Merrill, Peter Do It Right The Second Time, Second Edition Benchmarking Best Practices in The Quality Change Process

Do It Right the
Second Time
Benchmarking Best Practices in the
Quality Change Process
Second Edition
H1320 Merrill.indd i 3/13/09 4:57:54 PM

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H1320 Merrill.indd ii 3/13/09 4:57:54 PM

Do It Right the
Second Time
Benchmarking Best Practices in the
Quality Change Process
Second Edition
Peter Merrill
ASQ Quality Press

Milwaukee, Wisconsin
H1320 Merrill.indd iii 3/13/09 4:57:54 PM

American Society for Quality, Quality Press, Milwaukee 53203
2009 by American Society for Quality
All rights reserved. Published 2009
Printed in the United States of America
15 14 13 12 11 10 09 5 4 3 2 1
Library of Congress Cataloging-in-Publication Data
Merrill, Peter.
Do it right the second time: benchmarking best practices in the quality
change process / Peter Merrill.2nd ed.
p. m.
c
ISBN 978- 0-87389-733-4
1. Benchmarking (Management) 2. Total quality management. I. Title.
HD62.15.M47 2009
658.5'62dc22
2009007556
No part of this book may be reproduced in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher.
Publisher: William A. Tony
Acquisitions Editor: Matt Meinholz
Project Editor: Paul OMara
Production Administrator: Randall Benson
ASQ Mission: The American Society for Quality advances individual, organiza-
tional, and community excellence worldwide through learning, quality improve-
ment, and knowledge exchange.
Attention Bookstores, Wholesalers, Schools, and Corporations: ASQ Quality
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To place orders or to request a free copy of the ASQ Quality Press Publications
Catalog, including ASQ membership information, call 800-248-1946. Visit our
Web site at www.asq.org or http://www.asq.org/quality-press.
Printed on acid-free paper
H1320 Merrill.indd iv 3/13/09 4:57:54 PM

To my parents, Bill and Phyllis Merrill,
for introducing me to the wonderful journey of life,
and to my daughters, Rachel and Sarah,
for reminding me to stop and smell the roses.
H1320 Merrill.indd v 3/13/09 4:57:55 PM

H1320 Merrill.indd vi 3/13/09 4:57:55 PM
Contents
List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxv
PART I THE REASON . . . . . . . . . . . . . . . . . . . . 1
Chapter 1 Why Are We Doing This? . . . . . . . . . . . 3

Being Successful . . . . . . . . . . . . . . . . . . . 4
How Do We Become Successful? . . . . . . 5
The Customer Decides . . . . . . . . . . . . . . . 6
How Should We Use This Knowledge? . . 9
What Stops Us from Succeeding? . . . . . . 10
So How Much Do We Waste? . . . . . . . . . 11
How Do We Find This Waste? . . . . . . . . . 12
How Do We Eliminate This Waste? . . . . . 14
Chapter 2 The Customer . . . . . . . . . . . . . . . . . . . . . 17

Leaders Must Talk to the Customer . . . . . 18
Who Is the Customer? What Does the
Customer Want? . . . . . . . . . . . . . . . . . 19
Customers Must Tell Their Suppliers . . . 20
vii
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viii Contents
Measuring Customer Satisfaction . . . . . . 21

A Uniform Exception, a Shining
Example . . . . . . . . . . . . . . . . . . . . . . . 22
PART II THE FOUNDATION . . . . . . . . . . . . . . . 27
Chapter 3 The Vision . . . . . . . . . . . . . . . . . . . . . . . . 29

Sharing the Vision . . . . . . . . . . . . . . . . . . 30
Renovating Your Organization . . . . . . . . . 31
The Retreat Approach to Visioning . . . 31
Visioning in Stages . . . . . . . . . . . . . . . . . 32
Developing the Vision . . . . . . . . . . . . . . . 33
Communicating the Vision. . . . . . . . . . . . 34
Success Breeds Success . . . . . . . . . . . . . . 34
Chapter 4 Quality Values. . . . . . . . . . . . . . . . . . . . . 37

Values: The Foundation of a Culture . . . . 38
Who Defines Quality: A Basic Value . . . . 39
Respect for the Individual . . . . . . . . . . . . 40
The Value of Education . . . . . . . . . . . . . . 40
Sustainability and Valuing People . . . . . . 41
The Value of Prevention . . . . . . . . . . . . . . 41
How Do We Make Prevention Happen? . 43
The Equipment Myth . . . . . . . . . . . . . . . . 43
Continuous Improvement . . . . . . . . . . . . . 44
A Policy or Value Statement . . . . . . . . . . 44
Chapter 5 Culture . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Culture and Shared Values . . . . . . . . . . . . 49
The Desire to Change Culture . . . . . . . . . 52
Generations in the Workplace . . . . . . . . . 52
Culture Clash . . . . . . . . . . . . . . . . . . . . . . 53
What Culture Do You Want? . . . . . . . . . . 54
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Contents ix
A Culture to Aspire To . . . . . . . . . . . . . . . 54
Where Do We Go Now?. . . . . . . . . . . . . . 56
PART III THE CHANGE. . . . . . . . . . . . . . . . . . . . 59
Chapter 6 Resistance to Change . . . . . . . . . . . . . . . 61

Learning How to Drive . . . . . . . . . . . . . . 61
Resistance at Every Level . . . . . . . . . . . . 63
Barriers to Change . . . . . . . . . . . . . . . . . . 66
National Culture . . . . . . . . . . . . . . . . . . . . 67
The Stress of Change . . . . . . . . . . . . . . . . 68
The Time to Invest in Change . . . . . . . . . 69
Chapter 7 The Change Process . . . . . . . . . . . . . . . . 75

Jurans and Demings Insights . . . . . . . . . 76
A Model for Change . . . . . . . . . . . . . . . . 77
Focusing on Process Improvement . . . . . 78
Focusing on People Improvement . . . . . . 80
The Balance of Hard and Soft Skills . . . . 82
Chapter 8 The Quality Management Team:

Agents for Change . . . . . . . . . . . . . . . . . 87
The Financial Analogy . . . . . . . . . . . . . . . 88
Implementing the Quality Plan . . . . . . . . 90
Depth and Span of Communication . . . . . 90
How to Support Implementation of
the Plan. . . . . . . . . . . . . . . . . . . . . . . . 92
Setting the Standard . . . . . . . . . . . . . . . . . 96
Chapter 9 Leadership . . . . . . . . . . . . . . . . . . . . . . . 99
Team Values . . . . . . . . . . . . . . . . . . . . . . . 101
Communicating Values . . . . . . . . . . . . . . 103
Leadership Actions. . . . . . . . . . . . . . . . . . 104
Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . 106
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x Contents
The Teams Core Activity . . . . . . . . . . . . 106

Measurement . . . . . . . . . . . . . . . . . . . . . . 107
How Can I Show Quality Leadership
to My Team? . . . . . . . . . . . . . . . . . . . 111
PART IV THE PROCESSES . . . . . . . . . . . . . . . . . 115
Chapter 10 Process Ownership . . . . . . . . . . . . . . . . . 117

Building the Foundation . . . . . . . . . . . . . 118
Passing the Buck . . . . . . . . . . . . . . . . . . . 119
Establishing Ownership with Process
Mapping . . . . . . . . . . . . . . . . . . . . . . . 120
A Lesson Learned . . . . . . . . . . . . . . . . . . 121
The Mapping Methodology . . . . . . . . . . . 122
The Product Problem . . . . . . . . . . . . . . 125
Surveying the Internal Customer . . . . . . . 126
Mapping the Rest of the Business . . . . . . 127
Chapter 11 Measurement . . . . . . . . . . . . . . . . . . . . . 131

Planning Measurement. . . . . . . . . . . . . . . 132
Measurement Steps . . . . . . . . . . . . . . . . . 132
Changing Behavior . . . . . . . . . . . . . . . . . 134
Creating Measurement Partnerships . . . . 135
Using Measurement Tools . . . . . . . . . . . . 136
Teamwork in Measurement . . . . . . . . . . . 137
Monitoring and Measurement . . . . . . . . . 138
Using Statistical Process Control . . . . . . . 138
Six Sigma . . . . . . . . . . . . . . . . . . . . . . . . . 140
Avoiding Failure. . . . . . . . . . . . . . . . . . . . 142
Chapter 12 Cost of Quality . . . . . . . . . . . . . . . . . . . . 145

Why the Great Interest in Cost of
Quality? . . . . . . . . . . . . . . . . . . . . . . . 147
Understanding the Concept of Cost
of Waste . . . . . . . . . . . . . . . . . . . . . . . 148
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Contents xi
Integrating Cost of Waste and Continuous

Improvement . . . . . . . . . . . . . . . . . . . 151
Knowing How to Use Cost of Waste . . . . 154
Can I Do This Too? What Will I Get Out
of It? . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Chapter 13 Corrective Action . . . . . . . . . . . . . . . . . . 159

What Is Corrective Action? . . . . . . . . . . . 160
Goal Setting . . . . . . . . . . . . . . . . . . . . . . . 162
Bigger Problems. . . . . . . . . . . . . . . . . . . . 163
Problem Solving. . . . . . . . . . . . . . . . . . . . 164
The SWAT Team Trap . . . . . . . . . . . . . . . 166
The Corrective Action System . . . . . . . . . 166
The Corrective Action Administrator . . . . 169
Using Failure Modes and Effects
Analysis . . . . . . . . . . . . . . . . . . . . . . . 171
Preventive Action . . . . . . . . . . . . . . . . . . . 178
PART V THE PEOPLE . . . . . . . . . . . . . . . . . . . . 181
Chapter 14 Education . . . . . . . . . . . . . . . . . . . . . . . . 183

Acquiring Skills and Knowledge for
Improvement . . . . . . . . . . . . . . . . . . . 185
Top Managements Quality Education
Program . . . . . . . . . . . . . . . . . . . . . . . 185
Promoting Education in the Rest of the
Organization . . . . . . . . . . . . . . . . . . . . 189
Continuing Education . . . . . . . . . . . . . . . 190
Training and Competence . . . . . . . . . . . . 192
Performance Management . . . . . . . . . . . . 193
Chapter 15 Communication . . . . . . . . . . . . . . . . . . . 197

Interpersonal Communication . . . . . . . . . 198
Vertical Communication . . . . . . . . . . . . . 202
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xii Contents
Horizontal Communication . . . . . . . . . . . 203

Providing Communication Tools . . . . . . . 204
Chapter 16 Teamwork . . . . . . . . . . . . . . . . . . . . . . . . 207

The Team . . . . . . . . . . . . . . . . . . . . . . . . . 209
The Meeting . . . . . . . . . . . . . . . . . . . . . . . 213
Virtual Meetings. . . . . . . . . . . . . . . . . . . . 221
Partnering Externally . . . . . . . . . . . . . . . . 223
Chapter 17 Recognition . . . . . . . . . . . . . . . . . . . . . . . 227

Recognition Reinforces Change . . . . . . . 228
Develop a System. . . . . . . . . . . . . . . . . . . 230
PART VI THE CONTINUITY . . . . . . . . . . . . . . . 235
Chapter 18 Continuation . . . . . . . . . . . . . . . . . . . . . . 237

Planning the Improvement Process . . . . . 239
Driving the Quality Improvement Plan . . 242
The Old Enemy: Time . . . . . . . . . . . . . . . 243
Chapter 19 Using the Baldrige Criteria to Assess

Quality Systems . . . . . . . . . . . . . . . . . . . 249
Categories of the Baldrige Criteria . . . . . 250
Criticism of the Baldrige Framework . . . 260
Chapter 20 ISO 9000: How to Make It Happen . . . 263

The Structure, Thinking, and Dynamic . . 264
The Approach for System
Development . . . . . . . . . . . . . . . . . . . 266
The Leadership Role . . . . . . . . . . . . . . . . 272
The Planning Role (Plan, Do,
Check, Act) . . . . . . . . . . . . . . . . . . . . 273
Setting Objectives . . . . . . . . . . . . . . . . . . 273
The Resources (Plan, Do, Check, Act) . . 275
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Contents xiii
If You Dont Keep Score, Its Only

Practice (Plan, Do, Check, Act) . . . . 276
The Management Review (Plan, Do,
Check, Act). . . . . . . . . . . . . . . . . . . . . 277
Focus on Your Principles . . . . . . . . . . . . . 279
Chapter 21 ISO 9000: Less Procedures, More

Planning . . . . . . . . . . . . . . . . . . . . . . . . . 283
How ISO 9000 Made a Bad Situation
Worse . . . . . . . . . . . . . . . . . . . . . . . . . 284
Plan, Do, Check, Act . . . . . . . . . . . . . . . . 286
The Business Process Map. . . . . . . . . . . . 288
The Quality PlanThe Organizations
Objectives. . . . . . . . . . . . . . . . . . . . . . 288
The ManualA Business
Description . . . . . . . . . . . . . . . . . . . . . . 289
Quality System Procedures . . . . . . . . . . . 291
Procedures: A Tool for Process Control,
Not People Control . . . . . . . . . . . . . . 291
References and Records: A Source of
Confusion . . . . . . . . . . . . . . . . . . . . . . 293
DataInformationKnowledge
Intellectual Property . . . . . . . . . . . . . . 294
Corrective and Preventive Action:
The Documents that Create Value . . . 296
Chapter 22 Internal AuditInvolve People,

Create Value . . . . . . . . . . . . . . . . . . . . . . 301
The Old Thinking . . . . . . . . . . . . . . . . . . . 301
Process Audit . . . . . . . . . . . . . . . . . . . . . . 302
Audit Structure . . . . . . . . . . . . . . . . . . . . . 303
Planning the Audit (Phase 1) . . . . . . . . . . 303
The Desk Study . . . . . . . . . . . . . . . . . . . . 311
The Audit Interviews (Phase 2) . . . . . . . . 312
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xiv Contents
Reporting Findings (Phase 3). . . . . . . . . . 314

The Management Review and Follow-Up
(Phase 4). . . . . . . . . . . . . . . . . . . . . . . 315
Chapter 23 Choosing from the Menu . . . . . . . . . . . . 321

The Quality Management Approaches. . . 322
Implementation Problems . . . . . . . . . . . . 323
The Principles . . . . . . . . . . . . . . . . . . . . . 324
Critical Success Factors . . . . . . . . . . . . . . 332
The Prizes. . . . . . . . . . . . . . . . . . . . . . . . . 332
Excellence . . . . . . . . . . . . . . . . . . . . . . . . 333
Chapter 24 The New Organization . . . . . . . . . . . . . . 337

The New Vision . . . . . . . . . . . . . . . . . . . . 338
Integrated Management Systems . . . . . . . 342
External Threats and Opportunities . . . . . 343
The Agile Organization . . . . . . . . . . . . . . 344
Your Quality Management System at
the Next Level: Innovation . . . . . . . . . 346
Quality Management and
Self-Management . . . . . . . . . . . . . . . . 347
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
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List of Figures
Figure 6.1 How do we handle change? . . . . . . . . . . . . . . . . . . . 71

Figure 7.1 Key components of change. . . . . . . . . . . . . . . . . . . . 77
Figure 7.2 Process improvement model . . . . . . . . . . . . . . . . . . . 78
Figure 8.1 Implementation timeline . . . . . . . . . . . . . . . . . . . . . . 89
Figure 8.2 Ideal depth and span of organizational
communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Figure 8.3 QMT process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Figure 8.4 A team job description . . . . . . . . . . . . . . . . . . . . . . . 95
Figure 9.1 Levels of communication . . . . . . . . . . . . . . . . . . . . . 103
Figure 9.2 A simple check sheet for tracking problem
occurrences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Figure 9.3 A log for analyzing time use . . . . . . . . . . . . . . . . . . 109
Figure 9.4 A form for surveying internal customers and
suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Figure 10.1 Instructions for process mapping . . . . . . . . . . . . . . . 123
Figure 10.2 Business level process map . . . . . . . . . . . . . . . . . . . 124
Figure 10.3 Tangible and intangible product . . . . . . . . . . . . . . . . 125
Figure 10.4 An internal process map (Human Resources
Canada) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Figure 11.1 Measurement plan . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Figure 11.2 A check sheet and graph on one simple form. . . . . . 136
Figure 11.3 An SPC chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Figure 11.4 The Six Sigma concept . . . . . . . . . . . . . . . . . . . . . . . 141
Figure 12.1 The cost of waste . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Figure 12.2 A process diagram for corrective action . . . . . . . . . . 149
Figure 12.3 Cost of waste calculation . . . . . . . . . . . . . . . . . . . . . 150
Figure 12.4 Agenda for a one-day cost of quality workshop . . . . 153
Figure 12.5 A simple check sheet for problem measurement . . . 156
Figure 13.1 A performance graph with a goal line . . . . . . . . . . . 163
Figure 13.2 Cost of problem versus cost of solution . . . . . . . . . . 163
xv
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xvi List of Figures
Figure 13.3 Corrective action flowchart . . . . . . . . . . . . . . . . . . . 168

Figure 13.4 A sample form for requesting corrective action . . . . 169
Figure 13.5 A sample corrective action administrator log . . . . . . 170
Figure 13.6 Management review . . . . . . . . . . . . . . . . . . . . . . . . . 171
Figure 13.7 FMEA chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Figure 13.8 FMEA rating scale . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Figure 13.9 FMEA rating scale for healthcare. . . . . . . . . . . . . . . 177
Figure 14.1 A QMT education agenda . . . . . . . . . . . . . . . . . . . . 187
Figure 14.2 An agenda for a quality training course for
employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Figure 16.1 Teamwork questionnaire. . . . . . . . . . . . . . . . . . . . . . 216
Figure 16.2 Teamwork questionnairescoring . . . . . . . . . . . . . . 220
Figure 16.3 A meeting evaluation questionnaire . . . . . . . . . . . . . 224
Figure 17.1 An example of a Bravogram . . . . . . . . . . . . . . . . . . . 233
Figure 18.1 Implementation timeline . . . . . . . . . . . . . . . . . . . . . . 240
Figure 18.2 A moment of truth matrix . . . . . . . . . . . . . . . . . . . 243
Figure 19.1 Baldrige Award criteria frameworka systems
perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Figure 20.1 The PDCA cycle in ISO 9000 . . . . . . . . . . . . . . . . . 265
Figure 20.2 The ISO 9001 requirements . . . . . . . . . . . . . . . . . . . 266
Figure 20.3 Business process map . . . . . . . . . . . . . . . . . . . . . . . . 269
Figure 20.4 Levels of objectives . . . . . . . . . . . . . . . . . . . . . . . . . 270
Figure 20.5 Objectives timeline . . . . . . . . . . . . . . . . . . . . . . . . . . 274
Figure 20.6 Measurement plan . . . . . . . . . . . . . . . . . . . . . . . . . . 276
Figure 20.7 The improvement cycle . . . . . . . . . . . . . . . . . . . . . . 278
Figure 21.1 1994 structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287
Figure 21.2 Dynamic documentation . . . . . . . . . . . . . . . . . . . . . . 287
Figure 21.3 System level procedures . . . . . . . . . . . . . . . . . . . . . . 291
Figure 21.4 Process flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
Figure 21.5 Information inputs and outputs . . . . . . . . . . . . . . . . . 294
Figure 21.6 Mandatory records . . . . . . . . . . . . . . . . . . . . . . . . . . 295
Figure 22.2 Planning audit resources . . . . . . . . . . . . . . . . . . . . . . 307
Figure 22.3 Audit timeline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308
Figure 22.4 Audit interview sheet . . . . . . . . . . . . . . . . . . . . . . . . 311
Figure 22.5 Audit customer feedback . . . . . . . . . . . . . . . . . . . . . 316
Figure 23.1 The PDCA cycle in ISO 9000 . . . . . . . . . . . . . . . . . 326
Figure 24.1 The innovation process . . . . . . . . . . . . . . . . . . . . . . . 346
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Preface
Q
uality management has been around for many years, and
many aspects of it are timeless. Reading the first edi-
tion of this book illustrates that truth very powerfully.
In this second edition, I have captured many of the devel-
opments of the intervening years since the first edition. The
initiatives that have gained the most attention are, of course,
Six Sigma and lean. Six Sigma was developed and promoted
primarily by Motorola and then by GE; lean was the child of
Toyota.
The early Six Sigma initiatives addressed, in particular, two
of the previous weaknesses of quality management: the diver-
gence from financial management and the lack of accepted
qualifications for practitioners. The Six Sigma approach has
gained attention through publicity of its apparent savings.
However, its attempts to link quality and financial management
have struggled. The focus on qualifications has promoted the
use of an enormous toolbox, most of whose tools are never
used. Ishikawa pointed out that for successful implementa-
tion of quality management, between five and seven tools are
needed. This book points you to those tools such as mapping,
the measurement check sheet, and the basic tools of problem
solving.
xvii
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xviii Preface
At the same time, there have been other advances in quality

management, such as in ISO 9000, which has moved forward
from its down in the weeds quality assurance thinking of the
1990s to system thinking in the new millennium.
Six Sigma has been attractive to large corporations, as it
has enabled them to show short-term cost savings related to a
given process. However, remember the words of W. Edwards
Deming: 90% of the problems on a process are caused by the
system in which the process operates. ISO 9000 has brought
us this system thinking.
Unfortunately, ISO 9000 has suffered from the obsession
with writing procedures. People I talk to still think that is what
the standard is looking for. They miss the all-important mea-
surement requirements in the standard of this new millennium.
Measurement drives improvement. The standard itselfdoc #
ISO/TC176/N525 (2000)says, Document the system, do
not create a system of documents.
Three completely new chapters on ISO 9000 will draw
you into system thinking, discourage overdocumentation, and
encourage the use of measurement to drive improvement. The
new Chapter 23 shows the linkage between ISO 9000, Six
Sigma, and the excellence awards. They are complementary,
not conflicting.
Measurement and improvement then draw us into the
question that everyone has been asking me for the last ten
years: Where to next? As quality specialists, we have become
obsessed with process efficiency and system effectiveness;
we have spent more and more time looking inward and less
and less time stepping out of the box. This was brought home
to me several years ago when I was having lunch with a good
friend. He said to me, You know, I dont want to spend my
life chasing the last percentage of efficiency delivering our
product to a market which is changing and no longer wants
our product.
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Preface xix
Innovation is the answer to where to next? Quality man-

agements improvement activity generates enormous quantities
of knowledge. Too often we throw that knowledge, along with
our time and energy, into incrementally improving internal pro-
cesses instead of engaging in radical or innovative changes in
our products and processes and business systems. I address this
in the final chapter.
Finally, I want to show a little of what drew me into writing
the first edition. This raison dtre still stands for the second
edition. The first edition and its title were driven by the fact that
so many organizations make wrong choices when developing
quality management.
I am a passionate believer in simplicity. The simpler you
make quality management, the more people you will draw in.
The more people you draw in, the more successful you will
be. This book embraces the essentials of quality management,
presents them in a simple format, and gives you a sense of flow
as you implement.
We can all see how the events in our lives have drawn us to
the place where we are at this moment. We have made many
choices along the way. Some choices were tough, some were
easy. The choices I have made have led me inextricably into
quality management and innovation and have influenced why
I wrote this book.
My grandfather taught chemistry at Batley Grammar School
in Yorkshire, England. This was the same school that Joseph
Priestley, the father of modern chemistry, attended during the
eighteenth century. Like many of his contemporaries, Herbert
Merrill came out of World War I a changed man. He entered the
Congregational church and became a Minister of Religion.
Herbert Merrills elder son, William, was a student at Bat-
ley Grammar School. Bill Merrill rejected the world of chemis-
try and became an engineer in the brave new world of electrical
engineering. However, he didnt turn his back on the church.
H1320 Merrill.indd xix 3/13/09 4:57:55 PM

xx Preface
He became a Methodist lay preacher and served the church in

that role for his entire life.
I was born in the industrial heartland of Britain, and as I
progressed through King Edward VI School in Aston, Birming-
ham, I didnt realize the strong influence these two men had
already exerted on my life. For some reason, I found chemis-
try incredibly exciting and continually excelled in the subject.
However, I started to feel there was something beyond chemis-
try and discovered chemical engineering. I read chemical engi-
neering at Birmingham University.
I left Birmingham having ingrained myself with the princi-
ples of process management, little knowing that 25 years later
those skills would become an integral part of my understanding
of the art and science of quality management.
My mother, Phyllis Merrill, taught me the basics in life:
conformance to requirements, a stitch in time saves nine, and
always look for a better way of doing things. She gave me the
basic set of values that are fundamental to making quality a
way of life.
Many years later, when I was going through a period of
huge turmoil, I met a passionate Welsh mystic named James
Angove. In one of our conversations, I jokingly commented that
my family had progressed downward, from grandfather being a
full-time minister of the church, to my father being a part-time
minister of the church, to myself, who, although I held strong
beliefs, rarely, if ever, attended church. I had become a full-
time practitioner of quality management. On the contrary,
James replied, you are a Minister of Business.
My career after Birmingham University led me into a
large British corporation, Courtaulds, and chemical engineer-
ing enabled me to work in the United States, South Africa, and
Scandinavia. It was in Courtaulds that I first encountered people
talking about quality as though it were a great new religion for
H1320 Merrill.indd xx 3/13/09 4:57:55 PM

