X Company and S Industry.

Question 2

What might be the value of creating a crisis mentality in an organization in order to motivate the need for improvement?

Answer 2

Value of creating a crisis mentality in an organization to motivate the need for improvement:
Baldrige Award recipients have changed their cultures because of threats to their survival. When faced with a threat to survival, an organization implements change more quickly and smoothly.
However, an organization will generally have more difficulty in gaining support for any significant change when not facing a crisis.
This reluctance is reflections of the attitude "If it is not broke, do not fix it." Unfortunately, " complacency today often leads to crises tomorrow". Leaders with foresight view change as a way to get better, and to sustain existing market leadership positions. In such cases, one might even try to produce a crisis mentality to effect change.

Question 3

Describe the typical life cycle of a quality initiative and the Baldrige "Roadmap." Why are they important for senior leaders to understand?

Answer 3

The six stages of quality life cycle:
Six stages of quality life cycle are given below-
1. Adoption - it is first stage in life cycle where implementation of new quality takes place.
2. Regeneration - after the first stage it comes to second stage where new quality is initiated with an existing one to generate new energy.
3. Energizing - third stage comes when existing quality is refocused and gives new forces outputs.
4. Maturation - after that is the maturation stage where quality is strategically aligned in organization.
5. Limitation - it occurs when quality is not aligned properly in organization.
6. Decline - after limitation where quality is not aligned properly, it leads to the decline stage where initiative falls or has limited effect.
Importance of life cycle to senior leaders:
• Senior management focused on coordination of improvement with strong progress.
• The quality manager quoted as "management commitment and leadership from the top".
• They become personally and actively engaged with feedback of customers.
• Managers begin to experience organizational transformation strategies.
• Projects become more focused and aligned to organizational strategy while leadership and management process receives attention.
• Approaches and process of leadership like value development, cultural building, align strategic planning etc.

Question 4

We noted that creating a culture for quality and performance excellence is not rocket science. Summarize, in your own words, a simple explanation of what senior leaders need to do to accomplish it.

Question 5

Interview your fellow students to identify a set of "best learning practices." Develop a plan for sharing these throughout your school.

Question 6

Explain the notion of a learning organization. How does the Baldrige criteria provide a framework for organizational learning?

Question 7

Veridian Homes began in June 2003, when Don Simon Homes and Midland Builders, two of Wisconsin's oldest home builders, merged. The family owned and operated company dedicated itself to quality home building, community involvement and environmental stewardship. With 100 employees, Veridian Homes now builds 500 single-family and condominium homes each year in Madison, WI, and the surrounding area. The company has found the use of several quality methods, including a Baldrige self assessment system, is critical to the success of the company's improvement initiatives. Using best quality practices to increase customer focus and satisfaction, it has improved productivity while reducing impact on the environment.
The goal at Veridian Homes is to promote, educate on, and coordinate quality throughout the company. Specifically, the structure and systems employed to achieve this goal, from a strategic and operational mindset, include the National Housing Quality Award (NHQA), Baldrige Award self assessment, builder certification, and Six Sigma. The NHQA program is based on the Baldrige award, and provides applicants expert evaluation and feedback on their organizations' quality management practices. Unlike the Baldrige award, however, the NHQA process includes a third-party survey of the applicants' customers on their satisfaction with their homes and the home building process. The NHQA also includes a self-assessment, which helps identify opportunities for improvement (OFIs) and allows these efforts to be strategically implemented.
Self-assessments are conducted annually using Baldrige Express, an employee survey based on the Baldrige criteria. The National Council for Performance Excellence offers Baldrige Express surveys in association with state quality award organizations.
Employees rate the company on a Likert scale in each criterion and can provide detailed comments on strengths, weaknesses and OFIs. A report provides a detailed analysis for management to conduct annual measuring and monitoring and to identify and prioritize weaknesses. Veridian uses this analysis to drive its annual strategic planning process (SPP), placing Baldrige at the heart of the organizational strategy formation cycle (see Figure 14.4). Strategic goals are linked to each employee via the performance planning and development (PPD) process. This process helps an employee understand his or her role, priorities, resources, accomplishments, and professional development as they relate to the company's vision, mission, strategic drivers, and departmental strategic goals. The employees also take part in a profit sharing program, motivating and rewarding employees based on measured and sustained improvements in cost, quality, cycle times, customer service, and profits.
In fall 2004, Veridian Homes earned NAHBRC builder certification status for quality and safety management systems. The certification, based on ISO 9000, is third-party audited and included Veridian's construction, sales and customer relations departments. Since earning certification, the land development, purchasing, estimating, and design departments have been incorporated into the certification. Veridian has also expanded its management system to include an environmental management system that focuses on improving activities such as erosion control and recycling. This has formed an integrated quality, environmental, health, and safety (QEHS) management system, which provides a tactical level methodology to structure, document, disseminate, implement, and manage Veridian's QEHS requirements.
Veridian uses various improvement tools and techniques to support quality implementation. On the Veridian intranet, which is available to all employees, a quality toolbox provides templates, PowerPoint based training, videos and other materials covering topics such as trade partner certification, builder certification, NHQA criteria, Baldrige criteria; Six Sigma methodology, and other improvement tools and techniques.
Veridian uses numerous cross-functional improvement teams. Each team has a team leader, facilitator, and sponsor, and the company has one Six Sigma Black Belt and two Green Belts to provide support and expertise. The construction and customer relations departments have launched 10 improvement teams focusing on issues raised through warranty and customer feedback and directly linked to the strategy for the operations department.
FIGURE 14.4 Strategic Planning Cycle Driven by Baldrige Assessment

