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Strategic Quality Planning (SQP)

The Plan for Implementing Organizational Change

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Learning Objectives

Upon completing this lesson, you will be able to:

• Understand the 8-step Strategic Quality Planning (SQP) process.

• Appreciate the IE’s role in SQP.

• Understand the tools useful for assessing an organization.

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The Change Model

1. Assess the organization’s need for change2. Create a felt need for change3. Introduce the change4. Revise and finalize the change plan5. Stabilize and maintain the change

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INTRODUCTION to SQP

The objective of these notes* is to provide a simple yet systematic approach for strategic quality planning when implementing organizational change in an organization.

*These notes were developed from numerous sources such as UW-Madison Office of Quality Improvement, IBM TQM notes, P&G, practical experiences, and others.

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INTRODUCTION to SQP

• Strategic Quality Planning is an essential component of business planning whereby quality improvement objectives (directions) are defined for all departments in order to support the overall success factors (profits, sales, market share) of the company.

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INTRODUCTION

The planning process helps guide an organization in answering three key questions

•Why does the organization exists? (Mission Statement)

•Where does it need to be going? (Vision Statement)

•How does it get there? (Change Plan)

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INTRODUCTION Continued

• A strategic quality plan consists of quality objectives and the strategies for achieving those objectives in order to support the company’s overall strategic (business) plan and success factors.

• It needs to:– Involve all major functions of the organization, – Link business priorities and quality objectives to

individual and group actions.

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STEPS TO QUALITY PLANNING

Step 1 Define your customers and their needsStep 2 Define your mission statementStep 3 Define your guiding principlesStep 4 Define your vision and current situationStep 5 Define the gapStep 6 Define your key result areasStep 7 Define your critical processes and objectivesStep 8 Define the implementation plan

Periodically go back to Step 1 and review

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STEP 1 DEFINE YOUR CUSTOMERS

Who are your customers?

What do they need and expect?

In defining your customers’ needs and expectations, should you ask them for what you should do or how?

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STEP 2 DEFINE YOUR MISSION STATEMENT

Purpose of the Mission Statement

• To define the purpose of the organization (why it exists)

• To aid in developing constancy of purpose, by enabling each person in the organization to share in the overall mission.*

• Your company’s mission statement is one of the most significant statements the company can make. It reflects your vision of excellence, reason for being, and the way the company views itself, its employees, and its customers.

*Note! The process of developing the mission statement is at least as valuable as the product itself. It is an opportunity for people to explore, discuss and debate, and ultimately share understanding of the purpose for the work they do.

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STEP 2 DEFINE YOUR MISSION STATEMENT Continued

Communication & Visibility

• Your company’s mission statement should be stated in the quality manual, and communicated and displayed openly in all areas of the company.

• Framed and hung on walls in visible areas• Back of business cards?• Plastic covered “cards” for all employees• Other

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EXAMPLE MISSION STATEMENTS

• PENDA CORPORATION: Operating PhilosophyThe operating philosophy of Penda Corporation is to provide our customers with a quality product at the most economical costs by developing and maintaining an atmosphere which encourages all employees to strive for continuous improvement in the quality of products and services throughout the company and its suppliers.

• RICHLAND CENTER FOUNDRY COMPANYThe people of the Richland Center Foundry Company are the leading producers of low- to medium-volume raw and finished iron castings, serving the world's best manufacturers.

• CASEAt Case we are in business to provide our customers with the best possible value in quality products and quality services. We are an organization dedicated to customer satisfaction.

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STEP 2 Continued

Moving the Mission on Down

The real value is in the discussions.

EVALUATION: How will you measure that the mission is being carried out?

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STEP 3 DEFINE YOUR GUIDING PRINCIPLES*

• Guiding principles are the values that should guide decision making in your organization.

Purpose of Guiding Principles:

• As we are caught up in the stresses and conflicts of meeting deadlines and business competition, it is easy to forget the values that we want to drive our decision making.

• Deciding those as a leadership team can help us develop an understanding that will provide a basis for working together and making consensus decisions that reflect those values.