Preface xxi
the business world. Roger Milliken, in a conversation with Alan

Nightingale, then chairman of the Courtaulds Textiles Group,
had sparked interest in this new approach to running a busi-
ness; Milliken later became world famous as one of the great
champions of quality management. I was by then chief executive
of one of the businesses in Courtaulds. My biggest customer was
Marks & Spencer, the worlds most successful retailer. They said
to me, In five years time, all of our suppliers will need to be
involved in a quality improvement process! Familiar words?
As a chief executive with the Courtaulds Group, I experi-
enced obstacles that you yourself may have experienced in try-
ing to make quality a way of life. To everyones surprise I left
Courtaulds and was given an opportunity most people in the
world of quality would envy. I worked for the next four years
with one of the great gurus of quality. Philip Crosby enabled
me to immerse myself in a world of both thinking and doing
quality, which I would have found nowhere else. I worked
with Crosby initially in the United States and later in Canada.
I moved on from working with him shortly after he retired.
But I am still grateful for the insights and thought processes he
initiated.
I became involved in the American Society for Quality
(ASQ) in Canada and was honored to twice become chair of
the Toronto section, one of the largest in North America. The
friendships and growth in knowledge that have come from ASQ
are something for which I will be eternally grateful.
I have worked with nearly a hundred chief executives around
the world who have experienced the same problems you have:
We did all the education, then it died. We never did get to
using cost of quality. We have created a wonderful culture,
but cant see any evidence of improvement on the bottom line.
We could never work out what to measure, so were not sure
if improvement happened.
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xxii Preface
In the chapters ahead I will show you how several compa-

nies going through the same experiences as you found the right
way to make quality happen: They did it right the second time.
REFERENCE
ISO/TC176/SC2/N525. (2000). Guidance on the Documentation
Requirements of ISO9001:2000. Geneva: International Organiza-
tion for Standardization.
H1320 Merrill.indd xxii 3/13/09 4:57:55 PM

Acknowledgments
T
o the ladies close to mePhyllis Merrill, Rachel
Thomas, Sarah Blake, and Angela McCauley. In spite
of their names differing, they are all in the same family
and they have brought out the softer side to my engineering
education, which is reflected in this book.
To my friends in ASQthe Toronto ASQ Executive and
my friends in Milwaukee. Many years of friendship in Canada
and the United States have encouraged me to keep pushing the
boundaries of knowledge.
To all my friends in ISO, an international community
the Canadian Committee, the Strategic Advisory Group, and
the various Working Groups I have had the privilege to work
with. They have opened my eyes to new places and helped me
understand cultures across the world. That again is reflected
in this book.
xxiii
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H1320 Merrill.indd xxiv 3/13/09 4:57:55 PM
Introduction
M
any organizations are looking back on the quality
initiative they pursued at some time in the last ten
years and saying, It failed. Others are quietly walk-
ing away and letting quality die a silent death. Failure rates as
high as 70 percent are being quoted. However, more than a few
people are saying quality is the best thing that ever happened to
them and they wouldnt be around today without their quality
process.
Looking at these successes, we find they also had failure.
They learned from their failure, though, and moved on to do it
right the second time. Looking at the successful quality pro-
cesses enables us to see where and how we can improve our
own quality improvement process. You could call it bench-
marking other quality processes, or to quote C. S. Wallace Jr.
of the Baldrige-winning Wallace Company of Texas, Some
people call it benchmarking. I call it kinda copyin.
More than anything else, the successful companies never
gave up, and they found that regular self-assessment of their
quality activity was essential. They have defined the quality
process they have been through and have taken time to measure
and understand their quality process. Their quality process had
a plan and a structure, and they applied the principles of con-
tinuous improvement to the quality process itself.
xxv
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xxvi Introduction
Successful quality systems show these common factors:

The people in the organization all know why they are
involved in quality and where they are heading. They
have a clear vision.
The change to the new vision was initiated by the leader-
ship of the organization but the change activity has then
been shared with everyone in the organization.
The change process has clearly defined subprocesses
or components and there is a balance between people
improvement and process improvement.
The performance of the quality process is measured con-
tinuously in order to drive improvement of that quality
process and there is built-in continuity in the change
process.
The people who did not do it right the first time failed to
implement at least one of these four elements in their quality
improvement strategy. In this book well look in turn at each of
these aspects of quality processes and see how some very ordi-
nary people made extraordinary changes in their own lives and
in the lives of the people around them. They learned from their
mistakes. They are people like you and me, and we can all learn
from their experiences, to do it right the second time.
If you want to become a quality organization, you must
first know what one looks like. Nowadays, there are plenty of
them around, but you cant just simply copy other people. You
have to build your own vision and use the best parts of other
peoples ideas.
A number of years ago, a young mountaineer named
Quentin Wahl was starting a small business in the dry clean-
ing industry. He had learned a lot about the industry when he
was a student. He was staggered at the amount of rework and
customer dissatisfaction that occurred because people didnt do
H1320 Merrill.indd xxvi 3/13/09 4:57:55 PM

Introduction xxvii
it right the first time. This wasnt the fault of the people; they
wanted to do a good job. Quentin built a picture in his mind of
a company in the industry in which people did it right the first
time. His vision wasnt just kept to himself. He found a partner
for his journey into quality and customer service. Arnold Ged-
mintas became the doer and Quentin Wahl the thinker as
they built Cadet Uniform Services, a company that developed
over 99 percent customer retention and became a finalist in the
Canadian Award for Business Excellence.
Do you know why your business exists? Is it to make money,
and little else? Or is it a venture people will remember for its
mark on the world?
As we look deeper into these visions, we also see organiza-
tions that have firm principles or values on which the vision is
built. Successful organizations in quality have clear quality val-
ues that are practiced by everyone in the organization. Thomas
Watson Sr. (1963) gave IBM its Basic Beliefs of respect for
the individual, best possible service to our customer, and every
task performed in a superior manner. Before joining Cadet,
prospective employees are asked to study overnight the prin-
ciples of quality that the company supports, and they are given
a long and rigorous interview process to ensure they have the
same value system as the other people in the organization.
The values are what create the culture of the organization.
Believing in such basic principles as conformance to customer
requirements, delivering quality through prevention, and continu-
ous improvement are the foundation stones of a quality culture.
Philip Crosby published his book Quality Is Free in 1979.
His overnight success was actually the result of more than
20 years of hard work. He left ITT and set up his consulting
practice. Although he was not seeking to build a large organi-
zation, the customer was hungry for Crosbys knowledge, and
his organization grew with each customer request. Crosby had
a vision of an organization serving as a role model of quality
H1320 Merrill.indd xxvii 3/13/09 4:57:55 PM

xxviii Introduction
culture to the world. He succeeded in that mission, and created

a company of some 300 people where relationships were based
on trust and respect, and knowledge was shared for the greater
good of the team, not hoarded as a way to leverage power. People
in the company would work at an unbelievable rate because of
their passionate belief in the organization and the set of values on
which it had been founded.
It is easy to assume that everyone has the same values or
beliefs we do. But value systems differ between individuals,
between families, between companies, and between nations.
Successful organizations in quality have established a set of
quality values at the outset, and a big part of the success of the
Crosby approach in the 1980s was Philip Crosbys Four Abso-
lutes, which are a basic set of quality values. Quality values are
the foundation for the quality culture of any organization.
The whole move to a quality organization involves change.
Most of us like variation and change, but few of us like being
changed. The successful quality organizations have built in the
desire to change. The leaders want change and are visibly giv-
ing up old practices. They see the power in working as a lead-
ership team to make change happen. The team understands its
role as a primary agent for change. It is not a corrective action
team. It is a team that plans the change process, but as individu-
als the team members participate in the change activities inside
the organization. Above all, they are a role model for change.
Joseph Juran said, many years ago, You plan and imple-
ment quality in the same way you plan and implement your
finances.
Leadership and leadership commitment are repeatedly cited
as the cause of success or failure in a quality process, and yet
everyone has a leadership role to play. Ontario Hydros gen-
eral manager in Pickering, after two years in a quality process,
found that his greatest need was more training in leadership. He
trains every new team leader in leadership skills before placing
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Introduction xxix
that person on their project. This is common sense when you

think about it, and yet we always want to get on with the job
instead of developing skills first.
Our perception of a good leader has become more educated.
We now see ourselves seeking a leader who listens and is hon-
est, rather than one who motivates and orders. The Malcolm
Baldrige National Quality Award criteria, for example, look
for how the companys leadership incorporates clear values,
company directions, high performance expectations, a strong
customer focus, and continuous learning.
The change to a quality and customer service organiza-
tion requires a change process, and many overlook this truth.
The simplest truth about change is that it is continuous, and
you must either change or face the fate of the dinosaurs. The
second truth is that change must be led; but remember, people
will not be changed. Change has to ultimately be shared with
everyone in your organization. Most people accept these truths
intellectually, but not always emotionally. The third truth about
changing to a quality organization is that there must be a bal-
ance between people improvement and process improvement.
Too many organizations focus on one or the other and dont
keep that balance. You need the process analysis, measurement,
and cost of quality, but they must be balanced with education,
development of communication skills, and recognition of peo-
ples improvements.
This need for balance between people and process was seen
over 60 years ago by W. Edwards Deming, when he worked
with Elton Mayo (soft skills) and Walter Shewhart (hard skills).
People are talking today as if it is a new revelation. Lets give
credit where it is due!
We see some interesting lessons on people and process
improvement from organizations that have succeeded in con-
tinuous improvement. This book will share some of their sto-
ries to learn from.
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xxx Introduction
PROCESS IMPROVEMENTS
On the process side of quality, process ownership is the criti-
cal but often overlooked foundation work for process manage-
ment. In the Scarborough branch of Human Resources Canada,
the process owners mapped their process and streamlined it to
reduce cycle time and serve their clients faster. The people in
the office know who their internal customers and suppliers are,
and have invested time and effort in defining the requirements
of their customers. This work has enabled the employees to
focus on the requirements where problems exist, and to move
to the next stage of process improvement: measurement.
Bart DiLiddo, the former CEO of BF Goodrich, was asked
to name the most critical success factor in his quality process.
He responded without hesitation: Meaningful measurement.
Measurement doesnt have to be technical or complicated, but
it does have to be meaningful to the customer. In a success-
ful organization, measurement involves everyone, not just the
technical people. The measurement data are used to find the root
cause of problems, and to measure the effectiveness of their
solutions.
The third element of process improvement, cost of qual-
ity, is one of the most powerful tools in your quality toolbox.
It is widely misunderstood and is the subject of great contro-
versy. One division of telecommunications specialist Mitel
used cost of quality to drive its corrective action system and
understood how cost of quality is really a medium for translat-
ing your wealth of measurement data into the dollar language
of business. David Rayfield, the managing director, was proud
of how cost of quality had saved millions, and enabled manage-
ment to select their corrective action projects on a dispassion-
ate return on investment basis instead of the more usual whim
of the moment. A major international food company carrying
out a first cut on cost of quality discovered that its annual
H1320 Merrill.indd xxx 3/13/09 4:57:55 PM

Introduction xxxi
budgeting process was one of the biggest cost wastes, losing

half a million dollars a year simply because the process and its
requirements had not been clearly defined and communicated.
What a great incentive for process improvement!
Cost of quality is the link between measurement and correc-
tive action. As Ive learned from personal experience, its impor-
tant to set the scope for action at the outset of the cost of quality
assessment; otherwise the program may be discredited when the
actions proposed are too expensive or otherwise undoable.
The corrective action system should be launched company-
wide only after establishing process ownership, measurement,
and a cost of quality system. Cost of quality is then used to pri-
oritize the projects you will take on, and people will discover
that capital projects are not where the big opportunities exist.
Its interpersonal communications and operating procedures
where the biggest improvements are often needed.
PEOPLE IMPROVEMENTS
All too often organizations focus on the tangible process
improvement areas and forget the people improvement. Peo-
ple improvement is the right-brain part of the change model.
The first activity in people improvement is education. Most
organizations that have worked on quality have realized the
importance of the educational investment, and yet many have
invested wholesale and without a real plan. Our common per-
ception of education is that it should be done in huge chunks.
This is partly because of the school paradigm we all carry,
and partly because we find education a nuisance and a disrup-
tion to our daily routine, so we try to get it over with quickly.
The other side of the coin is being trapped in education. Suc-
cessful companies have avoided these problems by using just-
in-time education.
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xxxii Introduction
An education specialist named Treat Hull (a hard name to

forget) said, The half-life of education is about 30 days. In
other words, unless you use it, you lose it! These companies
all followed the learn a bit, do a bit approachprobably
112 to 2 12 hours each week in which people acquired skills or tools
to be used in the upcoming week. The action assignment dur-
ing the week is critical, linking each of the education sessions
to the real world. It takes a lot more organizing, but its infi-
nitely more effective.
One effect of your education will be that people talk to each
other far more than they did in the past. Poor communication is
the biggest obstacle most people cite as stopping their company
from delivering quality. Communication has to be improved
at an interpersonal level as well as at the organizational level.
Developing interpersonal communication skills is a very long-
term process, and needs to be built in to all the other education,
teamwork, and process management work you carry out. The
company communication systems can be developed far more
quickly. Chapter 15 describes the team briefing method pio-
neered by an organization called the Industrial Society, which
used the technique to overcome major communication barriers
typical of British companies, where the old class structure and
schooling structure have thwarted communication for decades.
Better communication is a foundation for improved team-
work. Building a team is one of the popular views of what qual-
ity is all about. It is an important component, but it is only a
component. If you have worked on team performance, team
building, or teamwork, you know that these are only a part of
the quality jigsaw. They have not given you quality. Simi-
larly, if you have worked on measurement or reengineering or
problem solving you have only worked on part of the quality
process.
John Billing, the director of human resources at Courtaulds,
saw the importance of this teamwork component in an orga-
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Introduction xxxiii
nization that had a high technical and product focus. A chal-

lenging whitewater rafting expedition on the Chattooga River
created a bond between the managers in that organization that
would be hard to break. Different organizations have differing
aptitudes for teamwork. Your organization must have a high
teamwork aptitude if it is going to succeed in quality. It means
trusting and respecting each other.
Recognition of effort and accomplishment is critical along
the way. As you go through these changes, people will feel
insecure. The simple act of saying thank you to each person
who does something the new way is a critical factor in rein-
forcing new behaviors based on your new values.
Bell Mobility developed a recognition system that was one
of the most exciting you could come across. This was due in
large part to company president Bob Lathams passionate belief
in recognition. He also provided everyone with tools for recog-
nition so that it became easy for a person to thank someone else
who did a good job or who helped you do a good job.
CONTINUATION OF IMPROVEMENT
Building continuity into your quality process is a tough chal-
lenge, and one of the best ways of maintaining ongoing improve-
ment in your quality process is by measuring or evaluating its
effectiveness.
Baldrige Award criteria assessment has proved one of the
most complete methods so far for evaluating an organizations
quality plan. It is comprehensive, though many have found it
cumbersome. Describing in writing the activities inside an orga-
nization has become too time-consuming for most companies.
This has led to a number of simplified versions of the Baldrige
criteria that enable companies to conduct a self-assessment on
their quality process.
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xxxiv Introduction
Of the 1000-point scale used in a Baldrige assessment, a

reactive organization will score up to 400 points. The major-
ity of quality conscious companies score between 400 and
600 points. Above this band we find the aspiring world class
companies that are developing their own quality processes and
benchmarking against best of breed with relative ease. It is
the new kids on the block with scores below 300 that have
the difficulties, and many of them have seized on ISO 9000 to
solve their problem. ISO 9000 does not directly enable a com-
pany to measure the effectiveness of its quality process but it
does provide an excellent foundation for beginning the process.
ISO gives discipline to the operation of an organization and
enables it to find out from an independent third party how well
it is doing.
Many organizations, such as Sears, have adapted the
ISO 9001 requirements and applied a score system to the audit
checklist. Sears used this to assess their suppliers as well as
themselves. Howard Tremaine managed the Sears Supplier
Quality Partnership, and he and his team gave each Sears sup-
plier a percentage score. This score gave the supplier an idea
of overall performance, enabling it to focus on the areas of the
business needing improvement.
The thinking-learning organizations then use this infor-
mation to look back at their quality improvement process and
find whether they need to improve measurement, communica-
tion, or some other aspect of the quality process.
The other reason quality beginners are turning to
ISO 9000 is that it enables them to lay those foundation stones
of process ownership and education, while the more quality-
mature organizations are using ISO 9000 to go back and fill
in the missing parts of the foundation. This can be dangerous
thinking for beginners, however, because ISO 9000 does not
fully address the soft skill side of quality. Some companies
think when theyve got ISO 9000, theyve got quality. More
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Introduction xxxv
and more companies are now seeing the need to build in the
teamwork, communication, and recognition activities that are
needed to balance the process improvement.
Whether it is Baldrige, ISO 9000, or some other method of
assessing the organization, companies that use the assessment
feedback to improve their business processes can also use the
information to improve their quality improvement process by
identifying which parts of the improvement process need to be
strengthened.
We now see the continuous nature of this journeywhich
brings me back to my opening remark: More than anything
else, the successful companies never gave up.
REFERENCES
Baldrige National Quality Award. Video Series.
Crosby, Philip B. 1979. Quality Is Free. New York: McGraw-Hill.
Juran, J. M. 1989. Juran on Leadership for Quality: An Executive
Handbook. New York: Free Press.
Watson Jr., Thomas J. A. 1963. Business and Its Beliefs: The Ideas
That Helped Build IBM. New York: McGraw-Hill.
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H1320 Merrill.indd xxxvi 3/13/09 4:57:55 PM
PART I
The Reason
H1320 Merrill.indd 1 3/13/09 4:57:56 PM

H1320 Merrill.indd 2 3/13/09 4:57:56 PM
1
Why Are We
Doing This?
Before the beginning of great brilliance, there must be chaos.