Source: Reprinted with permission from Denis Leonard, "Building Quality at Veridian Homes," Quality Progress, October 2006, pp. 49-54.
Veridian's green building practices address the corporate social responsibility aspect of quality management and are reflected in the leadership criteria of the NHQA and the Baldrige award. In Wisconsin, green building practices are certified by Green Built Homes through the Wisconsin Environmental Initiative. Green Built certified builders undergo reviews of building plans, specifications, and on-site visits to ensure the criteria are met. The criteria cover waste reduction, recycling and disposal of materials, energy efficient insulation and air sealing, storm water management and water conservation, landscape conservation, energy efficient mechanical systems, and use of recycled materials and energy efficient materials and construction products.
Veridian's quality initiatives have resulted in several performance improvements, including:
• Model homes sold cycle times reduced from 32 to 15 days.
• Drafting time on models reduced by more than an hour.
• Estimating time on model homes reduced by 32 percent.
• Material variance (difference between ordered and required, perhaps due to damage on site) down by 20 percent for lumber, 24 percent for siding, and 38 percent for trim.
• Paperwork processing reduced by 208 hours per year, with a total estimated savings across Veridian of $200,000 through performance increases by implementing a production scheduler software system called Builder MT.
• Person hours down by 200 per year through escrow and warranty process improvements.
• Defects cut in half by using 10 defect reduction teams in cooperation with trade partners.
In national surveys conducted by NRS Corp., a consulting firm that specializes in research for the home building industry, Veridian customer satisfaction measures are consistently in the top 10 percent of the 333 builders reviewed. Satisfaction with Veridian's warranty is in the top 5 percent of all builders on the 30-day customer satisfaction survey and is in the top 15 percent of all builders on the annual customer satisfaction survey.
What tools and approaches has Veridian used to integrate quality throughout the organization?

Question 8

Discuss the role of middle management and the workforce in achieving quality and performance excellence.

Question 9

What is self-assessment? Why is it valuable? What issues should self-assessment address?

Question 10

Examine some corporate websites and comment on the cultural values that are reflected by the information you find. How important do these organizations view quality to their success?

Question 11

How would you describe the culture of your college or university?

Question 12

Why is follow-up important as a part of self-assessment processes? What two key activities should comprise follow-up? What advice should managers heed to leverage self-assessment?