*Often referred to as a company’s policy for quality/behavior.

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What are Examples of Guiding Principles?

• _____________________________________________________

• _____________________________________________________

• _____________________________________________________

• _____________________________________________________

• _____________________________________________________

• _____________________________________________________

• _____________________________________________________

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STEP 3 DEFINE YOUR GUIDING PRINCIPLES Continued

Guiding Principles as Product

• Make decisions and guide strategic activities.

• Communicate to all departments and all levels.

• Make them public (along with your mission statement), communicating your values to your customers.

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STEP 4 DEFINE YOUR VISION

• A vision is a mental picture of a desired future state. "Where are we going as an organization?”

• It can consist of one or several statements, and be concise and clear.

• Everyone in the organization should be able to know and understand the vision.

• It should be a real stretch to get to your vision - Reach far.

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Example Vision Statement

• Richland Center Foundry Company is recognized by our customers and outside organizations as the world's number one supplier of low- to medium-volume raw and finished iron castings.

• What do you think?

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STEP 4 Continued

Purpose of a Vision

• A vision gives everyone in the organization a clear picture of where the main thrust of the organization is.

• It serves as grounding when daily decisions are being made. It guides our activities toward an agreed upon future state.

• It can be a driving force for innovative actions and commitment to purpose.

• Without a vision, people tend to maintain current status, and mediocrity is the norm.

Remember: An organization cannot accomplish what it cannot envision.

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STEP 4 Continued

The vision builds on the mission

Passing it Down

Develop Ownership at all Levels

How?

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The Organizational Vision• Will the markets we now serve still exist X years from

now?• What markets do we want to serve X years from now?• What products do we want to provide X years from now?• What will our technologies and labor markets look like X

years from now? • Who will be our competitors X years from now?• What will be our critical success factors X years from now?

What will we need from our suppliers and partners X years from now?

• What capabilities do we need to develop between now and X years from now?

• What new resources will we need X years from now? • What do we need to do in order to be competitive X years

from now?• What should we not change?• Etc….

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The Organizational Vision

• A vision is a stretch for the future. From where? In order to get anywhere, you have to know from where you start. Even a map is useless without knowing where you are now.

• Need to define the current situation.• Organization assessment

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Assess the Organization

• Perform a SWOT analysis.- What are our strengths, weaknesses, opportunities, and

threats?- What’s the “gap” between our “as is”

situation/outcomes and our “need to be” situation/targets?

- What organizational changes are necessary to bring us to our “need to be” state?

• Create the vision for change

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Tools for Assessing the Organization *

• SWOT analysis• Benchmarking and/or visits to other organizations• Structured interviews • Focus group discussions• Written surveys• Conferences and/or retreats• Books, articles, consultants• Group Brainstorming• Affinity Diagrams• Interrelationship Digraphs• Tree Diagrams• Is/Is Not Analysis• Force Field Analysis• Etc.

* May involve employees, customers, suppliers, shareholders, etc.

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Structured Interviews

• Involves structured and identical one-on-one questions for all participants from a broad cross-section of the organization.

• Typically last no longer than one hour• Allows participants to offer their own ideas

plus answer the questions• Gathers information on the organization’s

culture, the change focus, competencies, and the basis for a shared co-vision.

• Allows for summary of key themes and broad trends.

* From Leading Change Training, Jeff and Linda Russell, 2003

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Focus Groups

• Allows one to explore issues surrounding change in greater depth in an interactive way within each group comprised of participants from a broad cross-section of the organization.

• Used to identify diverse perspectives and issues – not create consensus.

• Each group addresses and discusses the same key questions.

• Allows for summary of key themes and broad trends.

* From Leading Change Training, Jeff and Linda Russell, 2003

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Written Surveys

• Efficient way to gather information from a large group comprised of people from a broad cross-section of the organization.

• Lacks the ability to interact with the respondents.

• Useful to get information and insights about people’s perception about change and the organization.

• Allows for summary of key themes and broad trends.