Before a brilliant person begins something great, they must
look foolish in the crowd.
From the I Ching
T
he town of Salisbury in the county of Wiltshire in the
kingdom of England was the scene of enormous activ-
ity between the years of 1220 and 1365, before Shake-
speare wrote his plays and before Columbus sailed the seas.
Among many other activities, you would have seen stonema-
sons cutting huge rocks into blocks that were as much as eigh-
teen inches thick by two feet long by a foot high. These blocks
weighed a quarter of a ton apiece.
A troupe of strolling players entered Salisbury one summer,
and seeing the activity, one of the troubadours approached a
mason and asked him, What art thou doing? The mason gave a
bored look and replied, I am cutting these stones into blocks.
But why in the world wouldst thou do such a thing? ques-
tioned the troubadour. The mason replied, Because I need the
money they pay me for this.
The troubadour was disappointed with the quick response
he received, and rejoined the group of players. A few minutes
farther down the road, the troubadour saw another stonemason,
H1320 Merrill.indd 3 3/13/09 4:57:56 PM

4 Part One: The Reason
who looked far more enthusiastic than the previous mason. Still
curious and without hesitation, the troubadour made a second
approach. I see so many of you cutting the stone; prithee, what
is your task?
The mason looked up and without hesitation replied, I am
part of the team that is helping to build this great cathedral!
The troubadour felt the emotion and excitement and danced
with glee, for he had realized that he was witness to one of the
great events in the history of humanity.
Are the people in your organization cutting stone, or are
they building a cathedral?
Do you know why your business exists? Is it to make money
and little else? Or is it a venture that people will remember for
its mark on the world, in the same way as Salisbury Cathedral,
a magnificent creation that still stands more than 600 years
later, in all its glory?
How do you want your organization to be remembered in
the community and in the world? Will your organization be
remembered as a great cathedral in the community, or as just
a wooden shack that survived four or five years and then col-
lapsed and rotted away?
BEING SUCCESSFUL
Do you want to be successful?
A stupid question? Perhaps. What do we mean by success?
What does it look like? What does it feel like?
Is it winning the lottery? Is it having lots of money? Does it
include long weekends on tropical islands or owning a private
jet? For many people, success means escaping from where they
feel trapped at the moment. Real, lasting success comes when
we enjoy doing what we do every day and do it well.
I once picked up a fortune cookie whose note said, Success
comes from hard work. True up to a point, but the word hard
implies unpleasant, painful work. I want to enjoy my work.
H1320 Merrill.indd 4 3/13/09 4:57:56 PM

Chapter One: Why Are We Doing This? 5
I passed that note to my daughter just before her high school

finals, as a great reminder of the importance of hard work and
also because Id come by another fortune cookie note that said,
The secret of a good opportunity is recognizing it! The impli-
cation is clear. We need to have clear focus and application
in our efforts (hard work), but we must also be sure that our
efforts are pointed in the right direction (a clear vision).
Success in our business endeavors means doing what we
do better than the competition does it, and ensuring that our
customers recognize that we do a good job.
HOW DO WE BECOME SUCCESSFUL?

If you want an organization in which you will have long-
term pride, then you have probably tried some type of quality
improvement activity in the last few years. If so, then you prob-
ably know that you are in the majority if your improvement
activity did not succeed. You tried a quality program because
you wanted to be more successful.
Having asked yourself, Why are we involved in quality?
perhaps you should have also asked, What are we doing? Are
we doing:
Total quality management
Quality improvement
Continuous process improvement
ISO 9000
Six Sigma
Lean
Or perhaps kaizen?
Or are you actually in the process of renaming your failure as
you read this book? This is like saying your child has been so
obnoxious during the terrible twos that you will change their
H1320 Merrill.indd 5 3/13/09 4:57:56 PM

name from Bobby to Billy, or from Karen to Christine, on their

third birthday. Changing the name will not change your chance
of success.
This brings you back to the question, Why are we doing
this? and if your company is asking why about its quality
process, then you need to go right back to the beginning and
ask yourself, Did we ever ask that question in the first place?
You probably did, and you probably got many answers:
Survival
The customer
Increased market share
More profit
To get ISO 9000 certification
To improve the culture
To reduce waste
Did you then take the time to link all those answers together
so that everyone in the organization understood how those
answers relate? All the answers boil down to making your com-
pany more successful.
THE CUSTOMER DECIDES

The customer ultimately decides whether your company will
be successful.
Have you dealt with a customer complaint in the last seven
days? If you did, you probably didnt enjoy the experience,
although you may have gotten some satisfaction if you resolved
the complaint and made the customer happy. Customer opin-
ion of our products and services is the most valuable driving
force for our businessit makes us focus on opportunities for
improvement.
H1320 Merrill.indd 6 3/13/09 4:57:56 PM

Do you know why your customers switch to other suppli-

ers? The big picture is surprising:
50 percent leave due to poor service
20 percent leave due to lack of personal contact
15 percent leave due to inferior product
15 percent leave because the product is too expensive
These data were provided to me as a result of market research
conducted by one of my past clients, Cadet Uniform Services.
Your own company may be different, but these data give us
some food for thought. Most companies dont realize they
are a blend of both manufacturing and service. We think of
McDonalds as a service organization, and yet we all know it
has a kitchen where the food we eat is prepared. We may be
manufacturing chemicals, but the bigger issue we probably
face with our customers is much more likely to be the quality
of our service than the quality of our product. We may be in
financial services, consulting, or design, but our processes still
make or manufacture a product. Our product is intangible
and is in the form of data, information, or knowledge. If we are
going to be competitive in the marketplace, we have to offer
both top-quality product and top-quality service, as the two are
inextricably linked.
Successful companies talk to their customers all the time.
Cadet Uniform Services, which has a 99.4 percent customer
retention rate, employs 300 people in its operation and con-
ducts 3500 customer interviews every year. You have to talk to
the customer.
The more senior we get in the organization, the more reluc-
tant we become. Once while I was working as a sales man-
ager, my secretary received what I knew would be a serious
customer complaint call. I asked my assistant Chris Armstead
to take the call. Chris and I were good friends, and he made a
H1320 Merrill.indd 7 3/13/09 4:57:56 PM

telling remark back to me: Send in the infantry to clear the

way for the cavalry! Too many leaders are not prepared to hear
it straight from the customer, and too many customers are not
prepared to tell it straight to the business leaders. The customer
doesnt want to jeopardize people inside your organization.
Heres who customers complain to:
5 percent complain to the top
45 percent complain to the representative
50 percent complain to our potential customers
I have been testing these data for over a decade during my
workshops (see Chapter 14) Continuous Improvement in the
Workplace and ISO 9000 in the Workplace. I conduct a test
in the opening session with the participants, who are people
like you. After over a thousand respondents, these data stand
up incredibly well.
When I say our potential customer, that can be our cus-
tomers competitor, but it is more likely to be our customers
customer. How often has a sales assistant said to you, Yes,
this product is unreliable or I dont know when well get our
next delivery? Your performance is being communicated in
the marketplace every day, even as we speak.
So why dont we get involved in these customer com-
plaints? The tension, the abuse, and the wasted time away from
creative work are all good reasons. But quality is about deliver-
ing products and service that delight the customer, and being
better at it than the competition; it has to be led from the top of
the organization.
The reasons for customer problems vary from one organi-
zation to the next. During the 1970s and 1980s in large orga-
nizations such as IBM and General Motors, both the leaders
and the employees lost touch with the customer. Meanwhile,
many smaller organizations that prided themselves on customer
H1320 Merrill.indd 8 3/13/09 4:57:56 PM

responsiveness didnt realize the internal chaos and waste they

had created in being responsive to one customer while jeopar-
dizing the service they gave to another.
HOW SHOULD WE USE THIS KNOWLEDGE?

Even with good data on how to satisfy the customer, were still
not sure how to go about this. There is a strange paradox here.
People with technical backgrounds who are reputedly left brain
(or analytical) in their approach frequently react by using right-
brain, or creative, solutions. What I mean by this is that we
seek some innovative product improvement in the hope that it
will make the customer forgive and forget the appalling ser-
vice we have been giving them. I speak from firsthand experi-
ence. My business used to supply Marks & Spencer, Englands
well-known retailer. We continually flooded the company with
product innovations as we tried to hang on as their supplier.
They, in turn, were increasingly frustrated with our failure to
deliver complete, on-time orders and so were constantly trying
to develop alternative suppliers.
We should focus our strong analytical powers on our cus-
tomer data and direct those wonderful creative energies into
improving the service aspects of quality. There are some won-
derful examples of this blend of analytical and creative problem
solving that excite my imagination. Edward de Bono (1993),
in his book Sur Petition, talks of how a brainstorming session
with Ford Motor Company executives in England unearthed
the biggest hassle that Ford drivers experienced. It was not the
car they drove, but finding a parking space. He made the crazy
suggestion that Ford should buy a chain of parking lots that
would be available only to Ford owners. I can tell you that if
I drove in London, this would be a major incentive for me to
buy a Ford. In the United States, State Farm Insurance worked
with IBM to develop a chip that State Farm policyholders could
H1320 Merrill.indd 9 3/13/09 4:57:56 PM

install in their vehicle to notify the nearest State Farm office in

the event of an accident, providing information on the owner,
the vehicle, and the location of the accident. The State Farm
agent would arrive at the accident scene at the same time as
the police and could assist the motorist with any issues relat-
ing to the accident, such as finding a replacement vehicle.
We have seen a different solution to the same problem with
GMs OnStar program.
What are the issues that you should be tackling to delight
your customer? What are the aspects of your product or service
that really cause them grief?
This whole issue of developing an innovation process and
an innovation culture is dealt with much more completely in
my book Innovation Generation (2008).
We talk about the customer. Who is this strange person? Its
actually a many-headed monster, like the mythological Hydra.
You may have as many as twenty different interfaces, or moments
of truth, with your customer: the purchasing clerk, the buyer,
the president, the R&D staff, the accounts payable office, and the
receiving bay. Where Ive mentioned a department, there may be
several people who can each be a customer. Shipping the product
is only part of the story. You need to ship the related information
in an accurate, timely, and user-friendly manner as well.
Often customers do not get what they want because of unnec-
essary internal wasted time or wasted cost, or because custom-
ers requirements on price, reliability, or service are simply not
met. Unhappy customers mean a less successful business.
WHAT STOPS US FROM SUCCEEDING?

The arguments start when we try to agree on how we will
become more successful, and who and what will make us more
successful. During more than ten years of helping organizations
be successful in delivering quality to their customers, these ten
H1320 Merrill.indd 10 3/13/09 4:57:56 PM

main obstacles (or should we say opportunities) to delivery

have emerged from my working with these organizations:
1. Poor communication
2. Unclear and changing requirements
3. Lack of senior management commitment
4. Employee cynicism and poor morale
5. Lack of training
6. Bad suppliers
7. Not sticking to procedures
8. Quick fixes
9. Lack of time
10. Lack of process ownership
These are in no special order, and priority will differ between
companies. It is worth mentioning, though, that poor commu-
nication is usually at the top of the list. However, they all lead
to wasted time and wasted cost that get in the way of success.
Any form of internal waste means that youre asking the
customer to pay for something they dont want, and that you
are paying for something you dont want.
SO HOW MUCH DO WE WASTE?

Ive worked with nearly a hundred organizations in Europe and
North America, helping them calculate how much theyve wasted
by not doing it right the first time. In nearly every case, these com-
panies found over a million dollars of waste for every ten mil-
lion they spent doing business. I stress that they have found this
opportunity; I have only shown them how. These organizations
have also insisted that the figure they uncovered at the end of one
H1320 Merrill.indd 11 3/13/09 4:57:56 PM

day of assessment probably represents only one-third to one-half

of the total opportunity for improving their business. To put it
another way, your organization is probably wasting one-quarter to
one-third of its operating costs by not doing it right the first time.
So either your customer is paying too much for your goods and
services, or you are working long hours for a very poor reward.
Most businesses that started a quality improvement pro-
cess in the last decade did not take the trouble to calculate their
opportunity or didnt know how. You can do it very easily, if
you take the right approach. Remember, the reason you are
doing quality is to make you a more successful organiza-
tion by serving your customer in a better way. However, your
approach has to be very different from those brutal cost-cutting
blitzes endured in the 1970s and in the early 1990s.
Quality improvement is partly a business diet, but more a
change in lifestyle. You want to change that surplus fat into mus-
cle, just as an athlete would during preseason training. Athletes
know that training often causes them to gain weight as they build
muscle. Quality improvement should change your organizations
fat into customer-focused muscle, and turn you into an athletic
organization whose limbs are well coordinated and ready to
respond. Being athletic does not necessarily mean losing weight.
Those cost-reduction programs of the early 1970s and 1990s
often severed organizational limbs in crisis surgery, in an
attempt to lose weight. When this crippled organization, miss-
ing critical parts, tried to respond to the customer, its survival
only became more threatened.
HOW DO WE FIND THIS WASTE?

When you want to improve your fitness level, you need a diag-
nosis that tells you where your weaknesses are located. Your
body will speak for itself. Often we assume that the organiza-
tional leaders are the brain and that they know all that is happen-
ing internally. You need to involve everyone in this diagnosis.
H1320 Merrill.indd 12 3/13/09 4:57:56 PM

The best way to find out where your organizational waste

exists is to ask people. Youll be amazed at the frankness of many
answers and when people start to quantify those answers. Use a
first-cut cost of quality (described in Chapter 12) to identify
where your improvement opportunities exist, and be sure to have
someone who understands quality and cost of quality facilitate
it. Dont try to find this number in your financial records; youll
probably find only between 2 percent and 3 percent of your oper-
ating costs. This first cut is a one- or two-day task that will touch
each of your managers at some point and will unearth between
one-third and one-half of your total cost of waste.
It is vital that you calculate this number yourself, in order to
truly see the opportunities that lie ahead. However, you should
use someone who is a good facilitator and truly understands
cost of quality to facilitate the activity, or you wont realize all
your options and, more importantly, youll never get to the end
of the job.
The end result must be a number that is owned by the people
who calculated it, so they will have a great desire to get started
in quality improvement. One of the big surprises will be that
your greatest cost of waste is not in your operations area but in
the finance, sales, or planning function. I remember working
with a major international food company where we did a first
cut in the finance division alone. The operating costs in finance
were about $4 million, and we unearthed $500,000 wasted in
that division by not doing it right the first time.
Do you know what the biggest villain was? The annual bud-
get! The reason: unclear requirements. How many times a year
do you rebudget? Be honest. Is it two, three, four times? Are the
requirements clear, and do people observe them (again, be hon-
est)? Is the time needed to prepare the budget properly planned?
This assessment will give you issues to tackle at both the
business level and the department level. You may find issues
like labor turnover, absenteeism, or overdue accounts at the
business level, and budget preparation and invoicing errors at
H1320 Merrill.indd 13 3/13/09 4:57:56 PM

the department level. Either way, if you do the job properly,

you will give yourself a significant emotional experience that
will cause you to want to change the way you do business.
You may also choose at this point to assess your business at
a more strategic level, using the Baldrige criteria or through an
ISO 9000 audit. At a strategic level, the Baldrige Award assess-
ment process is probably the most rigorous assessment method
available. However, be warned that if you have no quality
improvement plan, the findings will cause a severe dent in your
company ego.
These assessments will answer the question, Why should
I be doing quality? They will also show you how these waste
items are inhibiting your success and getting in the way of your
delivering what you promised to your customer.
HOW DO WE ELIMINATE THIS WASTE?

I must warn you against rushing off to tackle what appear to be
the problems of your business by firing your guns in all direc-
tions. It took you a long time to get into this situation, and it will
take you some time to get out of it. More importantly, you need
to tackle the underlying causes that allowed these situations to
develop.
The first-cut cost of quality is described in more detail in
Chapter 12. It will get your people involved and ask them to
contribute their ideas. You should follow up with a detailed
assessment of where people in the organization see the need
for improvement. Now that their minds have been unlocked,
capture their thoughts.
You must be very clear at the outset why you are involved
in improving your organization. Assessment of your organiza-
tion for the cost, organizational, and customer benefits will tell
you at the outset where improvements are needed and how big
your opportunity is. This brings us back to the fundamental
H1320 Merrill.indd 14 3/13/09 4:57:56 PM

reason why any organization exists, and that is to successfully

deliver a product or service to the customer. Incidentally, Salis-
bury Cathedral is a service organization that has successfully
delivered pleasure, inspiration, and comfort to millions of peo-
ple for centuries.
You need a process that will turn your organization into the
place you want it to be. The change must be customer driven,
which means listening to and understanding what your customer
wants. The change must have a clear target, which means having
a clear vision of what you want your new organization to look
like. The bad news for some is that this change will never stop.
Both our processes and our people must continuously improve if
we are to be successful in an ever-changing world.
In Chapter 2 well look more closely at where to focus all
this activity. The customer has to be the focus of the success we
want our organization to achieve.
BROWSERS BRIEFING
You must define success in terms that pertain to more

than just profit.
The customer is the final arbiter on whether you deliver
quality service and quality products.
The customer is the final arbiter on whether you will
succeed.
Quality and success are synonymous.
Dont rename your quality process to be fashionable.
Do focus on specific aspects of your quality process
when the foundations are in place.
Customers will not tell you where you are failing
unless you ask persistently.
H1320 Merrill.indd 15 3/13/09 4:57:56 PM

The customer is a many-headed monster, like the

mythological character Hydra.
There is a paradox whereby left-brain people use right-
brain methods (and vice versa) to solve customer prob-
lems. This is a weakness of the quick fix.
There are many obstacles to your success. Communica-
tion, commitment, and cynicism are only a few.
A cost of quality assessment will identify the weak-
nesses inside your business and make you approach
improvement in a planned manner.
A cost of quality assessment will energize your people
and commit your leadership.
You must build a strategic quality improvement plan
that is analogous to your business plan, and the cus-
tomer must be the driving force.
You must develop a clear picture (or vision) of where
you are heading, and share this with everyone in the
organization.
REFERENCES
de Bono, Edward W. 1993. Sur Petition (Going Beyond Competi-
tion): Creating Value Monopolies When Everyone Else Is Merely
Competing. New York: Harper Business.
Merrill, P. 2008. Innovation Generation. Milwaukee, WI: ASQ Qual-
ity Press.
H1320 Merrill.indd 16 3/13/09 4:57:56 PM

2
The Customer
Your most unhappy customers are your greatest source of

learning.
Bill Gates
T
he Maistrali restaurant is in the town of Rethymnon on
the north coast of the Greek island of Crete. The owner
is Vasilis Pantalos; he knows who the customer is, and
he knows that his customers drive the business. Vasilis stands
at the front of his restaurant and is the first person to meet his
customers when they walk in.
My daughters, Rachel and Sarah, and I were taking a vaca-
tion in Crete, and we had the good fortune to walk into the
Maistrali. Vasilis told us about his restaurant and about the food
that he served. He told us about the musicians who played. He
wasnt pushy or aggressive, but he clearly believed in his res-
taurant and knew how it operated. Vasilis also knew his cus-
tomers and knew that they were tired of the other restaurants in
town where hired hawkers (the locals call them hooks) stood
outside trying to fast-talk unsuspecting tourists into establish-
ments with less than average food delivered with less than aver-
age service.
We had a wonderful time at the Maistrali because Vasilis had
also created an environment of relaxed enjoyment. Amazingly, it
17
H1320 Merrill.indd 17 3/13/09 4:57:56 PM

was the only restaurant in town that played the wonderful Sirtaki
music that is everyones lasting memory of Greece. The other
thing that was significant as we walked into the restaurant was
that the local people were eating there. An unexpected bonus at
the end of the evening was the dancing, and my daughters were
delighted to join in.
Vasilis was the leader of that organization. He was in con-
tact with his customer, and he ensured that the inside of his
organization delivered what the customer wanted. Needless to
say, we revisited the Maistrali and recommend it to other visi-
tors to Crete.
LEADERS MUST TALK TO THE CUSTOMER

Most organizations start with the leader talking to the cus-
tomer, but with time, many leaders hand over the customer
contact to the fast-talking hooks, who try to manipulate the
unsuspecting customer. Once the contract is signed, the hooks
lose all further interest in the client until the time comes for
a repeat order and the salesman starts to make promises.
Then the organization makes promises to the salesman, and
everyone gets angry because the customer didnt get what was
promised last time.
The transition from customer contact by the business leader
to customer contact by other persons in the organization was a
critical point in the history of your organization. It often hap-
pens imperceptibly, because the moment you have more than
one interface with the customer, you have transactions in which
the business leader was not a participant.
Its not just the salesperson who takes customer contact
away from the leader; its also the accounts receivable clerk,
the dispatch manager, the research and development staff, the
delivery driver, and so forth.
H1320 Merrill.indd 18 3/13/09 4:57:56 PM

Chapter Two: The Customer 19
WHO IS THE CUSTOMER?

WHAT DOES THE CUSTOMER WANT?
I recall conducting a strategic planning session with LePage
Adhesives, a household brand, and helping it identify nearly
20 different points of contact with the customer. Each of these
moments of truth affects your organizations reputation with
the customer.
IBM went through great trauma as its business shrank in
1992. To its credit, tremendous effort went into asking the cus-
tomer to identify the major barriers to conducting business with
IBM. One of the most widespread problems was the invoice
system. Little things, like Big Blue using blue ink on its
forms, which would not reproduce on the clients photocopier.
As IBM staff dug deeper into the problem and implemented
customer-friendly solutions, they witnessed a dramatic drop in
credit notes and an increase in customer satisfaction.
American Express was very proud of the speed with which
it issued a card to a new customer, but wondered why its busi-
ness shrank in favor of Visa. In the 1990s, American Express
customers continued to be angry with statements that were
a maze of irrelevant code and did not carry dates against the
transactions. I canceled my membership after the frustrating
failure of its internal communications and repeated unfriendly
contacts with the customer service staff. Since then it has dis-
covered what its customers want and has updated the statement
format. Smart sales tricks will not hold your customers if you
repeatedly ignore their requirements.
You may believe you are talking to the customer when you
speak to the corporate representative who buys the corporate
requirements for an organization. But the customer is also those
hundreds of other users who need the opportunity to talk to you.
(Incidentally, this means actually talk, not fill out a form.)
H1320 Merrill.indd 19 3/13/09 4:57:56 PM

American Express can take some consolation in the fact

that among financial institutions it does better than most of
the British banking industry when it comes to listening to the
customer. The arrogance of British banks is legendary, and
their fees are exorbitant. In this light, I was delighted to see
Martin Taylor, my former chairman at Courtaulds, appointed
chief executive of Barclays. He is a leader who understands
the importance of listening to the customer and delivering cus-
tomer value. I switched my UK business to Barclays after deal-
ing with another bank, which switched off its fax machine at
5:00 p.m. UK time. Clearly, it did not wish to be part of the
global marketplace! In all industries the global marketplace
makes it possible for the customer to go elsewhere.
CUSTOMERS MUST TELL THEIR SUPPLIERS . . .