Question 13

What is culture? How are cultural values reflected in organizations?

Question 14

Find an organization that has implemented ISO 9000, Baldrige, or Six Sigma. Prepare a report on the implementation issues and challenges that the organization faced. How did they address them, and what was the result of their efforts?

Question 15

Why have small businesses and not-for-profits been slow to adopt quality initiatives?

Question 16

Company A was a very large, privately owned company with diverse business units, mostly related to the hospitality industry. The deployment champion at this company had been successful in deploying Six Sigma at a smaller organization. In his new position, he was paid more, and his title was more impressive, but he was at least one layer lower in the organization than he had been at his earlier job. Although he had "the ear of the CEO," he was one of many who did, and there were others in the chain with much more access to that CEO. In his earlier job, he had trained internal people to be Black Belts and, after three years, had advanced the strongest performers among them to become Master Black Belts. This is the story of how Six Sigma was deployed at Company A, told in the words of one quality manager.
Because his boss wanted Six Sigma to be implemented "faster," he took a shortcut, hiring some Master Black Belts from the outside. A couple of these deserved the title; most, as it turned out, did not. We had recommended an executive session. The deployment champion told us "that isn't going to happen-not as busy as these executives are," but he assured us that he had the situation well in hand. He was meeting with them individually, an hour at a time when he could get it scheduled, and had given them all a required reading list.
Initially, champion (sponsor) training was scheduled for three days. Managers told to attend complained to their managers, who managed to get the training requirement reduced to one day. One class of 20 champions attended a one-day workshop. Most of them stayed for the entire day. Some of them even chartered projects. This company had decided to start its efforts with two-week Green Belts, and we began training Green Belts at a rapid pace. When the first wave came to class, half of them were still looking for projects. Of those who did have projects, only a handful had champions who had been to champion training. The rest had been sent by their bosses, who had heard that "this Six Sigma thing is going to be in my expectations this year, so I need to get a project or two done."
When the first wave came back for their second week, some of the projects had been dropped, some Green Belts were still looking for projects, and some had made a little progress. It got worse in subsequent waves: Fewer projects had champions; fewer of those that did had trained champions (some of the trained champions had been promoted and were no longer able to function as champions); almost none of the projects could be tied to strategy; almost no one had data or baselines. Some could not even tie their project to a specific process. I expressed this concern to my managing director and told him that the company would be much better off if he diverted its deployment investment from training to coaching and thereby got some projects done. He called the deployment champion. After a 20-minute conversation, my boss hung up and said, "He's happy with things... He says they are making lots of progress. From his perspective, it's successful, and he wants you to keep going." I asked for a meeting with the deployment champion so I could explain my views further. That never happened. What did happen is that we kept training wave after wave of Green Belts. Midway through the second year, the organization held a "gallery walk" at its world headquarters to celebrate all the gains they had made in process improvement efforts. I attended this celebration; about 20 projects were on display. Not a single project had been led by a Green Belt. None of the gains could be proven with data. Many of the people involved in the projects questioned the advertised results.
At the end of two years, three things happened:
1. Corporate trainers decided to take over Green Belt training. They said, "We are cutting out all the statistics-our feedback indicates that students didn't like it and never used any of it."
2. My new managing director had a meeting with the deployment champion, who was furious that he had spent more than half a million dollars on our training but couldn't prove that any of our students had provided any return on that investment.
3. All the Master Black Belts quit and moved to other organizations.
In later years, I met several people from that organization. All said pretty much the same thing: "We really tried, but it just didn't work with our culture."
Company B was a manufacturer and a spin-off from a larger, Fortune 25 company. This company was in crisis due to the "buggy whip syndrome"; in other words, they were very good at what they did, but their business was in trouble because other technologies were overshadowing the need for products that had provided the bulk of their sales for a long time. The company had hired as its new CEO a well-known quality champion and author of a book on deploying lean. He hired me because he wanted Six Sigma aligned with his lean efforts to create a system for process improvement. This CEO personally led a two-day executive session, inviting us to present an overview during the first half of day two. He required his direct reports to personally sponsor projects in the first round. He introduced his COO as deployment champion and told the executive team in no uncertain terms that she was his voice in this deployment. He then opened sponsor training to these individuals and their direct reports, which was scheduled to occur between the second and third weeks of Black Belt training. The top managers left having committed publicly to project ideas that were aligned with strategic objectives.
The CEO opened the first session of the first week of every Black Belt training class and required project sponsors for the wave being trained to give an elevator speech about the project they were sponsoring. The deployment champion sat through the entire first wave of training and had her second in command sit through the entirety of every subsequent wave. Each week, we set aside 90 minutes on Monday through Thursday for project reports from the Black Belts. The COO demanded a schedule set in advance for these presentations, and each project sponsor was required to sit in on all his projects' presentations. The CEO always sat in on the first set of presentations in week two of each wave. In the first set of presentations, one of the Black Belt candidates, an engineer, got up to present and said, "Here is my charter.... I'm afraid that's all I have to report. I haven't been able to get anything else done because I have two other projects that are priorities." The COO, in front of everyone present, immediately turned to the project sponsor and asked, "Is this project important to you?" The sponsor started to talk about other priorities, and she cut him off. "We all have other priorities. What I asked was whether this project is important to you. This project, that you committed to support, that you said would drive a metric at the top of your strategic objectives for the year... is this project important to you?" He again tried to talk about some other priority, and she cut him off again. "Let's meet on this, after the presentations are done." She looked over at the CEO and said, "Are you available?" He nodded. That engineer was able to report significant progress during the next rounds of project presentations. We never heard any whispers about lack of sponsor support after that.
We trained 18 Black Belts in that first round. Two of them were victims of a reorganization (the day of the final exam). The other 16 completed their projects, and the validated NPV for the total portfolio from that first wave was $32 million in the first year. We saw similar results in each subsequent wave. The deployment champion's second in command took over training at the end of the second year and became the company's Master Black Belt. Most of the Black Belts ran between three and five projects per year, with gains varying between $250,000 and $2 million per project.
How would you characterize the culture of these two companies?