* From Leading Change Training, Jeff and Linda Russell, 2003

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STEP 5 DEFINE THE GAP

A. Current Situation

• Where the organization is now

• Strengths and weaknesses

• internal

• external

• Primary functions

• Critical processes

B. Vision of Future

• Where the organization wants to go

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STEP 5 DEFINE THE GAP Continued

GAP = B - A (differences)

Use the leadership team to brainstorm* and capture ideas on:• The gaps

• improvement needs

• development needs

• maintenance needs

• learning needs

*use affinity and other methods

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Create A Felt Need For Change

• What tools or strategies are needed to assist in this activity?

• The “walk of shame”.• Grabber statistics and/or graphs.• Customer requests (or complaints)• Role playing or simulations• Economic forecasts or models.• ________________________

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STEP 6 DEFINE YOUR KEY RESULT AREAS

• Identify areas on which to focus major development and/or improvement efforts over the next year or more.

• Choose only one to three key result areas

• These key result areas are in addition to managing all the other work that goes on day to day.

• The key result areas are the breakthrough development.

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STEP 6 DEFINE YOUR KEY RESULT AREAS Continued

What are examples of key result areas?

• ____________________________________________

• ____________________________________________

• ____________________________________________

• ____________________________________________

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STEP 7 DEFINE YOUR CRITICAL PROCESSES, MEASURES AND OBJECTIVES

• Critical processes are the processes that are at the base of the key result areas.

EXAMPLES:

• If fast service is a key result area in an information office, then the processes for developing and delivering information might be critical processes.

• If short lead times and low work-in-process (WIP) inventories are key result areas on the shop floor, then the processes for scheduling and controlling shop orders might be critical processes..

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STEP 7 Continued

• Measures of success are the way you determine whether or not improvement is being attained. How will you know if it’s getting better? How will you measure and monitor?

Measurable Objective:

• Once you know what you will measure, determine your objectives. How much better do you want to strive to be? By when?

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What gets measured and rewarded, gets done.

Setting targets drives behavior and avoids arguments of success and failure.

Strategy/Action Plan Targets

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REQUIREMENTS AND CHARACTERISTICS OF QUALITY OBJECTIVES

• Linked to the business plan and vision• Have quantitative measures• Be challenging, yet realistic and achievable• Pertain to the key result areas and critical processes• Defined for the short term (6 – 12 months) and the longer

term ( 1 - 3 years)• Be communicated and understood by everyone• Have defined strategies and tactics to achieve them

Are These Good Objectives?

• Reduce the amount of scrap and rework in all production areas?

• Improve customer satisfaction

• Increase profits by 20%

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STEP 8 DEFINE YOUR IMPLEMENTATION PLAN

Once the key result areas, critical processes, measures, objectives and strategies have been defined to achieve the vision, the next questions are:

• What is your plan for getting it done?

• Who will do what by when, and how?

• How and who will follow up and monitor progress?

• What products will result and who will receive them?

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Components of a Change Plan*

1. Create a leading change design team (influential and resilient people).

2. Document the case for why change is necessary.3. Develop a preliminary vision for the change.4. Define the impacts on those affected by the change

(Win-Win aspects). 5. Create your preliminary strategy and action plan. 6. Identify measures of success. 7. Develop and use your communication strategy.8. Develop and use your training strategy. - A change plan gives time for reflection and re-thinking of the options.

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Assess the Organization’s Environment

MORE KEY QUESTIONS:• Is the organization’s culture ready for

change? •Has the change initiative been

defined with sufficient focus and clarity?

•What competencies need to be developed in the organization’s people?

* From Leading Change Training, Jeff and Linda Russell, 2003

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Introduce the Change

• What tools or strategies are needed to assist in this activity?

• Focus groups• Company meetings, newsletters, posters• Outside speakers on “their success”• Risk-free feedback mechanisms• Pilot studies results (if any)• __________________________

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Stabilize and Maintain the Change

• What tools or strategies are needed to assist in this activity?

• Transition Monitoring Teams (TMT)• Risk-free feedback mechanisms• New reporting relations/structures• Revised measures and incentives• Remove the “old way” (Can’t go back)• __________________________

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Discussion & Questions