When you, as a customer, receive poor service in a restaurant,
at a bank, or on a customer service line, the organization you
are dealing with is showing disrespect for your business. It is
treating you as if you are in the way of its day going smoothly.
If the organization doesnt want your business, do it and yourself
a favor and take your business elsewhere. It is your responsibil-
ity as a customer to insist on proper service. If you do not take
action, you let the problem get worse, which does no one any
good. Yes, I get angry when I get treated poorly as a customer.
You should too.
As your business grows, it is critical that you keep in touch
with the people who speak to your customers, and it is critical
that you hear both the good and bad customer feedback. You
should hear what the salespeople are saying, but you must con-
tinue to listen to the customer directly. Whether you have small
or large clients, you must hear the messages that come from the
clients receiving dock and the accounts payable office, as well
as all the other moments of truth.
H1320 Merrill.indd 20 3/13/09 4:57:56 PM

You can see that your customers expectations, or their

requirements, involve every aspect of your business. What is
done by each member of your organization affects the custom-
ers opinion of your organization, and it affects whether they
wish to continue giving you their business.
If an organization has dissatisfied customers, less than
5 percent of these customers will complain. Instead, the unhappy
customers usually go away, and more than 50 percent of them
will tell someone else about their bad experience. Customers
are expecting better products and services every day, and they
now demand assurance that your organization can meet their
requirements. You must hear the messages that come from the
people who fly on your airline, rent your automobiles, or wear
the uniform that you supply.
MEASURING CUSTOMER SATISFACTION

When you measure the customers perception of whether you
have met their requirements, you are actually interested in the
customers dissatisfaction. Surprisingly, customers are reluc-
tant to tell you about their dissatisfaction. Many organizations
believe the only way to do this measurement is through sur-
veys. Those who do surveys will tell you their response is usu-
ally less than 20 percent and rarely does it exceed 30 percent.
Feel good surveys miss the point, unless, of course, you
want to feel good. A survey that tells you that customer satis-
faction has moved from 98.1 percent last year to 98.9 percent
this year is a waste of time.
A report that tells you that your turnaround time on respond-
ing to requests is poor, when compared to the competition, has
real value. Then you can act on a specific weakness that you
have detected. A small percentage of customers will complain
about that, but you need to know about it.
H1320 Merrill.indd 21 3/13/09 4:57:56 PM

When its industry was restructured, Ontario Power Genera-

tion (OPG) got a new customer. Instead of millions of customers,
it now had just one, the Independent Market Operator (IMO).
The IMO could buy power from any utility in North America.
Instead of being a monopoly, OPG now had lots of competition.
Knowing what was inside the head of the IMO became
vital. OPG met quarterly and asked specific, not generic, ques-
tions. Be sure to ask questions that focus on where the customer
wastes time or has trouble getting things done. Ask the ques-
tions you are afraid to ask. This is how you find the customers
problem and your opportunity.
A UNIFORM EXCEPTION, A SHINING EXAMPLE

Prior to reading about Cadet Uniform Services in this book,
you probably hadnt heard of this company. As a finalist in the
Canadian Awards for Business Excellence, it rubbed shoulders
with major international corporations such as Allied Signal. This
small Canadian company has an enviable customer retention rate
of 99.4 percent in an industry that rarely reaches 80 percent.
Cadets secret is not remarkable. It talks to the customer
and listens to the replies. It constantly measures customer ser-
vice. It recognizes that the most frequent customer interface is
not through the salesperson who gets the order, but through the
delivery driver who delivers the customer service every day of
the week. Cadets competitors employ drivers; Cadet employs
customer service representatives (CSRs). The CSR constantly
extracts information on customer needs and is rewarded accord-
ingly. The CSR also delivers what the customer needs. During
the great blizzard of January 1993, which brought Toronto to
a standstill, every one of these remarkable people delivered to
their customers because they believed in the customers and in
Cadets commitment to the customers. Arnold Gedmintas, who
runs the operation at Cadet, listens avidly to the messages that
H1320 Merrill.indd 22 3/13/09 4:57:56 PM

come from the customer. This is priceless information Cadet

uses to generate even greater customer satisfaction.
Windsor, Ontario, is known as the Canadian Rose City
because of the friendly climate. The business climate, however,
is not so cordial. Windsor sits across the river from Detroit,
Michigan, the Motor City. As the North American Free Trade
Agreement (NAFTA) approached, suppliers to the motor indus-
try saw an increasing threat. Valiant Machine and Tool makes
high-tech robotics and machine tools for the motor industry. It
grew dramatically in the face of NAFTA and during the recession
of the early 1990s. Valiant was named Company of the Year in
Windsor. The leader of this dramatic growth was Michael Solcz
Sr., who is a gentleman in every sense of the word. Michael talks
constantly to his customers and listens to what the customers
say. He also listens to what his salespeople say, and he uses this
knowledge to drive the strategic plan of the organization.
All of this knowledge that you gain from the customer
should feed into your strategic quality plan and drive both
your process improvement and your people improvement.
Blanton Godfrey, formerly of the Juran Institute and now with
North Carolina State University, speaking at the Toronto ASQ
Forum in 1995, revealed that research had shown that less than
20 percent of organizations use their shortcomings in customer
product or service to drive improvement. Most hope and wish
that problems will go away on their own.
Identify all of your customer interfaces (moments of truth)
and ask yourself when you last asked the people in your orga-
nization what difficulties they experience in meeting their
customer requirements. Ask yourself what opportunity these
people have to input their difficulties to the strategic quality
plan. Ask yourself whether that input gets dismissed, devalued,
or destroyed before it arrives at the plan.
Finally, a word of warning. Small organizations are espe-
cially vulnerable to waste and chaos caused by leaders who
H1320 Merrill.indd 23 3/13/09 4:57:56 PM

pride themselves on being customer responsive. I have seen

many companies that have successfully grown to employing,
say, 4050 people and are driven by the great entrepreneurial
spirit of their leader. At this point, however, the leader starts
to lose contact with what is happening in the guts of the busi-
ness and retains the image of when it had 10 or 15 people.
Sudden changes in requirements by the external customer or
client are no longer handled in the same way. Failure to get
client requirements agreed on up front has a destructive effect
on internal morale, and it is a major cause of the onset of waste
and rework. This issue will be revisited in the chapters on pro-
cess ownership and cost of quality.
I hope that while I was discussing the companies Cadet
Uniform Services and Valiant you were forming a picture in
your mind of what you would like your new company to look
like. Remember again C. S. Wallace Jr., who talked about the
benchmarking his company had done and said, You can call
it benchmarking; I call it kinda copyin. Looking at the good
practices of other companies is one of the first steps in creating
the vision of the company you want to be.
BROWSERS BRIEFING
All business leaders must know who their customer(s)

are and talk to them continually.
Leaders include the president, the operations manager,
the financial controllerand anyone who may be
frightened of the customer.
When customer contact is delegated, communications
with the delegatee must be treated like a fragile fiber
optic.
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We must also talk to our customers customer to elimi-

nate the risk of distorted communication.
Our suppliers are as important as our customers.
If your customers have bad experiences, more than
50 percent will tell another of your potential customers,
and less than 5 percent will tell you.
Despite its rare value, only 20 percent of companies
use customer feedback information to drive business
improvement.
All of your customer interfaces must be identified, and
the delivery performance (product and service) must be
measured.
Customers will not and should not fill out a form for your
convenience. You need to actually listen to them.
Large organizations suffer from the leadership being
distanced from the customer.
Smaller organizations suffer from the leadership think-
ing that customer responsiveness means throwing their
organizations into chaos, when in fact the customer loses
from this behavior in the long term.
Look for companies that deal with their customers
well (perhaps your own suppliers?); copy their best
practices.
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H1320 Merrill.indd 26 3/13/09 4:57:56 PM
PART II
The Foundation
H1320 Merrill.indd 27 3/13/09 4:57:56 PM

H1320 Merrill.indd 28 3/13/09 4:57:56 PM
3
The Vision
Begin with the end in mind.
Stephen Covey
S
o, you are embarking on a journey to become a better
organization. Do you know where you are heading? Do
you have a vision, a picture of the future?
In 1979, my family and I bought a 100-year-old cottage in
the old English village of Prestbury. The roof leaked, the win-
dows were rotten, the kitchen had an old crock sink, and the bath
was so old, it actually had some antique value. We bought the
house because the village was one of the prettiest in England,
and the house was of the beautiful Cheshire half-timbered style.
It was appropriately named Hope Cottage.
Over the next three to four years, we labored, retiling the
roof, installing the new windows that replicated the originals,
and refitting the kitchen and bathroom with units that were in
keeping with a late Victorian country house.
The ideas for restoration came from countless sources. Cop-
ies of House and Garden, Casa Vogue, and Interiors gave the
ethereal mood of the future residence. Copies of home improve-
ment magazines gave the practical how-to information. Visits to
29
H1320 Merrill.indd 29 3/13/09 4:57:56 PM

30 Part Two: The Foundation
houses of friends doing similar restorations gave hope when ours

faded. Television programs, visits to furniture stores, decorations
in old country pubs: all of these sources helped build the picture
of our dream home.
This picture of the house as it would be in the future was
our vision. This is what maintained the pull forward when
times got tough.
SHARING THE VISION

I wish I could go on to say that my family and I all shared the
same vision of Hope Cottage. But I had my own clear picture
of the Hope Cottage of the future, my wife had hers, and my
daughters had yet another. Rachel and Sarah knew the colors
and pictures they wanted in their bedrooms, along with the
swing and seesaw they wanted in the garden. My wife had her
wish list for the kitchen and the living room. My priority was
a new roof, the garage, and the living room extension at the
back of the house.
Hindsight is 20/20, and one of the lessons I learned in
later years is the importance of sharing and agreeing on the
vision the organization is working toward. Taking time to
share our pictures of the future would have spared us much
of the stress and tension in the first three to four years of res-
toration. If each member of the family had seen their picture
fit into the plan, each of us would have been able to contrib-
ute to the restoration process with much more energy and
enthusiasm.
Instead, I worked enormous hours, called on old favors
from friends, and relied on the fact that my family would trust
me because of my commitment to the work at hand. When-
ever a leader says Trust me, it is a sure sign of failed com-
munication. You dont ask for trust; it is only given for free.
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Chapter Three: The Vision 31
RENOVATING YOUR ORGANIZATION

If all this sounds a little bit familiar, then you have recognized
that you are about to engage in a building or restoration process
in your own organization, and that having a clear and shared
vision of the future is critical for everyone in the organization.
Any process that involves change will test peoples trust
in you. You are asking them to enter the unknown. The more
you can remove the mystery and build a positive image of the
future, the more secure they will feel with the journey you are
undertaking.
However, youre not dealing with a family of four. There
will be many more perspectives of that picture of the future.
THE RETREAT APPROACH TO VISIONING

A lot of management teams believe a weekend in the lake
country among the birds and the trees, reflecting on beautiful
thoughts, is what visioning is all about. This frees the minds of
task-oriented business leaders who need to take some time to
stand back and look at their own organizations.
A retreat is a good way to initiate the visioning process.
I once conducted a visioning session in the beautiful lake
country of the Muskokas in southern Ontario. A retreat is a
loose-tight kind of activity. Its loose in the sense that you
remove the shackles of daily business and that the right envi-
ronment releases the mind and fosters team bonding. However,
there must be structure and direction to maintain the left-brain
influence.
The organization I was working with on this occasion was
a government aviation department facing privatization. We
started the two days with a lot of fear, and finished with a lot of
excitement as future opportunities were recognized.
H1320 Merrill.indd 31 3/13/09 4:57:56 PM

VISIONING IN STAGES
The first stages in visioning are to get a clear sense of where
you are now. What are your key processes, who are your cus-
tomers, and what do you deliver to them? You then move on to
look at whats important to your own organization and whats
important to your customers. What are your own values, and
what are your customers requirements? This gets you thinking
about the way you do things now and the way you will do them
in the new organization.
This government department saw the main differences as
speed, the type of people it had, being more competitive, and
having less bureaucracy. The department was then in a position
to start building its vision of a more aggressive and competitive
organization, which was more forward thinking, cost effective,
and customer focused. I remember Bob Middleton, one of the
team members, sitting back at the end of the session and say-
ing, This is going to be a pretty impressive organization to
work for!
Visioning is a continuous activity, and it needs to be led by
the senior people. In many organizations, leaders neither com-
municate their vision to the rest of the people in the organiza-
tion nor do they listen to their hopes and aspirations. In Chapter
8 you will find a discussion about depth and span of communi-
cation. Your own visioning will not penetrate more than three
layers of your organization, and you must work constantly and
listen to what people want the organization to be. You must
communicate your own inspiration of the future to the people
around you.
We will keep coming back to the importance of good com-
munication, and well talk in detail about the concepts of com-
munication in Chapter 15. For the moment, though, lets look
at some of the practical things we should do to communicate a
vision of the future.
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DEVELOPING THE VISION

If youre not satisfied with where you are now, you should
decide where you would like to be. If you ask everyone in your
organization what they would like the organization to become,
the responses may be positive, more detailed versions of the
descriptions in Chapter 1:
Survival becomes A healthier organization
The customer becomes Less complaints
Increased becomes More business
market share
More profit becomes Increased salary and
benefits
These initial responses are the gut reactions of people vent-
ing pent-up frustration. This is bound to happen the first time
people are asked, What would you like your organization to
look/feel/be like? Too many businesses do this through an
impersonal survey published by the human resources depart-
ment and are disappointed with the responses.
One of the best times to assess peoples thoughts and feel-
ings is during your quality education. This is also the time to
show people some role models of organizations you would like
to emulate.
Why should the senior managers be the only ones to visit
companies that have succeeded in quality? Over a 12-month
period, you should have everyone visit at least one organiza-
tion that is succeeding in quality. These companies are not hard
to find, and one of the remarkable things about people who
succeed in quality is that they want to tell the world about it.
The American Society for Quality (ASQ) is a good source of
information here, and your own industry links with customers,
suppliers, and competitors will be another source. Share your
H1320 Merrill.indd 33 3/13/09 4:57:56 PM

own good practices with these companies, and you will gradu-
ally build a network of companies with which you can bench-
mark. Choose your companies for specific reasons, and have
teams from your own company go with a plan and return to a
thorough debriefingjust as I visited friends and old houses
while rebuilding Hope Cottage.
COMMUNICATING THE VISION

In order to communicate the vision, it needs to be broken into
bite-size chunks that people can understand. These chunks
represent the goals on the journey to achieve the vision. (See
Chapter 13 for goal setting.) People need to know what will be
their contribution to achieving the vision. They need to agree
on personal goals, and they need to see how they will contrib-
ute to achieving the current years business plan.
This dialogue must be continuous throughout the year, and
people must be given the opportunity to discuss the obstacles
they encounter on the road to achieving their goals. I will talk
about this more in Chapter 14, Education.
SUCCESS BREEDS SUCCESS

Reading a book can be an important part of the visioning pro-
cess. You need to read the equivalent of Home and Garden
or Casa Vogue, as I did in Hope Cottage. Give people books
to read. People like quick reads, so stay away from weighty
tomes. Different people like different styles of writing, and
some people dont like reading at all. I recall in the 1980s,
some company presidents were so inspired by Philip Crosbys
Quality Is Free (1979) that they bought copies for everyone
in their organizations. They wondered why nothing changed,
even though Crosbys style appeals to many.
H1320 Merrill.indd 34 3/13/09 4:57:56 PM

CDs and podcasts are some of your most powerful com-

munication media. Theyre a wonderful way of building your
vision of a quality organization. Use videos too. Show people
videos of successful quality organizations at least once a month.
Discuss what they see and like, and what they dont like.
These activities help people learn what a successful organiza-
tion looks like, and they begin to build goals in their minds for both
themselves and the organization. In The Fifth Discipline, Peter
Senge quotes Arie de Geus, head of planning for Royal Dutch/
Shell, who said, The ability to learn faster than your competitors
may be the only sustainable advantage (Senge 1990, 4).
If you play golf, tennis, or any other sport, you know that one
of the best ways to improve is to mix with better players. Choose
your business playing partners carefully, and have everyone in
your organization do some imagineering, in which they visual-
ize what their own job, their own department, and their own orga-
nization will look like when you become a quality organization.
Do the executive retreats as well, but remember to move
beyond that and involve everyone. This way, you are building
the picture for everyone, and visualizing the culture you want
in your organization.
As you build this picture you start to realize what is impor-
tant and what you value. I will talk about quality values in the
next chapter.
BROWSERS BRIEFING
As with our personal lives, our organization must have

a clear sense of direction, or we will be the victim of
fate rather than the beneficiary of good fortune.
Build your picture of your future organization by look-
ing at other successes.
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Build on other peoples successes by imagineering.

Build and share the vision with everybody in the orga-
nization. Be prepared to spend time doing this.
The words trust me indicate you have failed to com-
municate in the visioning process.
Most leaders can communicate successfully to a range
of six to eight people, and to a depth of three layers in
their organizations.
Collect everyones thoughts and feelings on what they
want their organization to look like, to feel like, and
to be like. The best time to do this is during the initial
quality education.
Have everyone visit their corresponding department/
function in another successful organization at least
once a year.
Read books, listen to CDs and podcasts, and watch
videos. Meet people who are successful.
The ability to learn faster than your competitors may be
the only sustainable advantage.Arie de Geus.
Evaluate your capacity to change and strengthen your
weaknesses.
REFERENCES
Senge, Peter M. 1990. The Fifth Discipline: Mastering the Five Prac-
tices of the Learning Organization. New York: Doubleday.
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4
Quality Values
If we are to go forward, we must go back and rediscover those

precious values.
Martin Luther King Jr.
D
ifferent values are neither right nor wrong, but they are
different. The problem arises when one person says they
are right and the other disagrees. If people are going to
work in harmony, common values must be agreed upon.
If you are embarking on a quality journey, you must agree
upon some basic quality values. Dont make the list too long,
and dont make value statements too complicated. This is not
a philosophical ego trip for the thinkers on the management
team. These are basic principles that you will ask everyone in
your company to buy into.
If you dont take the time to agree on these basic beliefs and
values, I can promise you endless internal conflict. You only
have to look at why nations go to war to see that differences in
values are the root cause of much of humanitys disagreement.
If you have evaluated where you are now and have built
a vision of where you would like to be, you are probably left
with a large gap between those two points. Your cost of qual-
ity assessment may find that the annual budgeting process is a
37
H1320 Merrill.indd 37 3/13/09 4:57:57 PM

major time waster, an ISO 9000 audit may show the need for a
corrective action system, and your employee survey may have
revealed a weak communications system. This is the gap that
you need to traverse on your quality journey.
At this point many people jump into what is called gap
analysis. But before getting too deeply into gap analysis, it is
important to stop and ask the very basic questions:
What are our basic beliefs?
What are our quality values?
Some would argue that this should be done sooner, but I believe
that first engaging in the self-assessment and visioning activi-
ties will flush out your beliefs and values, allowing a consen-
sus to be reached much more easily at this stage. Consensus
on your values is vital if the ensuing quality process is to be a
success. Phil Crosby did an excellent job in this regard with his
Four Absolutes of Quality. Company leaders who started their
quality journeys back in the 1980s and used his Four Abso-
lutes gave everyone in their organizations some basic values to
believe in. Thomas Watson Sr., in the early days of IBM, gave
the organization its Basic Beliefs of respect for the individual,
best possible service to the customer, and performing every
task in a superior manner.
VALUES: THE FOUNDATION OF A CULTURE

Values and beliefs are the foundation of what we call our cul-
ture. In the same way that a nation has a culture, so does a com-
pany. I talk about culture in the next chapter. Culture is the way
we do things around here. This is often hard to understand in
a small company that has grown from a single entrepreneur-
ial idea. In the early days when survival was the number one
issue, all you did was go out there and get the business. Often,
medium and larger companies do not stop to think about the
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Chapter Four: Quality Values 39
basic values that are the foundation of their culture, especially

if their growth has been rapid and successful.
Take a moment to think of some of the value differences
between nations. The values are rarely written down, but they
fundamentally influence the thinking of the people.
People like Philip Crosby, Thomas Watson Sr., Joseph Juran,
and W. Edwards Deming give us some good thinking here. As a
starting point, lets look at a basic definition of quality.
WHO DEFINES QUALITY: A BASIC VALUE

Weve already talked about quality being defined by the cus-
tomer, and yet many people do not have this basic value.
Instead, they believe quality has to be defined by the supplier of
the product or service. Crosby defines quality as conformance
to requirements. Juran talks about fitness for purpose. There
are many other definitions, but they all boil down to delivering
what the customer wants. The definition I happen to prefer is
conformance to agreed upon customer requirements. I see
this as keeping my promise. This is where culture and ethics
overlap.
People in your organization have different definitions of
quality, and some will hold a deep-seated belief that quality is
synonymous with high expense. When I give seminars, I show
the participants an expensive gold-plated pen that my daughter
bought for me that cost more than $100. I treasure this pen, and
few would disagree that it is a quality pen. I then show them a
felt-tip marker that I use on the flip chart and that costs about
one dollar. For writing on a flip chart, the felt-tip pen is the
quality penwords written on the flip chart with the pen from
my daughter would be barely visible. It would not conform to
my customers requirements. I find these days that few people
who have been exposed to quality have a problem with this
definition, but if you are going to adopt this basic value into
H1320 Merrill.indd 39 3/13/09 4:57:57 PM

your new company culture, you will have to educate all your
people to the definition of quality as conformance to customer
requirements.
RESPECT FOR THE INDIVIDUAL

When Thomas Watson Sr. included respect for the individual
among the Basic Beliefs of IBM, he acknowledged that many
businesses are driven by fear, applied through abuse of the
individual. People give their best when they are enthusiastic,
and they add greater value when they use their minds as well
as their bodies. Whatever the mood inside your organization,
you will not be able to hide it from your customer. You need to
ask yourself if your vision of the organization includes happy
people or people driven by fear.
If you have a group of people who are positive, respect-
ful of each other, and striving to meet the customers require-
ments, the basic value of continuous improvement will come
much more easily. The tough part of continuous improvement
is that when youve worked hard to build prevention through
procedures, you are reluctant to change anything. The leader-
ship in the organization can demonstrate its true commitment
to quality by daily involvement in the improvement of the most
needful business processes. Probably the best remembered of
Demings 14 Points is Drive out fear.
THE VALUE OF EDUCATION