Question 17

What lessons can be learned from Wainwright Industries about changing an organization's culture?

Question 18

What must small businesses and not-for-profits do to successfully establish a total quality focus?

Question 19

A new housing development has lots of packed earth and weeds, but no grass. Two neighbors make a wager on who will be the first to have a lush lawn. Mr. Fast N. Furious knows that a lawn will not grow without grass seed, so he immediately buys the most expensive seed he can find because everyone knows that quality improves with price. Besides, he'll recover the cost of the seed through his wager. Next, he stands knee-deep in his weeds and tosses the seed around his yard. Confident that he has a head start on his neighbor, who is not making much visible progress, he begins his next project.
Ms. Slo N. Steady, having grown up in the country, proceeds to clear the lot, till the soil, and even alter the slope of the terrain to provide better drainage. She checks the soil's pH, applies weed killer and fertilizer, and then distributes the grass seed evenly with a spreader. She applies a mulch cover and waters the lawn appropriately. She finishes several days after her neighbor, who asks if she would like to concede defeat. After all, he does have some blades of grass poking up already.
Mr. Furious is encouraged by the few clumps of grass that sprout. While these small, green islands are better developed than Ms. Steady's fledgling lawn, bare spots and weeds surround them. If he maintains these footholds, he reasons, they should spread to the rest of the yard. He notices that his neighbor's lawn is more uniform and is really starting to grow. He attributes this progress to the Steady children, who water the lawn each evening. Not wanting to appear to be imitating his neighbor, Mr. Furious instructs his children to water his lawn at noon.
The noon watering proves to be detrimental, so he decides to fertilize the remaining patches of grass. Because he wants to make up for the losses the noon watering caused, he applies the fertilizer at twice the recommended application rate. Most of the patches of grass that escape being burned by the fertilizer, however, are eventually choked out by the weeds.
After winning the wager with Mr. Furious, Ms. Steady lounges on the deck enjoying her new grill, which she paid for with the money from the wager. Her lawn requires minimal maintenance, so she is free to attend to the landscaping. The combination of the lawn and landscaping also results in an award from a neighborhood committee that determines that her lawn is a true showplace. Mr. Furious still labors on his lawn. He blames the poor performance on his children's inability to properly water the lawn, nonconforming grass seed, insufficient sunlight, and poor soil. He claims that his neighbor has an unfair advantage and her success is based on conditions unique to her plot of land. He views the loss as grossly unfair; after all, he spends more time and money on his lawn than Ms. Steady does.
He continues to complain about how expensive the seed is and how much time he spends moving the sprinkler around to the few remaining clumps of grass that continue to grow. But Mr. Furious thinks that things will be better for him next year, because he plans to install an automatic sprinkler system and make a double-or-nothing wager with Ms. Steady.
Within the context of the continual struggles to create a "world-class" lawn and "world-class" business, draw analogies between the events described in this case. Specifically, list the actions that Ms. Steady and Mr. Furious took and translate these into business examples.

