Innovation Extracts provides a quick look at current thought regarding leadership and management of planning and improvement initiatives.

If you have any questions or comments about what you read here, or if you would like to suggest items for future Innovation Extracts, please contact Barbara Sherlock, Senior Planning and Improvement Associate in the Office of Planning and Institutional Assessment, at 814-863-8721 or psupia@psu.edu.

Quality Endeavors Issue No. 144 November 2011

Stanley A. Marash with Paul Berman and Michael Flynn, Fusion Management: Harnessing the Power of Six Sigma, Lean, ISO 9000:2000, Malcolm Baldrige, TQM and Other Quality Breakthroughs of the Past Century

In preparation for a conference on the future of quality management in the late 1990s, Stanley A. Marash was able to easily put together a list of 32 quality programs that, since 1960, had come and, often, gone, including Benchmarking, Management by Objectives, Quality Circles, Total Quality Control, and Just-in-Time. (For another look at this, see “The Evolution of Process Improvement” in Quality Endeavors Issue No. 123, October 2009.) Organizations seemed to try a new approach every three years or so. Marash decided to look for patterns to indicate why efforts succeeded or failed. The findings are presented in Fusion Management: Harnessing the Power of Six Sigma, Lean, ISO 9000:2000, Malcolm Baldrige, TQM and Other Quality Breakthroughs of the Past Century (2004, QSU Publishing Company, Fairfax, VA).

Marash identified four key reasons for failure across the programs:

  1. Lack of executive leadership: Management needs to demonstrate commitment through time and actions, not merely words. Leadership at the highest level, not just the mid-level, must be involved.
  2. Failure to deploy: The program must be supported beyond the start-up or pilot initiatives. Resources are needed to work on harder tasks, not just the low hanging fruit, with emphasis on content and accomplishments rather than buzz words and language. The program must be institutionalized to keep it going.
  3. Seeking shortcuts: The organization needs to research, become familiar with, and adopt the whole program, not just some components or a veneer.
  4. Inadequate measurement: Measures need to be established for outcomes and significant results related to customer satisfaction, not just internal interim processes and activities.

He saw a pattern in which a particular approach was successful for one organization and received publicity. Other organizations then decided to apply that approach. What was often adopted was a ‘diluted’ version. Adopters did not fully understand the approach, had no clear goals, wanted results without effort, and established no way to clearly measure results. As a result, within the organization there was frustration and disillusion, little if any improvement, and the energy for the change was lost.

Marash thus developed what he called Fusion Management, with the following components:

  1. Leadership drives the process: Senior executives need to believe in it and be willing to commit resources.
  2. The enterprise sets stretch goals: There are goals for both incremental continual improvement and significant breakthroughs.
  3. Strategic plans are integrated: It is clear where the organization wants to go and how to get there – what to focus on in improvement initiatives.
  4. Customer requirements are balanced with business results: There are both internal and external goals and measures, for the short and long term, and all stakeholders are included in planning and setting priorities.
  5. Key measures of success are tied to the strategic business plan: It is clear which actions will move the organization forward.
  6. The management system is process focused: There is a systemic approach to planning and decision making, with a cross-functional approach rather than internal turf wars.
  7. Methods, tools, and sequences are customized: The organization is ready to use all improvement tools, where they apply and best fit.

This is an iterative process. Learn and build on past experience and success for future results, rather than repeatedly starting over with ‘new’ programs.

Quality Endeavors Issue No. 142 September 2011

Jim Collins – How the Mighty Fall and Why Some Companies Never Give In

In his keynote presentation at the 2011 National Association of College and University Business Officers (NACUBO) convention in July, Jim Collins shared findings from his most recent book, How the Mighty Fall and Why Some Companies Never Give In 2009, HarperCollins). In his earlier writing, including Built to Last: Successful Habits of Visionary Companies (with Jerry Porras, 1994, HarperBusiness) and Good to Great: Why Some Companies Make the Leap ... And Others Don't (2001, HarperBusiness) and the monograph "Good to Great and the Social Sectors" (2005, Jim Collins) addressing non-profit organizations, Collins focused on what made organizations successful. He identified organizational characteristics and behaviors such as identifying and maintaining the core values and purpose of the organization, building momentum, having the right people in the organization, setting 'big, hairy, audacious goals', and the concept of 'Level 5'leaders, those more interested in the long-term wellbeing of the organization than in their own fame and renown.

Collins' research has used matched pairs of organizations. In his earlier research he matched those that did very well over the long term compared to those that were only good, or did not last. In his current work, he used the same comparative approach, this time using matched pairs of organizations that failed and those that did not, to look for patterns in what was different between the pairs. As Collins points out on p. 8, "Every institution…no matter how great… [is] vulnerable to decline."

Collins found five stages of decline and failure. Within an organization the stages may overlap, and the time an organization remains in each may vary.

In Stage 1, Hubris Born of Success, the organization takes its success for granted. It neglects the need to continue the learning and maintain the momentum developed earlier in achieving success. It loses sight of its core purpose and value. This can lead to Stage 2, Undisciplined Pursuit of More. The organization pursues growth without discipline or focus. It neglects its core business and takes actions inconsistent with its core values and purpose. In Stage 3, Denial of Risk and Peril, there are early internal warning signs of developing problems and being off track, but external data still look good, and any problems are blamed on external factors. If there are attempts to correct the problems, they take the form of high-risk initiatives without data to support them. At Stage 4, Grasping for Salvation, the problems are apparent to all. There may be panic. Often there is a search for a leader who will save the organization or a fast change that will turn things around. Unfortunately, this search for a quick fix or a silver bullet often fails, leading to Stage 5, Capitulation to Irrelevance or Death. The organization may fail, be bought out by another organization, or keep looking for a quick fix until it runs out of resources and dies.

Collins points out that this path is not inevitable. It is possible at any stage of the decline for the organization to move to a stage of Recovery and Renewal, and rebuild and recover. To make this turn, the organization needs to recognize the problems and get back to the fundamentals that made it great – identifying its core values and purpose, having the right people in the organization, building and maintaining momentum, and focusing on the long-term sustainability and growth of the organization.

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