We are now starting to take on an obligation to find the cus-
tomers requirements and to agree with our customer on our
ability to meet those requirements. We are also starting to see
another value emerging: the need to continuously train and
educate people in an organization. In Chapter 3, I quoted Arie
de Geus of Royal Dutch/Shell, who suggested that the only
H1320 Merrill.indd 40 3/13/09 4:57:57 PM

sustainable competitive edge an organization has is its ability

to learn more rapidly than the competition. I will discuss this
more in Chapter 14.
SUSTAINABILITY AND VALUING PEOPLE

Peter Senge, in his book The Fifth Discipline (1990), comments
on how very few organizations live to be forty years old. This is
similar to the lifespan of people in the middle ages or the highly
impoverished parts of the planetnot a sign of good health.
A quality culture values the future and all stakeholders,
not just the financial investors. People working for a company
invest not only their money but also their lives. Customers and
suppliers risk their futures by doing business with the com-
pany. A financial stakeholder can move their money tomorrow,
and frequently is only interested in the next one to three years.
We want financial stakeholders who are interested in the next
ten years.
Investment in people is a longer-term view, and the correla-
tion between this investment and sustainability is high. That
is why we see the Investors in People standard in the UK, the
development of ISO 26000, the standard on social responsi-
bility, and the important Human Factors in National Excel-
lence Awards, such as Balridge and the European Federation
of Quality Management (EFQM). My own work led me to the
privilege of being convener of the working group developing
ISO 10018, Guidelines on Participation and Competence of
People in Quality Management Systems.
THE VALUE OF PREVENTION

Now a much deeper valueperhaps the most all-encompassing
value in qualitystarts to emerge. Developing a mind-set of
prevention throughout the organization will probably do more to
H1320 Merrill.indd 41 3/13/09 4:57:57 PM

enable you to meet your customers requirements than any other

change you make in your culture. Philip Crosby talks about pre-
vention as the system to deliver quality. The 1994 revision of the
ISO 9000 standards shifted key words away from appraisal and
toward prevention. If you follow the Baldrige criteria, you must
move away from a reactive response to the customer and toward
a prevention-oriented culture. Environmental management and
occupational health and safety have been built on this basic
value for many years, yet so many businesses struggle with this
concept in their quality management system.
This is probably the most emotional shift the entrepreneur-
ial business leader has to deal with. If this describes you, then
you have probably built a highly successful organization due
to your ability to respond to the customer. So far, so good; but
the word respond is no longer good enough. You are probably
one of the fastest tap dancers in the business, and you have
recruited a team who can follow your steps and even predict
your next move. Guessing will not work any more. Intuition
is a key part of your past, present, and future success, but intu-
ition is not magic; it is a highly developed skill that we will talk
about in Chapter 15, Communication.
Prevention is what your customers have asked for in the
past and will demand in the future. It means having business
processes that are capable of doing it right the first time, and
having people who no longer have an attitude of we can put
it right later. Prevention means thinking aheadno longer
responding to the customer but rather being proactive and
delighting the customer. Prevention means that you have to
work with your team, and each player has to know their part in
delivering to the customer.
The biggest enemy of prevention is time. I have a bookmark
from a little gift shop in Vermont that says, Never enough time
to do it right; always enough time to do it over? Grandma used
to say it, and it still holds true today.
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HOW DO WE MAKE
PREVENTION HAPPEN?
Taking time up front to agree on requirements with our cus-
tomer is one of the first preventive behaviors. Well see later
that establishing clear process ownership in your organization
is a prerequisite for prevention. Taking time to talk to your sup-
pliers and ensure they understand your requirements is the next
step in building prevention. Well explore this further in Chap-
ter 10, Process Ownership. This is where the Japanese have
been so effective over the last several decades. Get into the nig-
gling details here and you save much heartache later. The prob-
lem is that customers often do not know their requirements, and
as they learn more about your capabilities, they ask for things
they did not think about at the outset.
The company sales staff has a critical role here, and yet I
see so many organizations where the sales force is not included
in the quality process and the salespeople do not understand the
huge cost to the organization (and hence the customer) when
they overlook a requirement.
THE EQUIPMENT MYTH

Applying prevention to our business processes is where the big
strides are made. Many people say that if they had better equip-
ment that did it right the first time, there would be far fewer
problems; yet the general experience is that equipment is the
most blamed and the least guilty.
Roger Milliken, whose company was a past recipient of the
Baldrige Award, started his quality journey in 1980. The Japa-
nese were destroying him in the marketplace, and yet he had
state-of-the-art machinery. He visited Japan and discovered
top companies using equipment as much as 20 years old. The
secret? Training and following procedures. Well talk about
H1320 Merrill.indd 43 3/13/09 4:57:57 PM

training in Chapter 14 and discuss procedures in Chapter 21.

Moving beyond prevention takes us to the next value: continu-
ous improvement.
CONTINUOUS IMPROVEMENT
Masaaki Imai, the author of Kaizen (1986), has a saying:
Everyone has two jobs. The first is doing their job, and the
second is improving the way they do their job. Everyone in the
organization has to be looking for a better way, but tradition-
ally, this has often been done in isolation by a few individuals.
A quality organization has people working together, and not
making unilateral changes that will affect others in a negative
fashion. The goal is for people to accept a change generated
elsewhere, because they recognize it to be to the greater benefit
of everyone. The desire to continuously improve is a funda-
mental value in all quality organizations.
A POLICY OR VALUE STATEMENT

Having drawn up your value statement, it is important to pre-
sent it in a statement of commitment. This is usually called a
quality policy.
Make these values simple and easy to understand. Dont
wrap them up in fancy words or conceptual jargon. Wrap them
together in your policy statement on quality. Your policy state-
ment should be short and to the point, and with no compro-
mises. The Ten Commandments received by Moses can be
stated in fewer than 100 English words.
Ive seen quality statements running to between 300 and
500 words and looking as though they were designed by a com-
mittee of lawyers. Who in the organization is even interested in
a statement like that? No wonder people in the company do not
understand where their company is going.
H1320 Merrill.indd 44 3/13/09 4:57:57 PM

As we look deeper into what happens in successful quality

organizations, we see that mutual trust and respect, customer
focus, and a desire to do things better are the kinds of things that
drive peoples behavior. These behaviors are based on quality
values, and this leads us to define, in the next chapter, the quality
culture that is based on your values.
A quality culture allows different behaviorsbehaviors that
are loose and open when problem solving, and tight and closed
when implementing solutions. When the quality management
system is fully developed, an organization has to focus far more
on tomorrows customer and far more on innovation. I talk more
about this in my book Innovation Generation (2008).
BROWSERS BRIEFING
The values, or basic beliefs, of an organization define

the way people do things, or their behaviors.
Philip Crosby gave organizations his Four Absolutes;
Thomas Watson Sr. gave IBM its Basic Beliefs.
Lack of agreement on values leads to conflict and to
people in the organization pulling in different directions.
As businesses and organizations become global, it is
essential to be aware of the cultural variations among
nations, as they affect different parts of the global
organization.
An organization committed to quality has to be clear
that the customer is the final arbiter of quality.
Investment in people and development of their skills is
a value held by all long-term successful organizations.
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The ultimate value in quality is prevention. The appli-

cation of prevention to all business processes is the
only way the customer can be assured of receiving
what you have promised.
Prevention must, however, be a dynamic activity, and
continuous improvement must be applied to all busi-
ness activities.
Successful organizations are not satisfied with the sta-
tus quo and seek to continuously improve.
Before moving to the new culture, it is important to
assess where you are now.
REFERENCES
Imai, M. 1986. Kaizen. New York: McGraw-Hill.
Investors in People, http://www.investorsinpeople.co.uk.
ISO 10018 CD1. 2009. Geneva: International Organization for
Standardization.
ISO 26000 CD2. 2007. Geneva: International Organization for
Standardization.
ity Press.
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5
Culture
Culture is the way things get done around here.
Deal and Kennedy
I
like the definition of culture from Deal and Kennedy. It
is simple and points out that our culture is based on our
behaviors. Our behaviors are in turn based on our values,
which I explained in the previous chapter, and values are what
we believe to be important. I see many so-called quality cul-
tures, but unfortunately they are immature and focus only on
one or two elements of the package of quality values.
In the early stages of a quality culture, the focus on pro-
cess creates what Deal and Kennedy (1982) call the process
culture. People focus on their process and ensure consistency
in their output, but the flow of information between processes
is poor, often resulting in overdocumentation or bureaucracy.
This culture was often the first step in emerging from what they
called the macho culture, which was based on the art of the
deal. In the macho culture, processes varied enormously to
fit with immediate circumstances.
In the last decade, people have grown from process think-
ing to system thinking. Customer focus has developed from the
process focus, and we get what Deal and Kennedy (1982) call
the work hard/play hard culture. The organization develops
47
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teamwork and its own unique language. This culture is encour-

aged by the financial stakeholder, as the correlation to short-
term profit is high. If you focus groups of people on working
incredibly hard on providing what the customer wants, then
the customer will give us what we wantmoney . . . and fast.
This work hard/play hard culture is based on only some of
the values of quality; it succeeds through heroism but leads to
burnout.
A quality culture embraces longer-term values: prevention
instead of correction, investment in learning, a desire for excel-
lence, and most importantly a focus on the needs of tomorrow,
not just today. The currently fashionable term for all this is sus-
tainability, which came from the environmental folks.
Perhaps one of the best examples of a quality culture that
I have encountered was at Cadet Uniform Services. My local
section of ASQ visited Cadet as part of its regular meeting
program. Without exception, the ASQ members came away
from Cadet overwhelmed. People said, You could actually
feel quality coming out of the walls. At Cadet, you immedi-
ately sense the trust among people, and yet you feel the drive
for ever-improving customer service. Any new person joining
Cadet is thoroughly interviewed by at least four and sometimes
up to ten people. If the potential employee measures up, they
are asked to study the values that Cadet sees as fundamen-
tal. If they agree, then they are asked to sign the agreement.
Cadet didnt arrive in this position overnight, however. Like
other companies that have developed a quality organization,
there were failures along the way. But all that have developed a
quality organization did it by changing, and by using a change
process.
I spent many years in the Courtaulds Group, which was
so large that the culture varied across the different parts of the
group. In some parts, people believed in helping each other, in
sharing knowledge, and in the greater good of the successful
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Chapter Five: Culture 49
team. I have lifelong friends from the department of chemi-

cal engineering, where I first worked. The department was cre-
ated by Frank (later Sir Frank and finally Lord) Kearton. Frank
Kearton was feared and yet respected; he was tough, but he was
forthright. He created a line of succession based on skill and
ability. Recruitment into the department was carried out with
deep scrutiny of all applicants. I remember meeting the great
man at a later stage in my career and still carry the memory of
his ability to see right into people. He chose the right people
for the culture he wanted, and the culture survived generations
of department heads.
In my later years in the group, I worked in an area where
people were preoccupied with personal survival. They were
always trying to catch the chairmans ear, and information or
knowledge was jealously guarded as a source of power.
CULTURE AND SHARED VALUES

I left Courtaulds and was privileged to work in an organization
created by Phil Crosby. I felt privileged because the people I
worked with wanted to help me, and while they all possessed
an awesome level of skill and knowledge, they had no need to
prove it to the people they worked with.
Phil Crosby personally interviewed everyone who joined
the organization, and identified whether they had the right
set of values. Every interviewee met up to ten Crosby people
before joining, and the organization cross-referenced all inter-
viewees. I have formed long-lasting friendships with people I
knew at Crosby. We shared the same principles and values, and
still do.
Do you see the commonality with the Courtaulds depart-
ment of chemical engineering? To develop the culture you
want, you must have total buy-in to your values from your
senior managers, and you must ensure total commitment to
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those values with any new person joining the organization, and
ultimately everyone else in the organization.
I left Courtaulds after spending several years in a part of the
business where the culture was very different. I left because my
basic values were being compromised continuously, and I was
changing into a person I no longer respected. I was becoming
a chameleon, capable of shifting to fit any situation. I didnt
realize this at the time, only in hindsight. The turnover of senior
managers in this part of the business had become very high.
The internal failure of that part of Courtaulds was masked
by external commercial success. Household textiles were a
boom segment of the British economy during the 1980s. Even
though customer service was appalling, the customer was so
hungry for the product that no serious effort was made to elimi-
nate the root cause of bad service. A glance at the competition
showed what could have been achieved, and the competition
wasnt too spectacular either!
In Chapter 3, Vision, you probably started to build a
picture of the company youd like to be. Most likely there are
many things you do already that are good, and many things
others do that are better. We are starting to talk about change
specifically a fundamental change in the way we do business.
This means a change in our company behavior, which is based
on those values or principles we believe are important. Our
company culture is the values, beliefs, and behaviors that our
company has learned over time.
However, in the same way that a company has a culture,
each member of the company comes from a family that has
its own culture, and those same people reflect the culture of
the nation in which the company operates. Bringing together
both the national culture and the family culture of the com-
pany members provides the business with a real challenge as it
changes its culture to one in which a belief in quality is a prime
value.
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A common factor in the organizations I have described is the

strength of the leaders. You may be thinking that youre not Phil
Crosby or Frank Kearton (most of us arent), but the distinctive
feature of these people was a clear set of values that they adhered
to, day in and day out, as did the people immediately surround-
ing them. You dont have to be a big name to be a good leader.
For part of the time that I was in the household textile divi-
sion of Courtaulds, I ran the sales operation of Christy Towels.
In the UK, the Christy brand has an 80 percent recognition fac-
tor in the male population, and nearly 100 percent in the female
population. The humble towel was invented by William Miller
Christy after visiting the harem of the sultan of Turkey and see-
ing a strange loop pile fabric being woven by hand. Queen Vic-
toria purchased the first six dozen towels at the Great Exhibition
of 1851, and Christy has produced quality Royal Turkish Tow-
els ever since. With this kind of reputation, youd think the job
of sales manager was a sinecure (sinecure is an old government
term for a well-paid job where you dont do any work).
Not so. The brand became debased in the 1970s through
wide price variations and poor designs. Although the consumer
still thought of Christy as the best, the retailer had developed
a deep mistrust and no longer stocked the product. Gordon
Johnson, a man with strong personal values, was given the job
of reviving the dying animal.
As general manager, Gordon created a culture at Christy
based on pride and trust. As sales manager, I communicated
the integrity inside the organization to the external customer in
terms of price integrity, and we put design back into the product
by listening to what the customer wanted. More importantly, the
external customer sensed the internal culture of the organiza-
tion and trusted us with their business. Christy Towels became
an oasis of trust and respect inside the larger business division,
where values such as respect for the individual and respect for
the customer were not present.
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Gordon withstood the barrage of dishonest practices around

him, and people inside Christy respected him for this.
THE DESIRE TO CHANGE CULTURE

In the past, the culture that was most often discussed, and least
understood, was probably the IBM culture. Thomas Watsons
respect for the individual credo was deeply rooted in the
organization. I cannot begin to describe one of the strongest
company cultures of our time in this short space, but when
faced with the decision in 1992 to change or die, IBM chose
to change. Bringing in Lou Gerstner as CEO showed a clear
commitment to change many of its outdated practices so that it
could survive in a world where more flexibility is needed.
More recently, Procter & Gamble showed its willingness
to change. CEO A. G. Lafley, in 2002, saw the need to become
a more innovative organization. P&G had a long history of
research and development; however, its process was too slow.
It recognized that the best new ideas were outside the organiza-
tion and that it had to change from being a researcher to being
an explorer. The business went through a fundamental change
in behavior, from the mantra not invented here to proudly
found elsewhere (Huston and Sakkab, 2006).
GENERATIONS IN THE WORKPLACE

It is important to remember that values and hence culture can
differ between generations. We are experiencing this now in the
workforce.
The veteran generation, born between 1933 and 1945, grew
up in the Great Depression and has the attitude Work First. As
a result of being the children of the Depression, they are loyal
and stable and disciplined. They conform, have a strong work
ethic, and are detail oriented. They appreciate courtesy, want
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satisfying work, and like to make a difference. People work-

ing with vets must also account for age and so need patience,
explanation, and directive leadership. They think in terms of
one right answer.
The postwar baby boomer generation, born between 1946
and 1964, grew up in a world of sport, are driven to compete,
and like challenges. They are hard working, know how to sur-
vive, and are team players. They are optimistic, want to please,
want respect, and like being valued. Success is important. They
need immediate and personal gratification. They need clear
goals and guidelines with constructive feedback.
Generation X is the term applied to people born between
1965 and 1976. The children of the 1960s hit the workplace
during generally harder times than their parents. As a result,
they are far less loyal than their parents to the organization they
work for. Their attitude is that they make money to live. They
want fun at work. They are independent, self-reliant, and flex-
ible. They are more results oriented and less team oriented, and
they welcome growth and challenges. They need defined goals
but want to be trusted to do things their own way.
Boomers, who are generally the senior managers of today,
make the mistake of thinking Gen X and Gen Y are the same.
Generation Y, born between 1977 and 2000, are the new entries
to the workforce. Unlike Gen X, they are team oriented and
enjoy group action. They are the digital generation, love enter-
tainment, and are well educated. However, they need structure
and supervision. Like the boomers, they need immediate grati-
fication and feedback. Their attitude is Live then work.
CULTURE CLASH
A word of warning: It is very easy to crush a culture that is
based on trust and respect and is customer focused. The biggest
cause of failure in company mergers or takeovers is the clash of
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cultures. Christy Towels was absorbed into a larger organiza-

tion, and within four years a mill that had successfully served
the customer for 140 years was dead. The name survives, but
does the soul? The good news is that Gordon Johnson kept his
values, if not his job. The bad news is that 200 people in Man-
chester joined the lengthening British unemployment line.
Across the world from Manchester, the Crosby organiza-
tion in the United States was purchased in 1989. The British
press quoted the purchaser, Lord Stevens of Ludgate, as saying
that a softer image was wanted for his own organization. He
regarded Crosby as having the type of company culture that
people aspire to. Reading a contract of employment for these
new owners will tell you about the company culture. They were
very concerned about their reputation in many parts of the mar-
ketplace. Four years later, about 30 of the 300 people in Crosby
at the time of the takeover remained. The senior management
of the new owners had no desire to change their culture. They
had succeeded in the old culture and were certainly not going
to jeopardize their success.
WHAT CULTURE DO YOU WANT?

If you are developing a vision of a successful organization in
which people do it right the first time, you have to decide
what kind of people you expect to see in your organization. You
need to decide how you will behave. You will see that peoples
behaviors and hence their skills, or core competencies, are a
key part of that culture.
A CULTURE TO ASPIRE TO
As we look at the company cultures of today, I find that there
are a limited number of cultures to aspire to. The financial melt-
down of 2008 and the scandals of Enron and Worldcom show
H1320 Merrill.indd 54 3/13/09 4:57:57 PM

that blind allegiance to the capitalist code of the last hundred

years must be questioned. The deregulation of the Reagan years,
combined with the desire of many leaders to satisfy short-term
personal greed, has meant that the majority of the population
has become financial casualties. I repeatedly hear people say
that the purpose of business is to make a profit. What a miser-
able view of business. Read Peter Druckers The Practice of Man-
agement (1955) and Peter Senges The Fifth Discipline (1990).
(A third Peter, Peter Merrill, agrees with them wholeheartedly.)
Profit is one and only one measure of performance, and it must
be measured over a period of time, not just a year, to tell us
whether a business is successful.
Legislation such as Sarbanes Oxley and standards such as
ISO 26000 (Social Responsibility) show that we will not toler-
ate the behavior of people who, in the words of Shakespeare,
are either liars or fools. In the midst of this sad mess are com-
panies that have moved beyond the macho culture, the process
culture, and the team culture. These organizations respect the
individual, respect their suppliers, and respect the customer.
They know that old saying: Your staff will treat your customer
the way you treat your staff. They know that successful orga-
nizations have mutually beneficial supplier relationships.
Google gives its people one day a week to explore. It has
developed a set of values that you can see right away fits its
unique business and yet reflects the values of quality:
1. Focus on the user and all else will follow
2. Its best to do one thing really, really well
3. Fast is better than slow
4. Democracy on the Web works
5. You dont need to be at your desk to need an answer
6. You can make money without doing evil
H1320 Merrill.indd 55 3/13/09 4:57:57 PM

7. Theres always more information out there

8. The need for information crosses all borders
9. You can be serious without a suit
10. Great just isnt good enough
I especially like 6You can make money without doing
evilwhere Googles particular focus is on relevant and non-
manipulative advertisements.
WHERE DO WE GO NOW?
Did you take that time to build your vision and values? Do you
have a clear and concise policy statement? Have you built the
vision in the minds of everyone in the organization?
Maybe you did, but youre not sure whether everyone
in the organization understands. Have you asked? Have you
checked? Do they know whether you are going to Berlin, Paris,
or Rome?
If you are clear about where you want to be, do you know
how youre going to get there? Most organizations think that if
they educate everyone (teach them how to drive) and give them
a toolbox (SPC, fishbone diagrams, process model), people
will drive confidently and excitedly down the highway, arriving
simultaneously at the chosen city. But it doesnt really happen
that way, does it?
You do need a vehicle to get to your chosen destination of
being a quality organization. The half-dozen people who lead
your organization need to learn how to drive this vehicle first,
and they should become good enough drivers to teach their
own immediate staff.
This vehicle will be called the change process. Its the
process you will operate to change your organization from an
uncoordinated, crisis-riddled money waster to that vision of an
H1320 Merrill.indd 56 3/13/09 4:57:57 PM

organization where people do things right the first time (not the
second time) and where you are able to respond to your custom-
ers and keep them happy. Did you have a change process when
you started your quality journey? Perhaps you did, but there
were so many obstacles on your highway that you never really
got started. What are the obstacles to making change happen in
your organization? Well look at these in Chapter 6.
BROWSERS BRIEFING
The evidence shows that for long-term success, a cul-

ture must encourage behaviors such as trust and respect
between people, increasing and sharing knowledge,
continuously improving performance, and satisfying
the ultimate customer.
The way you do things is a reflection of your culture.
If you change the way you do things, you will change
your culture.
Cultures vary among families, among companies, and
among nations. Your company culture reflects your
national culture and the culture of the families that
your people come from.
Benchmarking successful organizations will show the
behaviors that encourage success.
Behaviors such as secrecy, politicking, pursuit of self-
interest, and interdepartmental sabotage will make
single departments successful. These behaviors will
also make other departments fail.
For the organization to succeed, all departments must
succeed.
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Organizational failure is often masked by commercial

windows of opportunity, which produce a short-term
profit.
Recruit new people who will behave in accordance
with the behavior patterns you want to encourage.
The leaders of your organization are the role models
for the culture you aspire to. The leadership must buy
into and practice the culture you wish to create.
A culture must have a desire to continuously change
and improve.
To make quality values part of an organizations way
of life, a change in culture is required, and the culture
change requires a change process.
REFERENCES
Deal, T. E., and A. A. Kennedy. 1982. Corporate Cultures. New York:
Perseus.
Drucker, Peter F. 1955. The Practice of Management. London:
Heinemann.
Huston, L., and N. Sakkab. 2006. Connect and Develop: Procter &
Gamble Model for Innovation. Harvard Business Review, March.
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PART III
The Change
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H1320 Merrill.indd 60 3/13/09 4:57:57 PM
6
Resistance to Change
It is not the strongest of the species that survive, nor the most
intelligent, but the one most responsive to change.
Charles Darwin
C
hange can be exhilarating, or change can be scary. Imag-
ine driving a red Porsche on a German autobahn (a four-
lane highway) at 120 mph. If you like speed (and for
speed you can read change), the experience is exhilarating.
Close your eyes and imagine how it feels. Now imagine yourself
in the passengers seat. In the drivers seat is someone you know
but dont entirely trust, or who has lost interest in the experience.
Youre still doing 120 mph. Close your eyes again and capture
your feelings now. The majority of people in the organization
feel like you felt in the passengers seat: terrified! They are not
in control of their destiny, and no one will tell them what will
happen next.
LEARNING HOW TO DRIVE