Question 20

Discuss how the Baldrige framework promotes alignment and integration.

Question 21

In the film The Wizard of Oz, Dorothy learned many lessons. Surprisingly, managers can learn a lot also. For each of the following summaries of scenes in the film, discuss the lessons that organizations can learn in pursuing change and a TQ culture.
1. Dorothy was not happy with the world as she knew it. A tornado came along and transported her to the Land of Oz. Dorothy's house was dropped by the tornado on the Wicked Witch of the East, killing the witch. "Ding, dong, the witch is dead!" rang throughout Munchkinland, but Dorothy had enraged the dead witch's sister. Dorothy only temporarily lost her home support provided by family back in Kansas. All is not good, however, in the Land of Oz. Dorothy's problem is to find her way home to Kansas. Her call to action was precipitated by a crisis-the tornado that transported her to an alien land.
2. In the throes of a Kansas tornado, Dorothy is transported to an unfamiliar land. Immediately, she realizes her world is different and the processes and people she encounters are different, yet bear some similarity to her Kansas existence. 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.
3. Dorothy is a hero for killing the Wicked Witch of the East. Glinda, the Good Witch, sends Dorothy on her way to meet the Wizard of Oz who will help her get back to Kansas. The Wicked Witch of the West tries to get Dorothy's newly acquired ruby slippers, but to no avail. 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 to endure the vexing journey. They overcome many risks and barriers, including the sleeping poppy field, flying monkeys, and a haunted forest on the way to Oz.
4. 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. They depart for the West.
5. Charged with the task of obtaining the broom, Dorothy and company experience several encounters with near disaster, including Dorothy's incarceration in the witch's castle while an hourglass counts the time to her death. 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.
6. 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.
7. 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."
In examining the process that Dorothy used to manage the development and implementation of this project, what factors contributed to her success?

Question 22

Develop a hierarchy of the questions within the Baldrige Award criteria that would guide an organization starting to pursue performance excellence toward world-class performance. In other words, what key issues within the criteria would be more appropriate for organizations just starting out to concentrate on, and how should they progress toward fully meeting the Baldrige criteria?