You have to start the change process slowly. Leaders of the
business have to learn how to drive the vehicle before it gathers
speed. Then they have to learn to share the driving with others
61
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62 Part Three: The Change
in their organization if they want everyone to participate in the

change process.
Many senior managers I have encountered think they know
how to drive. But they havent taken the time to learn to do
it well, and they certainly dont recognize that change is a
new and different vehicle. This journey is going to match you
against world-class drivers; its not a Sunday drive in the coun-
try. The management team must all learn how to be world-
class drivers eventually, but they will be taking the vehicle on
the road immediately.
Most managers have a different picture of where they are
going. Some think the autobahn goes to Berlin, others believe
the autoroute heads to Paris, and yet others think the auto-
strada is bound for Rome. People dont even know what the
destination looks like. Are the buildings 20 years old in Berlin,
200 years old in Paris, or 2000 years old in Rome? Are there
blue skies or is there snow? Is the temperature freezing, or hot
and humid?
On the other hand, many chief executives believe they
already have a wonderful culture and dont see the need for
change. You must face the reality that your own company cul-
ture can always become better suited to encouraging quality to
happen. Otherwise, you wouldnt have a problem delivering
quality. In reality, it could probably be a lot better suited to
making quality happen.
Do you trust and respect the people you work with? Do
you recruit people who are compatible with the culture you
are moving toward?
Look again at the reasons why you are not able to deliver
quality at the moment. In the opening chapter, we saw the fol-
lowing main reasons:
1. Poor communication
2. Unclear and changing requirements
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Chapter Six: Resistance to Change 63
3. Lack of senior management commitment

4. Employee cynicism and poor morale
5. Lack of training
6. Bad suppliers
7. Not sticking to procedures
8. Quick fixes
9. Lack of time
10. Lack of process ownership
Youd think that with a list like this, changing things would be
easy. Yet over 70 percent of the organizations that have tried
quality management have not achieved the results they wanted.
You and the people in your organization have the in-depth
knowledge to identify your own reasons for failure. However,
the number one reason, time and again, is resistance to change,
which can be rewritten as fear of change.
RESISTANCE AT EVERY LEVEL

Fear of change comes at all levels in the organization and at
different times in the quality improvement process. The com-
pany president fears that the company, the presidents baby,
will change into some unrecognizable Frankenstinian monster.
Their resistance is subtle, and it is achieved through that won-
derfully legitimate tool called delegation.
The vice presidents are the real crisis managers, and their
career success has come through dealing with the abundance
of crises the company has generated over the years. Subcon-
sciously, they may drag their heels on removing the root causes
of the companys problems.
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The middle managers and supervisors are the most threat-

ened by change. Their traditional role has been that of the dic-
tatorial coach, telling people what to do and translating the
unreasonable demands of the leadership into practical action.
They will soon be asked to go out on the field and participate.
Can I still even catch or kick the ball? they ask. Resistance
here is often the most damaging, and these are usually the most
skilled and experienced people you have. Their skills and expe-
rience need to be focused on the new change process. More
attention needs to be paid to this group of people than almost
any other. They need to develop new skills and knowledge.
The clerical and operational staff will embrace change
with the greatest welcome but will be the most skeptical about
whether management is truly committed.
Nearly everyone Ive talked to or whose material Ive read
agrees that resistance to change is the biggest obstacle to mak-
ing quality happen. You may be saying, But I thought lack
of top management commitment was the biggest obstacle?
For lack of commitment, read passive resistance or loss of
interest in change.
This is why you must create a clear and simple picture of
where you are going. If you want to be a quality organization,
youll need to know what a quality organization looks like.
Dont give people conceptual or abstract pictures like, We will
all be prevention-oriented and conform to customer require-
ments while striving for continuous improvement. This is a
consensus statement from a management team that argues
all morning about its vision. You must be specific and talk
about your own organization.
These are some of the actions to encourage change:
Remember the advice in Chapter 3 to visit companies
that are doing a good job in quality. Include everyone so
that they can see firsthand what a quality organization
looks like.
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Continuously feed people videos of companies that are

doing a good job in quality.
Identify areas in every department and in every individ-
uals job where they are doing a good job in quality.
Explain that your journey will mean making these good
practices the norm and not the exception.
Make the picture very tangible and concrete.
In the preface, I talked about the values I received from my
mother and father. You too were given a basic set of values as
a child. If your company is going to be operating in a qual-
ity manner, you need to have everyone agree on these basic
values.
This basic set of values will become the ten command-
ments of your new organization. Philip Crosby did an excel-
lent job in this regard with his Four Absolutes of Quality. You
must write down your values, just as Moses received the Ten
Commandments on stone tablets.
Thomas Watson Sr. gave IBM the Basic Beliefs of respect
for the individual, best possible service to our customer, and
every task performed in a superior manner. Until you and your
senior managers are practicing your values all day, every day,
the rest of the organization wont even be interested. When you
were a child, you tried to do what your parents said, but sub-
consciously you copied their actions and not their words.
As the organization becomes more customer focused, its
structure will change, becoming flatter, and peoples roles will
also change. The president may become more aware of events
inside the organization and will no longer give approval to ship
nonconforming goods or give preference to favorite clients.
The vice president may become more of a planner and less of
a crisis manager. The supervisor will become more of a team
player and less of a babysitter.
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We will talk more about the shape and structure of the new
organization later.
BARRIERS TO CHANGE
Lets look at some of the barriers to change that we actually
build ourselves by misusing the tools and techniques of change.
These barriers include our meetings, our education, and our
administration, among other factors.
Meetings
I think the John Cleese video Meetings, Bloody Meetings should
be required viewing for all who enter the quality improvement
world. The video shows all the classic failings in a meeting,
from the overbearing and abusive chair to the lack of agenda
and lack of pre-meeting preparation. It does this in a light-
hearted way that really brings across the message.
Time and again, people end up with a quality process that
is an endless round of meetings. The more you talk about
change, the less time you have to implement it. Well discuss
meetings more fully in Chapter 16, Teamwork, but for now,
just be aware that they can be an even bigger time waster
than they already are. Clear objectives, a specific agenda,
and good preparation will minimize the number and length
of meetings.
Virtual meetings have become essential for enabling team
communication, and these require even more care in prepara-
tion. I will talk more about this in Chapter 16.
Education
A lot of people in business love education, because as long as
you keep learning new stuff, you dont have to go out and apply
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it. The other problem is that people go for education saturation,

leaving everyone so totally absorbed with new knowledge that
they dont know where to start applying it. Just-in-time educa-
tion is the secret here. The half-life of education is about 30
days. In other words, if you havent used your new knowledge
within a month, you will lose half of it.
Bureaucracy
Making quality a series of manuals, documents, and minutes
of meetings brings death by steady suffocation. This is partly
the legacy of the old quality control approach and partly a
problem caused by big organizations, such as the large auto-
mobile and computer manufacturers. Such bureaucracy cre-
ates a barrier as impenetrable as the old Berlin Wall. Change
cant happen without multilevel approval. The time required
to write in change means that change is outdated before it is
implemented.
We Can Do It Ourselves
Ultimately, you must make the change yourself. However,
you will probably need help learning how to do it, along with
someone outside your organization to kick you when youre
in danger of becoming complacent. Everyone in your orga-
nization has a vested interest in the status quo; you cannot
be a prophet in your own land. You must have someone who
answers to no one in the organization to tell you where you
are going adrift.
NATIONAL CULTURE
When I proposed that ISO develop a guidance document on
People Involvement in Management Systems (ISO 10018),
there were many who said this was not possible, because
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cultures vary so much around the world. This view is based

on stereotyping. When I have lectured on culture at Guelph
University, students have enjoyed picking out these stereo-
types. Going alphabetically, they might read like this:
AmericaReady, fire, aim
BritainGoing to the pub
CanadaPeacekeepers
DeutschlandAttention to detail
EspaniaParty people
FranceFood and wine
We all know these are minor attributes and point to minor
differences.
One of the greatest rewards of leading the ISO 10018 group
on People Involvement has been the opportunity to experi-
ence the widespread consistency in quality values, as we have
met in such widely varied countries as Brazil, China, Canada,
Japan, and Serbia. We are also learning to celebrate diversity
and to recognize that there is far more commonality in diversity
than there are differences.
THE STRESS OF CHANGE

You cant avoid stress. Change is stressful, and stress is
another barrier that must be confronted. When we look in
detail at the change process, we see how breaking change
into bite-size chunks, involving everyone (no secrets), and
having a clearly shared vision are some of the ways to deal
with this stress.
Change is not a one-shot activity. You either keep changing
or die. You have to decide whether to keep steering toward the
H1320 Merrill.indd 68 3/13/09 4:57:57 PM

vision you have designed (and this will constantly grow and
change) or let the seven seas of the business world push you
on a random course toward what might be storm and tempest,
hidden rocks, or the Sargasso Sea. Better to take steps to deal
with the stress of the change you choose than to allow random
destruction through forces you cant control.
THE TIME TO INVEST IN CHANGE

I repeatedly find people who are trying to get started in qual-
ity but cannot find the time that is needed to manage the qual-
ity process and work on eliminating problems. Im often as
guilty as they are. There is always a customer to respond to,
but unless we devote time to improving our own health and
the health of our organizations, both will deteriorate.
Budget Time for Quality

Successful Japanese companies devote 15 percent of their
timenearly one day a weekto continuous improvement.
When you carry out that first-cut cost of quality (see Chapter 12),
youll find you waste at least 25 percent of your time reworking
information, firefighting, or dealing with unhappy customers.
You must budget time for quality. Start with two hours a week
minimum and work up to four hours a week, which is still less
than 10 percent of your time. But you must give that time every
week. In Chapter 9, I will ask you to identify how you spend
your time. Youll need to sacrifice something in the list shown
in Figure 9.3 to create those four hours. And be realistic about
your sacrifice. You will not fit those extra four hours in during
your lunch hour or after hours. You must be talking prime time
for quality improvement activity.
H1320 Merrill.indd 69 3/13/09 4:57:57 PM

Decide How to Spend That Time

Next youll need to decide how to spend that time:
Youll probably have an hour a week initially (an hour every
two weeks later on) with the quality management team
Youll need an hour a week to work on process improve-
ment in your own department, and probably an hour a week
on one of the cross-functional corrective action teams
Finally, spend an hour a week on yourself for process
improvement in your own job or to increase your per-
sonal skills and knowledge of quality
These are only suggestions. You might well allocate your time
differently, but you must allocate time to the categories Ive
described. I strongly suggest you keep a daily check sheet of
the time you spend on quality.
If this all sounds familiar, youve probably taken a time
management course at some time in the past. If you havent, I
suggest you do so soon.
It all comes down to being as disciplined with your time
as you are with your money, and recognizing that you have to
invest time in quality in order to get a return on quality.
Make Time for Education

Another big time problem arises when people start their edu-
cation in quality. They see this education infringing on the time
they could be spending fighting fires. They eagerly await the
end of their formal education so that they can get back to the
mess they like to wallow in.
I talk about education in Chapter 14, but the key point to
remember is that once you and your staff have started invest-
ing, say, two hours a week in education, you commit to invest-
ing time in quality improvement once the formal education has
finished.
H1320 Merrill.indd 70 3/13/09 4:57:58 PM

Sun Tzu says in his book The Art of War, The warrior
who knows his enemy best will win the battle. Knowing the
enemies of change will be one of your keys to success before
embarking on the change process, which we will discuss in the
next chapter.
Figure 6.1 shows a simple questionnaire to help you assess
your own capacity for change. If you score less than 70, this
indicates that you will have difficulty handling change.
Strongly Strongly
agree Agree Disagree disagree
We use customer
feedback as high-value
information
We ask our suppliers for
feedback
We accept our
colleagues ideas
People have two jobs:
doing their job and
improving their job
Failure is not criticized
We educate our people
continuously
We dont dwell on the
way we were
We know what our
organization intends to
be like in 3 years
Total checked
4 3 2 1
Total points per column
Add column totals = pts
3= %
Figure 6.1 How do we handle change?
H1320 Merrill.indd 71 3/13/09 4:57:58 PM

BROWSERS BRIEFING
When you initiate a culture change, many people will be

scared, even when the change seems to benefit them.
Business leaders are role models for the new culture,
both in the way they act as individuals and in their
behavior with each other. Everyone needs to know
where they are heading during this culture change and
why they are heading there.
Middle managers and first-line supervisors are the
most threatened by change. Their traditional role (and
perhaps their job) is likely to be eliminated.
A quality culture has no need for babysitters. You dont
need people checking on other people to see if they did
it right the first time.
People like change. People dont like being changed.
Senior managers skilled in crisis management will not
need those skills in a quality culture.
A clear vision is a prime requirement for overcoming
resistance to change.
The vision has to be based on agreed upon values.
Meetings can be a barrier to change. The more you
talk, the less you actually act.
Education can be a barrier to change. As long as you
stay in education mode, you dont need to act.
Paperwork can clog the arteries of the organization and
be a barrier to change.
H1320 Merrill.indd 72 3/13/09 4:57:58 PM

Fooling yourself into thinking you can do it yourself is

a great way to get stuck in an organizational logjam.
Saying that your national culture is not appropriate for
a quality company culture is admitting defeat.
Change creates stress in the organization and in its
individuals. You need a plan to deal with and eliminate
stress.
Change takes time. In the same way you need a cash
budget, the organization and the people need a time
budget. Plan your time and use the time you plan.
H1320 Merrill.indd 73 3/13/09 4:57:58 PM

H1320 Merrill.indd 74 3/13/09 4:57:58 PM
7
The Change Process
Change will not come if we wait for some other person or

some other time.
Barack Obama
E
lton Mayo is a name familiar to those who have stud-
ied behavioral sciences. He is best known for the Haw-
thorne experiments, conducted at the Western Electric
plant near Chicago in the late 1920s. The part of his work that is
most celebrated is a series of tests he did on the effect of light-
ing intensity on the productivity of employees. As he increased
the lighting in a work area, he measured and found an increase
in the productivity of those employees.
Unremarkable, you might say. If I can see better, of course
I can work better. The twist came when, good scientist that he
was, Mayo carried out a controlled experiment. He dropped the
lighting level, just to confirm that productivity would decrease.
To his surprise, productivity increased. The increase occurred
because attention was given to the people, and not because of
the increased lighting. He had unearthed the important people
element in productivity during the mechanistic times of work
studya time when peoples identities were being removed
from their daily working lives.
75
H1320 Merrill.indd 75 3/13/09 4:57:58 PM

At about the same time, Walter Shewhart was developing

his ideas on process analysis and statistical process control. He
saw the importance of measuring the performance of a process
and analyzing the data in order to pinpoint weaknesses in the
process. He showed that people were often asked to produce
results from a process that was incapable of providing those
results, and no amount of effort would overcome the process
limitation. Shewhart had uncovered the importance of mea-
surement in driving improvement (Dowd 2006).
JURANS AND DEMINGS INSIGHTS

Two more people enter the story here, the two great gurus of
quality: W. Edwards Deming and Joseph Juran. Both had the
good fortune to work at the Hawthorne plant at that same time.
They saw the importance of achieving a balance between pro-
cess and people when you are looking for improvement in the
quality of your goods or services.
Many people over the years have ignored this fundamental
truth. I know of organizations that believe that process manage-
ment or statistical process control is all that is needed to root out
problems. They have totally ignored the need to build trust and
teamwork through improvements in interpersonal communication
skills, and the need to give people feedback and recognition.
Equally, I have seen organizations invest heavily in team
building and communication workshops and develop wonder-
ful reward systems, but totally lack any numbers as evidence
of change or improvement. Everyone says how wonderful the
work environment has become, but ask them for hard evidence
of happier customers and they shrug.
In the 1980s, many companies invested in an enlightened
fashion in the soft skills, the people improvement skills. When
the recession of the early 1990s bit deep, companies invested
less in their people and looked for instant results from process
reengineering.
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Chapter Seven: The Change Process 77
The balance between people and process during change is

critical. You must not engage in process improvement activity
without dealing with people improvement at the same time.
A MODEL FOR CHANGE

Change must be led from the top of the organization. Change
will involve processes and people, and change will be contin-
uous if you want to deliver quality services and products to
your customer. I find the model diagram in Figure 7.1 helps
people remember the key components. We will come back to
the leadership issue in Chapters 8 and 9, and we will focus on
maintaining continuity in Chapter 18. In this chapter we focus
on the balance of people and process in the change model.
These two arms of the model are often referred to as the hard
skills (process) and the soft skills (people) of quality. The
process improvement arm of quality deals with the analytic
and numerical side of quality improvement, while the people
improvement arm deals with the creative and developmental
side. You could call them the left brain and right brain of qual-
ity improvement.
Developing the change model further, Figure 7.2 shows
four quite arbitrary stages within each arm. There could be
ten stages in each arm, but I find most people are comfortable
considering four. Its a bit like saying that science comprises
Leadership
Process People
Continuation
Figure 7.1 Key components of change.
H1320 Merrill.indd 77 3/13/09 4:57:58 PM

Leadership
Process Education
ownership
Left Measurement Communication Right

brain brain
Cost of quality Teamwork
Corrective action Recognition
Continuation
Figure 7.2 Process improvement model.
mathematics, physics, chemistry, and biology. We know there

are many more divisions, but these four are manageable as
working divisions.
FOCUSING ON PROCESS IMPROVEMENT

The four stages of process improvement are developed in Chap-
ters 1013. You will follow these stages over a period of many
months as you seek to improve your processes, or you may at
times fast-track the sequence in one day in order to tackle a
specific problem.
Process Ownership
The first activity, which is overlooked by so many who enter
the quality arena, is to establish process ownership. This has to
be done, first at the business level, and then at the departmental
and operational levels. In doing this, you will unearth many
orphaned processes, and just assigning owners will produce
H1320 Merrill.indd 78 3/13/09 4:57:58 PM

dramatic improvements. You may find that as many as half of

your processes lack clear ownership.
Measurement
Process owners can then start agreeing on requirements with
their internal customers and suppliers, and flushing out the
requirements that are not being met. These nonconforming
requirements can then be measured. Too often I see companies
that start measurement without doing the critical foundation
work of process ownership. Measurement must be done by the
owner of the process, who may well need the support of the
internal customer in collecting measurement data. This is where
we see the importance of soft skills in enabling the commu-
nication here to work freely and to cut out finger-pointing.
Cost of Quality
Measurement data will cause process owners to think about
the root cause of the process problems. We will see in Chap-
ter 11 how measurement is the cutting edge of process improve-
ment. Measurement data tell us the magnitude of the process
problems, and this is where the wonderful communications tool
of cost of quality comes into play. The great advocates of cost of
quality have been Philip Crosby and Joseph Juran. In Chapter 12
we will explore cost of quality in depth. Cost of quality enables
you to translate your measurement data into the common lan-
guage of business, and so prioritizes which process problems
should be the focus of your very finite business resources. Cost
of quality also enables you to measure return on investment for
your improvement efforts. In short, cost of quality is the lan-
guage of business, and it is also a communications tool.
Corrective Action
You will have applied corrective action to many of your
problems as you went through the previous stages of process
H1320 Merrill.indd 79 3/13/09 4:57:58 PM

improvement, and you are now left with a core of problems that
typically run across the different functions of your organiza-
tion. This is where a systemized approach to corrective action
will be needed. Using cost of quality to drive your corrective
action system will make it operate much more easily, and at
the end of a corrective action project, the team that tackled the
problem will see the dollar reward for its efforts.
FOCUSING ON PEOPLE IMPROVEMENT

The four stages of people improvement will be discussed in
detail in Chapters 1417. The following sections introduce
each stage briefly.
Education
Clearly, the first step in people improvement must be education.
This seems a costly item, but to quote a message I once saw on a
T-shirt, If you think education is expensive, try ignorance. Edu-
cation feeds into and links with all the other steps in the change
process. Education is vital before people can participate effec-
tively in the process improvement arm of the change process.
Education can also be one of the biggest barriers to change.
I mentioned in Chapter 6 that people love to get trapped in edu-
cation because it means they dont have to apply what theyve
previously learned. You should provide just-in-time education,
so people can learn a bit and then do a bit. It is important that
your time for education and all other parts of the change pro-
cess is planned well.
Communication
Education will launch the other stages of the people arm of the
change process, and in particular, communication. Poor inter-
personal communication is one of the major obstacles to deliv-
ering quality. Amazingly, Albert Mehrabian (1971) found that
H1320 Merrill.indd 80 3/13/09 4:57:58 PM

over 80 percent of communication is neither written nor spo-

ken. The majority of our communication occurs through body
language in the form of signs and signals. In addition, even
the smallest organization needs a communication system that
functions across all levels, and techniques like team briefing
will help here. As your organization becomes more customer
focused, horizontal communication becomes more important
than vertical communication. Communication skills are vitally
important in the transactions between internal customers and
suppliers, and most of all with your external customer.
Teamwork
As your internal communications improve and your internal cus-
tomer/supplier linkages are developed, youll find people operat-
ing in natural work groups, or teams, and teamwork skills will need
to be developed. You will find that this activity links very strongly
with the leadership step. As more teams develop, more leaders
will be needed, and more leadership training will be required.
The lack of team leadership skills is another of the hidden barri-
ers to the smooth operation of the change process. Many people
are discovering the need to invest in leadership training across all
levels of the organization. They are also finding that the nature of
leadership is changing as they move to self-managed teams. Two
years into the quality improvement process, the general manager
of Ontario Hydros Pickering facility in Ontario recognized the
need for further investment in leadership training as the teamwork
developed. The corrective action step also links up with teamwork
when you start to set up teams to tackle cross-functional problems
in your organization. Corrective action teams will bring together
people who have never worked together before, and good team-
work skills will be vital for efficient operation.
Recognition
The fourth stage in the people arm of the change process is rec-
ognition. You will find this to be one of the most talked about,
H1320 Merrill.indd 81 3/13/09 4:57:58 PM

most widely used, but least understood and least effectively

implemented activities in the change process. People will feel
insecure as change progresses. As they become more preven-
tive and less reactive, a small voice inside them will say, But
I always got rewarded in the past for being reactive and being
good in a crisis. If you want to encourage new behaviors, you
must be clear on which ones to encourage, and then relentlessly
reward and recognize those new behaviors. Only then will you
banish the insecurity and reluctance to change. Rewarding and
recognizing prevention will not come easily. Youll probably
also find that youll need to completely redesign your payment
and salary system to align with recognition.
THE BALANCE OF HARD AND SOFT SKILLS

Earlier in this chapter I mentioned how W. Edwards Deming
had been fortunate to be a student of both Mayo (soft skills)
and Shewhart (hard skills). This is necessarily a simplification
of the full story, but it is worth closing this chapter by relating
subsequent events.
Through World War II, Deming became involved in the
U.S. Census Bureau because of his statistical skills. The end
of the war saw Europe and the Far East in economic ruin, and
North America with the worlds only truly intact economy.
Deming talked about his beliefs in quality improvement, as did
Joseph Juran. But North America had no need to listen; it could
sell everything it made, and quality was all but irrelevant.
Deming went to Japan on postwar census activity and caught
the attention of Ichiro Ishikawa, one of the leaders of Japanese
business. Deming addressed a now-famous dinner meeting
in 1951 and lit the fire of Japanese economic revival through
quality. The Japanese began to blend hard and soft skills, and
the rest is history. Between 1950 and 1980, the global market
share of U.S. auto manufacturers fell from 76 percent to 23 per-
cent. American manufacturers of electronic goods declined in
H1320 Merrill.indd 82 3/13/09 4:57:58 PM

domestic market share from 96 percent to less than 1 percent

between 1955 and 1975. Even in the new high-tech industry of
microchips, the U.S. share fell from 60 percent to 40 percent
during the 1980s (Bowles and Hammond 1991).
In 1981 a television program highlighted this Japanese suc-
cess; North America finally began to wake up. The third guru
of quality had what the others lacked: timing and packaging.
Between 1980 and 1990, when he finally retired, Philip Crosby
launched a thousand companies on his 14-step quality improve-
ment process. His big break came through knowing Paul Rizzo
at IBM, who gave him his first major opportunity.
Deming preached his 14 Points, and Juran promoted his
Quality Trilogy. Each approach had different strengths, and dif-
ferent organizations gradually blended the teachings of these
gurus to develop an approach to total quality management that
filled their own specific needs.
Unfortunately, many companies used this tailoring approach
to cut out some of the truths of quality management that they
found difficult to accept. Others misunderstood the teachings of
these early pioneers, and the basic message was often misinter-
preted. Most frequently, companies tried to do in 30 months what
had taken the Japanese 30 years. They simply picked up the tools
of quality but did not put into place the vital foundation work.
In the 1980s and 1990s U.S. automakers tried to address this
issue. In January 2007 they were hanging on to only 50 percent
of their domestic market, let alone the global market (Automo-
tive Digest 2007), but at serious cost to their margins. They
primarily addressed the process issues of quality management
using process cost reduction initiatives. They partially intro-
duced quality management, but most failed to change their cul-
ture. This finally led to them facing bankruptcy in 2008.
In the rest of this part we will look at how to manage the
change process using the ten steps in the change process model.
We will see where people misunderstood or chose to ignore the
truth of what was needed. As you analyze your own approach
H1320 Merrill.indd 83 3/13/09 4:57:58 PM

to quality, identify what you should do differently so that you

can do it right the second time.
It is also worth referencing the excellent work of John Kot-
ter at this point. His book Leading Change (1996) talks of the
eight stages of change. You will see them referenced in dif-
ferent ways in this book. His first stage is to create a burning
platform, followed by the second stage of gaining an early win,
both of which I address in Chapter 12, Cost of Quality. He
also talks of the need for a core team, which is the subject of
the next chapter.
BROWSERS BRIEFING
Improvement in the way an organization operates sig-

nifies change.
There must be a balance between people improve-
ment and process improvement when you change the
organization.
Change must be led from the top of the organization,
but everyone must be involved in the process and the
change must be continuous.
Process improvement starts with defining the processes
of the business, measuring their performance, selecting
the poor performers, and applying corrective action to
those poor performers.
People improvement starts with education of the indi-
vidual and leads to improved interpersonal communi-
cation and better teamwork.
People need feedback in both process improvement and
self-improvement, and recognition of new behaviors is
key feedback.
H1320 Merrill.indd 84 3/13/09 4:57:58 PM

Process ownership activity will reveal which business

activities are neglected, or even orphaned. It should
start at the business level and work down to the indi-
vidual level.
Measurement is the cutting edge of change and process
improvement, and it must be done by the process owner.
Cost of quality enables processes requiring attention to
be prioritized, and success in improvement to be mea-
sured in the language of business (dollars).
Corrective action should be applied in a structured
manner, using a corrective action system and the tools
of problem solving.
Education and training are what will ultimately dif-
ferentiate you from other organizations. Dont waste
education. Do it just-in-time.
Communication problems are the biggest cause of
organizational failure. Invest in communication sys-
tems and teach communication skills.
Good teamwork is the outcome of people improve-
ment. This is the core requirement for a smooth
operation.
Recognition gives people the feedback they need to
ensure new behaviors are endorsed.
The whole process is continuous and constantly recycling.
The gurus (Deming, Juran, and Crosby) have different
approaches, and we should learn from each of them.
Your own quality improvement process must fit your
own needs, but dont use this as an excuse to cut out
fundamental truths.
H1320 Merrill.indd 85 3/13/09 4:57:58 PM

REFERENCES
Automotive Digest, January 2007.
Bowles, J., and J. Hammond. 1991. Beyond Quality. New York:
Putnam.
Dowd, John. 2006. How the Japanese Learned to Compete. Lean
Management Institute.
Kotter, John. 1996. Leading Change. Boston: HBR Press.
Mehrabian, Albert. 1971. Silent Messages. Belmont, CA: Wadsworth.
H1320 Merrill.indd 86 3/13/09 4:57:58 PM

8
The Quality Management
Team: Agents for Change
They always say time changes things, but you actually have to
change them yourself.
Andy Warhol
T
he management team is the primary agent for change,
and yet all too often it doesnt know what to do. I want
to take you back to one early February in Canada. This
usually means snow and subzero temperatures. The environ-
ment in the conference room at Nacan, a division of National
Starch Company, was far from cool. A group of senior manag-
ers had been meeting for nearly four days and had been learn-
ing, debating, and analyzing how they would become the new
team that would manage the quality improvement process at
Nacan.
The company had been developing and implementing its
quality process for a little over two years, and the new team
was excited at the challenges ahead. The old team had been led
by the vice president of manufacturing, Brian Sayer, who was
now the company president. Sayer is a blunt, straight-talking
Canadian from the north of England. His team had put qual-
ity values in place at Nacan, and the commitment of his team
had been unwavering. The new team had moved beyond this
and was looking at the question, How would I like my boss
87
H1320 Merrill.indd 87 3/13/09 4:57:58 PM

to show commitment and improvement in quality? The team

listed specific actions, not generic clauses:
1. Spend real time with me and discuss quality issues
2. Give me the time to invest in quality improvement
3. Be a member of a corrective action team
4. Support me when I make a decision
5. Encourage me to obtain education and training
6. Recognize me when I do a quality job
7. Walk the talk
At the end of the discussion, one member of this new team said,
You know, thats exactly what my own people expect of me.
They had realized that lack of quality or failure in quality was not
something to blame on others. Although we are always talking
about organizations, these organizations are made up of individu-
als. Quality is something for which we are all personally respon-
sible. The other main lesson this team learned over the four days
was that quality improvement is continuousyou dont give up
after two years if you havent delivered on all of your objectives.
Their predecessors had worked hard and succeeded in develop-
ing a set of quality values. They now needed to move to the next
step and take the baton from the team led by Brian Sayer.
Now lets move further back in time.
THE FINANCIAL ANALOGY

Back in the 1940s, Joseph Juran, one of the early gurus of
quality, was having a real problem explaining to management
teams their role in managing quality. He found them repeatedly
wanting to be corrective action teams or debating societies. He
coined the analogy, You plan and manage quality in the same
way as you plan and manage finances.
H1320 Merrill.indd 88 3/13/09 4:57:58 PM

Chapter Eight: The Quality Management Team: Agents for Change 89
If you are looking at a new business, your first activity in

financial management is to analyze the book of accounts. This
is analogous to the assessment activity mentioned in Chapter 1.
In financial management, we then draw up a plan for financial
activity in the business over the next 12 months and call it a
budget. In quality management, preparing the 12-month plan
is a job for the quality management team (QMT), and once the
activities in the change process are understood, this becomes
top priority (well pursue this further in Chapter 18). Figure 8.1
shows an example of a 12-month plan.
J F M A M J J A S O N D
Leadership
Process
ownership
Measurement
Education
Communication
Teamwork
Recognition
Cost of
quality
Corrective
action
Continuation
High-profile
Development Continuity
activity
Figure 8.1 Implementation timeline.
H1320 Merrill.indd 89 3/13/09 4:57:58 PM

So far, so good, and most teams do fine up to this point.

The next stage is where many go wrong. Each member of the
management team has the job of implementing the quality plan
in their own part of the business.
IMPLEMENTING THE QUALITY PLAN

Just as the sales manager is responsible for implementing
the sales budget, and the research manager is responsible for
implementing the research budget, each member of the man-
agement team must implement quality activities like mea-
surement, education, and recognition in their own function
or department.
DEPTH AND SPAN OF COMMUNICATION

The first organizational step in leading quality, and the next
place where people go wrong, is in the role and structure of
the management team. Have you ever asked yourself why the
ideal size of a business unit is about 250 people, or why you
run into communication problems once you get more than
300 people? We all know the ideal span of control is about
six people; organizations have shown this for thousands of
years. Just go back through centuries of military history if
you think otherwise. What we hear far less about is the ideal
depth of control.
At this point I am going to erase the word control, with all
its implications of command and power, and replace it with
the word communication. The ideal depth of communication
is three layers; combine this with the ideal span of communi-
cation of six people and you have a general manager with six
heads for each of the main business functions. These function
heads each have six managers, who in turn manage six staff.
Add this up and you get 259 people (see Figure 8.2).
H1320 Merrill.indd 90 3/13/09 4:57:58 PM

General manager
6 Department heads
36 Managers
216 Staff
Figure 8.2 Ideal depth and span of organizational communication.
I can hear you say, Were not like that. Were different.
Two of our departments have two layers, and finance has only
six people. Im talking in broad terms, and if you think about
it, the evidence is overwhelming. Once you try to communicate
through more than three layers, the message gets lost. Once an
organization grows larger than 300 people, it starts to split like
an amoeba. Even if the split is not official, it has probably hap-
pened informally. Alternatively, anarchy sets in.
Think of all the work that organizations are doing to flat-
ten themselves. As you get deeper into analyzing your business
processes, youll see that by simplifying the process flow of
your business, you will require no more than three layers. Ive
worked with many organizations, every one of which is differ-
ent, and yet the maximum effective size of the business unit is
nearly always 3050 managers and 150200 staff.
You might be wondering about network management and
empowerment, and yes, these are natural developments as
organizations become more self-confident and develop their
own self-esteem. You cant use these as techniques to effect
change, however; they are the results of successful change in
a quality organization. In fact, Chapter 23 looks at the way
H1320 Merrill.indd 91 3/13/09 4:57:58 PM

your organizational structure will develop as you become

more customer focused.
Empowerment is the next point at which you may have
gone wrong. You set up your QMT as the agent for change and
decided to empower people by putting all the believers on the
team. The problem is that the believers, in spite of their com-
mitment to the new religion of quality, are not able to imple-
ment change. The believers might have come from the middle or
lower points of the organization and found themselves working
without authority against the vested interest of their bosses, who
have probably said, We tried that before and it didnt work.
The QMT is the primary agent for change and must con-
sist of the six or seven people who lead the business unit. These
people have the job of planning the change process, and they are
also responsible for making the change happen in their own
departments.
HOW TO SUPPORT IMPLEMENTATION

OF THE PLAN
To implement change, the management team must act in uni-
son, and each function head will need support in implemen-
tation. You create this support by having each team member
become a specialist in one or two elements in the change pro-
cess. One of you will be the education specialist, another the
measurement champion, another will coordinate the corrective
action system, and so on.
How will this work? Lets assume that youve reached the
point on your timeline where the management team wants to
implement measurement. (Look at the timeline in Figure 8.1.)
You agree that between now and your next team meeting, each
team member will ensure that each process owner in their
department has identified the main nonconformance to be mea-
sured, set up a chart, and started collecting data. The depart-
H1320 Merrill.indd 92 3/13/09 4:57:59 PM

ment head, not the measurement champion, is responsible to

see that this happens.
The measurement champion gives support by providing
company measurement charts, answering questions on measure-
ment technique, and providing any resources the department
might need to carry out measurement. The measurement cham-
pion also ensures that each function head keeps their promise
of implementing measurement in their own department.
Conducting QMT Meetings

When the QMT meets again, the chairperson will include on
the agenda Progress on initiating measurement. Each func-
tion head will report, in two minutes or less, their progress and
any problems, and the measurement champion will summarize
strengths and weaknesses and identify actions to be taken. If
any function heads are having problems, the champion will
work with them between meetings. The whole agenda item
on measurement should take 1520 minutes and will not arise
at every QMT meeting. Measurement will be discussed only
when it is in its high-profile phase in the quality plan.
The magic ingredient to keep the action moving forward
at QMT meetings is peer pressure. If you have implemented
measurement and another team member hasnt, both you and
your colleagues will want to know why this person is letting the
team down. It shouldnt be just the measurement team cham-
pion or chairperson who exerts this pressure. Well be looking
at teamwork skills in more detail in Chapter 16.
Summarizing this modus operandi for the QMT, you will:
Plan it as a team
Implement it in the department
Advance it as a team (see Figure 8.3)
The QMT meeting should be held monthly, although you may
have them every two weeks in the early stages of your quality
H1320 Merrill.indd 93 3/13/09 4:57:59 PM

QMT
Executive Problems or
summary projects for action
with resources
agreed
Feedback Utilize resources
Figure 8.3 QMT process.
process. They should be run in the same manner, and ideally at

the same time, as you run the financial review of the business.
There should be a review of the months activity, similar to the
review of measurement I described earlier. You identify any vari-
ations from the plan and make quick decisions on actions to deal
with the variances. The minutes of the meeting should list only
decisions and actions, along with the persons responsible.
If your management review takes more than an hour (two
to three hours if it is quarterly), chances are youre getting
into problem solving. Problem solving is not the responsibil-
ity of the QMT. Problems either relate to the operation of the
change process, in which case they are the responsibility of the
step champion, or relate to the business processes, in which
case they are the responsibility of the function head. Either of
these people may request help in dealing with a problem, but
the problem should be tackled outside the QMT meeting.
Time and again Ive seen management teams get sucked
into brainstorming a corrective action on late delivery or staff
shortage or paperwork difficulties. This is not the role of the
QMT. These problems should be tackled between meetings by
the people concerned.
As you see the role of the QMT unfold, you can see why it is
essential that the team contain the key players in the business unit
if you are going to effect change. Each of these key players must
H1320 Merrill.indd 94 3/13/09 4:57:59 PM

be a personal agent for change, and each of them must be totally

committed to the vision and values of the organization. The best
way to show this commitment is to watch each team member
(not just the chief executive) sign the policy statement of your
basic values and commitment to quality and the customer.
The other document I strongly recommend for this team
is a roles and responsibilities document (a team job descrip-
tion), which again is signed by each team member. This docu-
ment will look something like the example in Figure 8.4.
One agenda item I abhor is Any other business. This is
a license for anarchy and for throwing your meeting process
totally out of control. The chair should ask for any late agenda
items at the start of the meeting, and unless something unusual
QMT roles and responsibilities

(Norton EngineeringWindsor site)
1. To plan, implement, and monitor total quality management at the
Windsor site of Norton Engineering.
2. Chairperson (and Leadership Champion)Charles Pearson
Administrator (and Continuation Champion)Ada Minton
Process Ownership and Measurement ChampionWendel
Gilmore
Cost of Quality and Corrective Action ChampionMallory Knox
Education and Recognition ChampionRandall McMurphy
Communication and Teamwork ChampionFrank Booth
3. The team will meet on the first Tuesday of each month at 9:00 a.m.
in the company conference room. Meetings will last one hour.
4. The meeting agenda will be issued a minimum of three (3) days
before the meeting. Agenda items should be submitted a minimum
of five (5) days before the meeting.
5. Minutes will be issued within 48 hours of a meeting and will list
decisions from the meeting and subsequent actions, with persons
responsible.
Signed,
Figure 8.4 A team job description.
H1320 Merrill.indd 95 3/13/09 4:57:59 PM

has occurred, there shouldnt be any late items. In the event of

an exceptional item, the team should agree whether to extend
the meeting, hold over the item until the next meeting, or insert
the item in place of something else on the agenda.
You may have noticed in Figure 8.4 a person described as
the administrator. This person is responsible for the agenda and
minutes but is not a secretary or typist. This is the person next
to the president or chief executive who will be the prime advo-
cate of quality in the organization. The ISO 9000 standards call
for a management-appointed representative. In larger orga-
nizations, this may be the director or vice president of quality,
or the quality coordinator. Between meetings of the QMT, the
administrator must constantly be feeling the quality pulse of
the organization and must work closely with the leader of the
organization to assess the achievement of its quality objectives.
Dont make the mistake of choosing an administrator who has
no clout. If you make this mistake, the poor administrator will
get blamed for all your failures and will have no authority in
the eyes of the rest of the team.
SETTING THE STANDARD