Question 23

Corning Incorporated was founded in 1851. One of the first companies in the United States to institutionalize research and development as a key business strategy, Corning is known for innovations in the development of glass products and glass- and ceramics-based applications. These include Gorilla ® Glass, a tough and damage-resistant application for touch screens on smartphones, tablets, slates, notebooks, and televisions, and telecommunications products such as optical fiber and cable connections systems that link people and businesses worldwide.
James (Jamie) R. Houghton, a descendant of Coming's founding family, served his first term as CEO from 1983 to 1996. During this time, he introduced the concept of total quality management to the company. Figure 14.3 provides a summary view of this quality journey that continues today.
In the early 1980s, Corning joined AT T, Cargill, Ford, Milliken, Motorola, Xerox, and other pioneering businesses in the pursuit of quality methodology to increase value. While the methods and concepts varied from one organization to another, a few recurring concepts emerged:
• Attack on all fronts; everyone needs to be engaged. Quality has to be a total effort.
• Develop small teams that attack projects by fixing processes across company operations.
• Tools of quality-such as Pareto analysis, fishbone diagrams, and statistical control charts-are taught, learned, and used by many teams.
• Among early adopters, the "attack on a broad front" strategy, which is implicit in the phrase total quality, requires the complete support of the CEO.
FIGURE 14.3 Coming's Heritage of Quality

Source: Adapted from Mary Beth Buckman and James Buckman, "The Corning Journey to Performance Excellence: Innovation Spanning Three Centuries," ASQ Next Generation Quality Leadership case study, July 2013. http://asq.org/knowledge-center/case-studies-corning.html.
During the early to mid-1980s, Corning made enormous strides in quality and company performance. The company achieved a milestone in 1995 when its telecommunications products division received the Malcolm Baldrige National Quality Award. From the late 1990s through the early part of the twenty-first century, Corning went through a boom period, exceeding market expectations while balancing opportunities and challenges. For instance, the tech bubble of the time contributed to an upward swing for several product lines, particularly fiber optics. However, that opportunity then turned into a challenge when the fiber optics market became saturated. Additionally, Coming's quality advantage had become outdated, no longer providing the competitive edge of cost and speed necessary to continue prospering from innovations alone. These issues created some difficulties for Corning in terms of competitiveness, sales opportunities, and cash flow, so the Corning Board of Directors asked Houghton to return as CEO in 2002.
Houghton felt it necessary to re-examine the fundamentals of Corning: its values, strategy, culture, and leadership. He asked Corning executives to analyze the company's expressed values and compare them to the current reality of practices, operations, and culture. At least one of the values-quality-was no longer a top priority. As evidence of its diminishing role, the quality office reported to a low level in the company hierarchy as the legendary quality advantage dissipated. Houghton searched for a new quality leader who would report frequently and personally to him, sending a clear message about the primacy of quality renewal.
Coming's new performance excellence initiative was based on the following guidelines:
• Concentrate on cost advantage.
• Preserve and enhance the historic culture of innovation that had been the guiding light of everything the company accomplished.
• Ensure that the continuous improvement system was the best in its class. Corning would use common quality tools, such as Six Sigma, lean, and kaizen, and customize them for a unique approach to quality improvement. This approach would have to be imbedded in Corning's vast global operations.
Initially, "quality" meant focusing on product quality. But as a strategic imperative, it became a process to position the company as a leader in innovation, manufacturing, and commercialization of products, and as a driver to greater profitability. This continual improvement approach was achieved by setting bold goals and expectations, using cross-functional teams to leverage outcomes, and expanding the term "quality" to "performance excellence," indicating the comprehensive inclusion of all business practices
Once the essential strategy was determined, it became evident that the company's new quality leader would have to provide a collection of performance excellence tools. Six Sigma training programs were expanded and would cover more subject matter and would be available for more personnel at all levels of the organization.
Globally, 70 percent of Coming's resources-both in manpower and expenditures-are devoted to manufacturing; thus, a principal focus was to transform manufacturing operations. Numerous approaches were used:
• Corning customized DMAIC tools for both operational and deep process improvement knowledge. When a Corning team works through the steps, tollgates at the end of each phase track progress. The company also maintains a database of completed projects that every employee can access.
• The company created individual DMAIC (iDMAIC), an online offering allowing one person to learn and apply Six Sigma methods to a personal project, as opposed to the more common practice of three- to 10-person project teams. Enabling one-person projects not only provides for far more learning, but it also avoids the temptation of project and meeting proliferation and promotes Six Sigma certification.
• Corning customized a new Design for Six Sigma tool to create new and innovative business processes and applies this method when a new process is needed or when a process is so broken that it needs to be replaced.
• Corning used lean to reduce waste and improve business process flow.
• The company developed an innovation process to support new product and technology development.
• Six Sigma and other continuous improvement tools were applied to sales and marketing. Corning has found, cataloged, documented, and published best practices for more than 50 common processes related to sales calls, proposals, market analyses, and forecasts.
To drive performance excellence across all disciplines to achieve corporate goals, Corning focused on embedding performance excellence practices across the broad spectrum of the multidivision, global company. The implementation team provided training, conducted benchmarking, launched Six Sigma projects, and supported teams dedicated to process improvement.
As of 2011, 3,000 employees had been trained in Six Sigma, and performance excellence champions were embedded in each division and manufacturing facility globally. Nearly 1,000 formal improvement projects were completed in 2011. Every year, Corning employees complete 100,000 personal improvement projects. On average, each employee uses performance excellence tools four times annually. Over an eight-year period, performance excellence saved Corning $1.5 billion.
What concepts and principles discussed in this chapter are reflected in this case? What lessons can other organizations learn from this case?

Question 24

What are common barriers to change?

Question 25

What might the term dysfunctional corporate culture mean? What implications does it have regarding quality?

Question 26

What might the learning organization concept mean to a college or university?

Question 27

Veridian Homes began in June 2003, when Don Simon Homes and Midland Builders, two of Wisconsin's oldest home builders, merged. The family owned and operated company dedicated itself to quality home building, community involvement and environmental stewardship. With 100 employees, Veridian Homes now builds 500 single-family and condominium homes each year in Madison, WI, and the surrounding area. The company has found the use of several quality methods, including a Baldrige self assessment system, is critical to the success of the company's improvement initiatives. Using best quality practices to increase customer focus and satisfaction, it has improved productivity while reducing impact on the environment.
The goal at Veridian Homes is to promote, educate on, and coordinate quality throughout the company. Specifically, the structure and systems employed to achieve this goal, from a strategic and operational mindset, include the National Housing Quality Award (NHQA), Baldrige Award self assessment, builder certification, and Six Sigma. The NHQA program is based on the Baldrige award, and provides applicants expert evaluation and feedback on their organizations' quality management practices. Unlike the Baldrige award, however, the NHQA process includes a third-party survey of the applicants' customers on their satisfaction with their homes and the home building process. The NHQA also includes a self-assessment, which helps identify opportunities for improvement (OFIs) and allows these efforts to be strategically implemented.
Self-assessments are conducted annually using Baldrige Express, an employee survey based on the Baldrige criteria. The National Council for Performance Excellence offers Baldrige Express surveys in association with state quality award organizations.
Employees rate the company on a Likert scale in each criterion and can provide detailed comments on strengths, weaknesses and OFIs. A report provides a detailed analysis for management to conduct annual measuring and monitoring and to identify and prioritize weaknesses. Veridian uses this analysis to drive its annual strategic planning process (SPP), placing Baldrige at the heart of the organizational strategy formation cycle (see Figure 14.4). Strategic goals are linked to each employee via the performance planning and development (PPD) process. This process helps an employee understand his or her role, priorities, resources, accomplishments, and professional development as they relate to the company's vision, mission, strategic drivers, and departmental strategic goals. The employees also take part in a profit sharing program, motivating and rewarding employees based on measured and sustained improvements in cost, quality, cycle times, customer service, and profits.
In fall 2004, Veridian Homes earned NAHBRC builder certification status for quality and safety management systems. The certification, based on ISO 9000, is third-party audited and included Veridian's construction, sales and customer relations departments. Since earning certification, the land development, purchasing, estimating, and design departments have been incorporated into the certification. Veridian has also expanded its management system to include an environmental management system that focuses on improving activities such as erosion control and recycling. This has formed an integrated quality, environmental, health, and safety (QEHS) management system, which provides a tactical level methodology to structure, document, disseminate, implement, and manage Veridian's QEHS requirements.
Veridian uses various improvement tools and techniques to support quality implementation. On the Veridian intranet, which is available to all employees, a quality toolbox provides templates, PowerPoint based training, videos and other materials covering topics such as trade partner certification, builder certification, NHQA criteria, Baldrige criteria; Six Sigma methodology, and other improvement tools and techniques.
Veridian uses numerous cross-functional improvement teams. Each team has a team leader, facilitator, and sponsor, and the company has one Six Sigma Black Belt and two Green Belts to provide support and expertise. The construction and customer relations departments have launched 10 improvement teams focusing on issues raised through warranty and customer feedback and directly linked to the strategy for the operations department.
FIGURE 14.4 Strategic Planning Cycle Driven by Baldrige Assessment

Source: Reprinted with permission from Denis Leonard, "Building Quality at Veridian Homes," Quality Progress, October 2006, pp. 49-54.
Veridian's green building practices address the corporate social responsibility aspect of quality management and are reflected in the leadership criteria of the NHQA and the Baldrige award. In Wisconsin, green building practices are certified by Green Built Homes through the Wisconsin Environmental Initiative. Green Built certified builders undergo reviews of building plans, specifications, and on-site visits to ensure the criteria are met. The criteria cover waste reduction, recycling and disposal of materials, energy efficient insulation and air sealing, storm water management and water conservation, landscape conservation, energy efficient mechanical systems, and use of recycled materials and energy efficient materials and construction products.
Veridian's quality initiatives have resulted in several performance improvements, including:
• Model homes sold cycle times reduced from 32 to 15 days.
• Drafting time on models reduced by more than an hour.
• Estimating time on model homes reduced by 32 percent.
• Material variance (difference between ordered and required, perhaps due to damage on site) down by 20 percent for lumber, 24 percent for siding, and 38 percent for trim.
• Paperwork processing reduced by 208 hours per year, with a total estimated savings across Veridian of $200,000 through performance increases by implementing a production scheduler software system called Builder MT.
• Person hours down by 200 per year through escrow and warranty process improvements.
• Defects cut in half by using 10 defect reduction teams in cooperation with trade partners.
In national surveys conducted by NRS Corp., a consulting firm that specializes in research for the home building industry, Veridian customer satisfaction measures are consistently in the top 10 percent of the 333 builders reviewed. Satisfaction with Veridian's warranty is in the top 5 percent of all builders on the 30-day customer satisfaction survey and is in the top 15 percent of all builders on the annual customer satisfaction survey.
How have NHQA certification, the Baldrige process, and the Green Built certification process contributed to efficiency and cost effectiveness for Veridian?

Question 28

Talk to a local not-for-profit organization manager or small business owner about quality. How aware are they of quality principles and tools? What challenges do they see in trying to build quality into their organizations?

Question 29

Talk to individuals that you know from some local organizations (companies, schools, government agencies) about the organization's commitment to quality and performance excellence principles. What factors do they attribute to either the success or failure of their organization's approaches?

Question 30

Define the terms alignment and integration. Why are they important?

Question 31

Explain the difference between strategic change and process change.

Question 32

What is your opinion on the future of quality? Do you agree with the comments made in the concluding section of this chapter? Why or why not?

Question 33

What might be some "warning signs" of a weak quality culture? For example, one might be that senior executives rarely discuss quality.

Question 34

Why is it important to customize performance excellence approaches to each organization?

Question 35

Read the application summary for a recent Baldrige recipient (which can be found on the Baldrige website) and try to characterize what "quality engine" drives the organization.

Question 36

What are best practices? What are the major conclusions and implications of the Best Practices report of Ernst Young and the American Quality Foundation? How do they relate to Deming's philosophy?

Question 37

Describe questions that organizations must ask and steps they must take in change management processes.

Question 38

List the important principles for successfully implementing performance excellence approaches.