Finally, the reminder, if you havent already guessed it. The QMT
will be the role model for quality practices in your organization.
The way you run your QMT will set the standard for all the other
teams and individuals in your organization. Well talk about
teamwork in Chapter 16, and well talk about leadership and role
modeling in the next chapter. The QMT is in the fishbowl. Start
on time, finish on time, stick to the agenda, and tell the rest of the
people about your meetings (dont just post the minutes).
Throughout this chapter, as weve talked about teamwork,
there has been an underlying implication of leadership. In
Chapter 9, well look at the issue of leadership and what our
personal role must be in leading the change to a quality and
customer-focused organization.
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BROWSERS BRIEFING
The management team is the primary agent for change

in the organization.
The management team must be clear in its role as a
change agent.
Quality must be managed, just as you manage your
finances.
The management team must build a detailed plan for
implementing change to a quality organization.
Each team member is responsible for implementing the
plan in their own area of the business.
The change management team should only try to imple-
ment change in an area of no more than 300 people.
The management team must include the key people
who lead the business unit.
The business leaders cannot immediately become
experts in all aspects of change management. Each
should specialize, or champion, one or two elements of
the change process, for example, measurement plus cost
of quality, or education, or teamwork plus recognition.
A specialist in, say, measurement would be available
for advice on an as-needed basis.
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H1320 Merrill.indd 98 3/13/09 4:57:59 PM
9
Leadership
Leadership
Process Education
ownership
Measurement Communication
Continuation
When the best leaders work is done, the people say, We did
this work ourselves.
Lao-Tzu
Y
ouve probably heard about the difference between
leadership involvement and leadership commitment.
Its a story about ham and eggs.
A hen and a pig lived on a farm with a farmer who was a very
caring person and looked after their every need. They decided
to thank the farmer for all of his care and attention. After some
discussion, they decided to cook him a meal, and they would
99
H1320 Merrill.indd 99 3/13/09 4:57:59 PM

each make their own special contribution. The farmers favorite

meal was breakfast, so they agreed to cook the farmer a meal
of ham and eggs. There was a short pause after they had finally
arrived at an agreement, and the pig looked a bit concerned.
The pig then said to the hen, Hey, you may be involved in this,
but me, Im committed!
The hen is involved; the pig is committed. The people
around you can see very quickly whether you are involved or
committed, and leadership can be an apparently thankless and
very demanding activity.
In the 1960s, Norman Maier did extensive research on team
success. He concluded, The primary determinant of a teams
success is the skill of the person leading it. Many centuries
before this, in a very different part of the world, Lao-Tzu con-
cluded, When the best leaders work is done, the people say,
We did this work ourselves.
If youre wondering why your team isnt succeeding, look
no further than yourself. However, if your team is successful,
you can expect them to take the credit. Im going to add a third
saying that is familiar to us all and that is the theme of this
chapter: Actions speak louder than words.
Unless you personally practice quality in all your day-to-
day activities, the employees will see right through you. People
notice your actions, not your wonderful words. You may be
making incredible, insightful strategic decisions and risking
your own skin for the future of the business, but very few peo-
ple will see this. Its your own day-to-day activities that impact
people around you far more than you realize. Its how you run
your meetings, conduct your interviews, and write your reports
that tell people whether deep down you really believe in the
basic principles of quality.
This all makes leadership sound like a very thankless task,
and yet were all faced with leading at some point in our lives.
The task doesnt always just fall to the company president. In
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Chapter Nine: Leadership 101
the world of quality improvement, people see the need for bet-
ter leadership and teamwork in order for the organization to run
smoothly. People also see repeated failure in quality improvement
due to poor teamwork, which is caused by poor leadership.
A leader has to get consensus on where the team is head-
ing. You must define the teams principal objective, whether it
is to win a football game or assemble televisions. In addition,
your objective in leading quality in your team will be to work
to continuously improve your processes. You then find you
are better positioned to deal with those customer requirements
that change in the future, because your team processes have
become leaner and more responsive. However, many teams go
wrong by not defining their objectives in a language the whole
team can understand, and in thinking that agreed upon objec-
tives are all the team needs. In this chapter I will focus on the
values that you and the team use to build your objectives for
the team and hence your picture, or vision, of where the team
is heading.
Leading a team requires something much deeper than
agreed upon objectives. The Malcolm Baldrige National Quality
Award criteria, for example, look for how the companys lead-
ership set vision and values, promote ethical behavior, create a
sustainable organization, and engage with the workforce.
TEAM VALUES
Every organization or team has to have a set of values or princi-
ples upon which everyone agrees. People can then start to agree
on how they will achieve the teams objectives. We discussed
values in Chapter 5, and its important for a team and its leader
to regularly reaffirm commitment to these basic values.
Have you and your team agreed on your definition of qual-
ity? This is your most basic value; quality is defined by the
customer, not by you. You will see later that this puts a big
H1320 Merrill.indd 101 3/13/09 4:57:59 PM

responsibility on the leader to talk with internal and external

customers and agree on customer requirements.
Having defined quality, how will you deliver it? Do you
and your team check everything before you send information
or materials to another department or another company? Is it
in your basic values that you will build prevention into your
business processes so that checking becomes unnecessary?
This is a deep-seated value that asks whether you are a forward
thinker or a firefighter. I remember when as chief executive of
a growing business, I was recruiting a lot of new staff. Peter
Robinson, the CEO of a related company, commented that I
should be careful not to recruit people who are good in a crisis.
Its surprising, he said, how the best firefighters are often
the arsonists. Ask yourself if you subconsciously allow crises
to develop just to make yourself look good.
The only way to deliver quality effectively is through pre-
vention, which means investing time in developing the skills of
your team, ensuring you have the right equipment, and ensur-
ing that all of your work processes have clear procedures. Pro-
cedures are usually the most neglected part of all.
Breaking agreed upon procedures causes more chaos and
wasted time in your team than you would ever realize, and yet
the team leader is usually more guilty of this than any team
member. Ask yourself if you are a role model or if you exert the
leaders privilege and flaunt the rules.
Finally, ask yourself if you and your team work together
to improve the service you give to the next department or the
outside customer, or do you complain that theres nothing
you can do about the problems being constantly dumped on
you. Do you continue to insist that the customer is always
changing their mind? When theres a problem, do you put
in a quick fix that you will come back to later? On the
other hand, do you hold the value that you will work continu-
ously to meet all customer requirements? Do you have the
H1320 Merrill.indd 102 3/13/09 4:57:59 PM

attitude that any nonconformance is unacceptable, and when

nonconformance does occur, do you take preventive action to
remove the root cause?
COMMUNICATING VALUES
Most leaders pride themselves on their communication skills,
and yet so often this is their downfall. Look at the basic model
in Figure 9.1. We communicate on three levels: verbally, visu-
ally, and with feelings. Most leaders think that their spoken
or written communication is what really matters, but the big
shock is that words, written or spoken, typically account for
only about one-sixth (15 to 20 percent) of our communica-
tion with others. Different cultures and individuals have dif-
ferent balances of these components as well. The British style
of communication is more verbal (they wrap everything in
words), whereas Americans are far more visual (a nation
raised on TV and movies).
Do you know the type of communication needed inside your
own team? Accountants may be verbal, designers visual, and
perhaps your salespeople communicate with feelings. Remem-
ber that actions speak louder than words, and that you will com-
municate your commitment to the quality values of your team
primarily by what you do and far less by what you say.
Visual
Sender Verbal Receiver
Feelings
Figure 9.1 Levels of communication.
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LEADERSHIP ACTIONS
What are the actions a good leader will take to communicate
these quality values? James Kouzes and Barry Posner have col-
lected data from thousands of leadership situations from all
types of organizations. They have identified five fundamental
practices successful leaders have in common:
Challenging the process
Inspiring a shared vision
Enabling others to act
Modeling the way
Encouraging the heart
Kouzes and Posner elaborate on these five fundamentals in an
excellent book, The Leadership Challenge (1995), now in its
second edition. These basics will, of course, apply to leader-
ship in the quality process.
At the top of the list is challenging the processin other
words, process improvement! As you will see, this becomes
the core activity of quality leadership, into which your other
leadership actions are built. Inspiring a shared vision is related
to the work on values we discussed in Chapter 5. You have to
create your objectives and build your vision by involving the
whole team. This leads to enabling others to act.
If your team has participated in building the objectives, then
they have ownership, but you must still give them the skills
they need, as well as the equipment. (Remember prevention?)
Kouzes and Posner (1995) include modeling the way as a
key practice of good leaders. Your participation is essential to the
success of the change process. Remember, actions speak louder
than words. This is where many leaders have a lot of difficulty.
Maintaining the balance between being a thinker and being a
doer is tough. Most of us manage one or the other, but not both.
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The challenging, the visioning, and the enabling were all

about thinking and talking, but now you are being asked to do
something! If you dont participate, your team will probably
say behind your back that you talk a good game, but . . . As
you read you will see the importance of applying participation
and modeling to your personal work processes as well as the
teams processes.
The last practice emphasized by Kouzes and Posner (1995)
is encouraging the heart. A leader succeeds by creating enthu-
siasm in the organization. Communicating your feelings for
the work is essential. Unless you believe in the values, vision,
and objectives of the team, you wont fool anyone. The more
deeply you believe in what the team is doing, the easier it is to
spread your enthusiasm to others.
Kouzes and Posner (1995) also researched the personal
characteristics that constituents look for and admire in lead-
ers. Since their research began, four qualities have consistently
topped the list:
Honest
Forward-looking
Inspiring
Competent
It is interesting to look at this list in light of U.S. presidential
election campaigns and to see how honesty, a forward vision,
enthusiasm, and competence play key roles in the strategies of
candidates.
President George W. Bush had the lowest ratings in history
due in part to perceived dishonesty over the Iraq War. Barack
Obama caught the publics attention through his vision of change.
Hillary Clinton, in seeking the Democratic nomination, projected
her experience and the results she had achieved. All candidates
showed amazing enthusiasm, which inspired their followers.
H1320 Merrill.indd 105 3/13/09 4:57:59 PM

Now think about these attributes for yourself. Also remem-

ber those points about communication. If your team is saying
that you only talk a good game, this strikes right at the heart of
the first requirement, honesty. Your actions are what tell people
whether you really believe what you are saying.
MEETINGS
The way you run your meetings has more impact on your teams
effectiveness than most leaders realize. Its the way you show
whether you really behave in accordance with your quality val-
ues. Who is the customer of the meeting process, the team leader
or the team membership? Do you practice prevention in setting up
your agenda, and do you continuously seek to improve the meet-
ing process by using quality techniques, such as measurement?
The meeting is the focus of the teams identity. You must
conform to customer requirements by not changing dates at the
last minute, and by starting and finishing at the agreed upon
times. Be preventive and issue the agenda at least three days
before the meeting. I used to have a chairman who resolutely
refused to bring an agenda when he visited my business. He
always insisted that we take it on the run. The result was that
the executive team wasted one day times seven people prepar-
ing material for what was their best guess on the agenda con-
tent. The chairman would arrive, usually late, the team would
arrive loaded with all the papers they thought were relevant,
and he would spend half the meeting deciding what to talk
about. Sound familiar? For your sake, I hope not.
THE TEAMS CORE ACTIVITY

If youre going to show quality leadership to your team, you and
the team have to start applying continuous improvement to the
processes that the team owns. Whether you are the sales team,
H1320 Merrill.indd 106 3/13/09 4:57:59 PM

the production team, or the design team, you need to identify

which processes are your teams responsibility and then work
through the continuous improvement cycle, both as a team and
as individuals.
Your first task in challenging the status quo of your team
is to define who does what. To everyones surprise, most pro-
cesses on a team do not have clear ownership, and when you
interface with other teams, you often find its not clear which
team is responsible for which process. Unowned processes are
one of the major causes of wasted time and materials for your
team, and the team will thank you profoundly for helping sort
this out inside your team or between you and other teams. Pro-
cess ownership is discussed in detail in Chapter 10. Applying
the technique inside your team will establish clear leadership.
When you start to address your own work processes and
eliminate your own wasted time and the wasted time of peo-
ple around you, you will start to convince people you are seri-
ous about quality, and they will start to work on quality in the
same way.
Build a flowchart for your own work processes and see
which of the handoffs gives you the biggest problem or wastes
the most time. This is discussed in more detail in Chapter 10.
Nonconforming requirements provide the team leader with
a real opportunity to participate in the improvement process by
using measurement and showing that actions do speak louder
than words. One of the most common causes of failure in mea-
surement is that leaders dont participate.
MEASUREMENT
Most leaders say that their own processes dont repeat often
enough to make measurement meaningful. Sherritt Gordon,
a precious metals company in Alberta, had this problem
in choosing measurements. The vice president of quality,
H1320 Merrill.indd 107 3/13/09 4:57:59 PM

Dennis Maschmeyer, did a process analysis, and the execu-

tives started measuring items such as:
Changes to meeting dates
Late starts to meetings
Changes in the business plan
Problem-solving meetings due to unclear requirements
Problem-solving visits to customers
None of these items are very complex, but all have a major
impact on the achievement of quality for the organization. Most
importantly, they show leaders participating in the critical pro-
cess of measurement.
I remember Bob Bayette, the quality manager of ICI Paints,
telling me that the management team identified the process of
its team meeting (and for that matter the whole company meet-
ing process) as the greatest opportunity for improvement. Six
months later, Bob said they no longer had people arriving at
the meeting saying, Whats this meeting about? The team
had measured the phenomenal amount of time people saved by
controlling this process. Ill talk more about meetings in Chap-
ter 16 and review the components that ICI worked on.
Figure 9.2 is a good example of a measurement check sheet
you can use. Keep it where you will be able to record noncon-
formances as they happen, whether that means by the phone,
on your PC, on the wall, or as a three-by-five-inch card in your
pocket. Most importantly, let your team know youre doing it and
have the courage to share your results. (Remember honesty.)
Most leaders dont know how they spend their time and
what their key tasks (key processes) are. Until you know these
two things, you dont know where to focus your own efforts for
improving quality. Using the time log in Figure 9.3, go back
through your day planner for the last 100 days. (If you dont
keep a day planner, how do you expect other people to know
how long it takes to do a job?)
H1320 Merrill.indd 108 3/13/09 4:57:59 PM

Problem check sheet

Monday Tuesday Wednesday Thursday Friday
Late to | ||
meetings
Reschedule | |
meetings
Lost |||
documents
Complaint | |
visit
Computer
down
Figure 9.2 A simple check sheet for tracking problem occurrences.
Time use
Hours/ Hours/ % of
Key tasks week month time
1.
2.
3.
4.
5.
6.
7.
Figure 9.3 A log for analyzing time use.
Collect the seven major categories into which your time

usage falls: internal meetings, customer meetings, product
development, paperwork, customer phone calls, and so on. Any
category beyond seven will account for less than 5 percent of
your time, and your time usage is not significant (that doesnt
mean the process is not significant). The results may be surpris-
ing. If one of your significant processes accounts for less than
5 percent of your time, ask yourself if you have a problem.
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Even if the results are what you expected, take the next step
and chart the information requested in Figure 9.4. Who are the
people you interact with? What do you do when you interact
with them? What are your key activities? This is not easy, I
know. Youll say that it changes every day and every week and
every month. Until you can define these activities, however,
Process Output Delivered to

(what we do) (what we produce (who we give our
or deliver) outputs to)
1.
2.
3.
4.
5.
6.
Figure 9.4 A form for surveying internal customers and suppliers.
H1320 Merrill.indd 110 3/13/09 4:57:59 PM

you are not in control. You may start in the left column, the
middle column, or the right column; it doesnt matter.
When you finally get your list, compare it with the list in
the Figure 9.3 time log. Are you devoting the right amount of
time to the right process? Remember that a third of your time
is wasted firefighting or reprocessing information. Which of
your time-wasting activities are you going to attack to cut out
this waste? You can use the approach described in Chapters 10
and 11 to show your own commitment or involvement in the
quality improvement process.
Getting the team involved in measurement is the next step,
and some of the members may be nervous, thinking that youll
be checking out their shortcomings. Try measuring a process
owned by all of the team to start with. I recall working with a
sales office on identifying the five items that caused its biggest
problem. They made up a white board for the office wall that
looked like the check sheet in Figure 9.2.
Measurement of your own processes is the visual and prac-
tical way of showing an example to your team. If you do mean-
ingful measurement on your personal work processes, they will
follow your example.
HOW CAN I SHOW QUALITY

LEADERSHIP TO MY TEAM?
What Im talking about here is good old-fashioned self-improve-
ment. Like it or not, you are a role model for the people around
you. Whether you are 25, 35, or 65, if you are committed to qual-
ity, you will be working to improve your own work processes,
and youll be both measuring and displaying improvements to
encourage people around you to also work on improvements.
At the outset, your team has to have a clear objective, or
what some would call a mission. The team has to agree on its
basic values (call them house rules) to achieve that objective.
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Using these values or principles, the team can then build a series
of smaller objectives and develop its own vision of the larger
objective.
All of this is think and talk, and it is vital foundation
work. However, too many leaders in business stay locked in
this phase. You communicate your true commitment to your
teams objective of improving quality only when you yourself
are working to improve quality. You have to participate in the
analysis of your team process, be it selling, manufacturing, or
data processing. Delegation does not work. You have to work
on your own part of the team process, doing your own mean-
ingful measurement.
You must have a clear idea of how you are going to spend
or invest this time you are going to save; otherwise, youll see
no value in saving it. Will it be that exciting new product youve
wanted to work on but never had the time? Will it be that mar-
ket sector youve wanted to attack but never got around to it?
Maybe its a new filing system that will be your next improve-
ment project?
In the chapters ahead, you will see how you can work on
improvement of both processes and people for yourself and
your organization. Use the following action list to get started in
showing your personal commitment to improvement.
1. Analyze your time use
2. List your most important processes
3. Identify transactions where time is wasted
4. Flowchart your work processes
5. Ask your internal customers what they have difficulty
getting done
6. Ask your internal suppliers what they have difficulty
getting done
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7. Select a process you intend to improve

8. Tell everyone what you intend to improve
9. Tell yourself where you will spend the time you save
10. Doit!
11. Measure your savings
12. Move on to your next improvement project
BROWSERS BRIEFING
The primary determinant of a teams success is the skill

of the person leading the team.
When the best leaders work is done, the people say,
We did this work ourselves.
People will do what you do, and not what you say.
Leadership creates and sustains quality values.
The leaders first task is to get the team to agree on its
quality values and objectives.
The leader communicates commitment to values
through actions, not words.
Successful leaders:
Challenge the process.
Inspire a vision.
Enable others to act.
Model the way.
Encourage the heart.
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Followers look for leaders who are:

Honest.
Forward-looking.
Inspiring.
Competent.
Well-run meetings are one of the best gifts to give your
team.
Create an environment of continuous improvement for
your team.
Show your leadership example by personally conduct-
ing activities such as measurement.
Remember, you are a role model, both in your good
practices and your bad ones.
REFERENCE
Kouzes, James M., and Barry Z. Posner. 1995. The Leadership Chal-
lenge: How to Get Extraordinary Things Done in Organizations.
2nd edition. San Francisco: Jossey-Bass.
H1320 Merrill.indd 114 3/13/09 4:58:00 PM

PART IV
The Processes
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H1320 Merrill.indd 116 3/13/09 4:58:00 PM
10
Process Ownership
Leadership
Process Education
ownership
Continuation
Everybody blamed Somebody when Nobody did what Anybody

could have done.
Anon
S
carborough, Ontario, was hit harder than most by the
recession of the early 1990s. The Human Resources
Canada office in Scarborough handles a stress level that
few organizations could deal with. Can you imagine working
in your own company office with all of your own customers
walking alongside you in the office corridor, and most of them
are angry or upset because they have lost their job?
117
H1320 Merrill.indd 117 3/13/09 4:58:00 PM

118 Part Four: The Processes
Against this background, Sondra Sullivan started her team on

what was once fashionably called business reengineering. Then
they called it process management and still do now. They used
tools like process mapping and measurement to reduce the cycle
time of desperately needed services to their clients. The approach
was not complicated. They cataloged the business processes and
the departmental processes, and then mapped these processes to
show a process flow. The process owners in that organization
identified who their internal customers and suppliers were, and
invested time and effort in finding the requirements of their cus-
tomers. This enabled them to focus on the requirements where
problems exist and then work on eliminating those problems.
Youve probably heard this famous saying, copied around
offices worldwide:
There was an important job to be done, and Everybody

was asked to do it. Everybody was sure Somebody would
do it. Anybody could have done it, but Nobody did it.
Somebody got angry about that because it was Every-
bodys job. Everybody thought Anybody could do it but
Nobody realized that Everybody wouldnt do it. It ended
up that Everybody blamed Somebody when Nobody did
what Anybody could have done.
Process ownership ensures that all people in the organization

understand which processes are their responsibility, along with
who their customers and suppliers are.
BUILDING THE FOUNDATION

While many parts of quality are badly executed, I find process
ownership to be the most overlooked. This is the tough and unex-
citing foundation work. I think again of building the extension
to Hope Cottage, which I described in Chapter 3. What kept me
going was the vision created by the plans and drawings. I thought
H1320 Merrill.indd 118 3/13/09 4:58:00 PM

Chapter Ten: Process Ownership 119
about the new room and how it would be decorated. I thought of

the new view out toward the village church. I thought about the
extra space my family would have to enjoy life together. As I
worked, up to my knees in mud and clay, that vision kept me
going. When you work on process ownership, you need to keep
a clear vision of your company. You must maintain a clear vision
for everyone, because process ownership work is not always
exciting. But like the foundation of the house you live in, it is
critical for supporting the rest of your work in quality.
Why is process ownership so important? Over half of the
processes in your organization do not have clear ownership;
without clear ownership, you dont have internal customers and
suppliers talking to each other. If your customers and suppli-
ers are not talking to each other, then they are not agreeing on
requirements; and without agreed upon requirements, you can-
not deliver quality.
Now here is the good news. Establishing process ownership
gives you that very important early win on your quality journey.
I talked about this at the end of Chapter 7, The Change Process.
Simply laying out the flow of your organization helps you find
where process linkages are weak and promotes excellent discus-
sion among the people involved. The focus this creates enables
you to move on to tackle those process areas that need the most
attention. In some ways the map itself is less important than the
fighting and biting that go into creating the map.
PASSING THE BUCK

The most common (and most disruptive) example of lack of
process ownership that I used to encounter was an organiza-
tions photocopier. It was amazing the number of times I saw
the office staff nod and the presidents blush when I said this.
In many companies, no one is responsible for ensuring that
the office equipment gets serviced, that the customers get what
they require, or that the machine is capable of meeting those
H1320 Merrill.indd 119 3/13/09 4:58:00 PM

requirements. You might reply, We have a service engineer

we pay to do that. Not so: The engineer is an input to the
processnot the process owner.
ESTABLISHING OWNERSHIP
WITH PROCESS MAPPING
Establishing process ownership follows this sequence:
1. Identify internal customer and supplier functions
2. Analyze time use
3. Map the flow of business
4. Establish ownership of unowned processes
5. Agree on customer requirements
6. Identify requirements not met
7. Pinpoint communication flaws
I begin process ownership at the business unit level with an activ-
ity called process mapping. Each function head has to identify
the functions of internal customers and suppliers. I also get these
people to analyze their time use over the previous 100 days. Then
I ask the questions, Who are the people with whom you have
the most important transactions? and Are you giving the right
amount of time to the most critical processes? This technique
was described in Chapter 9 (see Figure 9.4); it applies first at the
business level and then at the department and work team levels.
Go to 15 or 20 processes if you need to, and then compare
your list with the time use log you completed in Chapter 9.
Are you giving the right amount of time to the most critical
processes? Who are the people with whom you have your most
important transactions?
The next step is to map the flow of the business. You need to
do this at the business level and keep it simple. An example of
process flow at the business level is shown later, in Figure 10.2.
H1320 Merrill.indd 120 3/13/09 4:58:00 PM

You can apply it to almost any manufacturing or service busi-

ness. The emphasis will differ from business to business, and
you will change some of the names, but use it as a guide to map
the flow of your own business, and take some time to identify
who owns which processes at the business level.
Once you have established ownership of your unowned
processes, the new owners can then identify their customers
and suppliers and start agreeing on requirements. The team
leader should both lead and participate in this activity, and the
end product will be a series of requirements that are not being
met by the team.
A LESSON LEARNED
I see a lot of process mapping; most of it is way too complex
and, quite frankly, terrible. I learned my lesson on this many
years ago. That lesson was simplicity.
My boss in the Courtaulds Department of Chemical Engi-
neering, Bruce Townsend, was appointed managing director
of a company called Ashton Brothers, which Courtaulds had
acquired. I was just three years out of University and he asked
me if I would be his personal assistant. I was so excited. I
remember my friends at the time saying, Wow, Peter, youve
made it! That was the good news.
Now the bad news. This was a textiles company, and at that
time I knew nothing about textiles. However, there was one skill I
did have: process flowcharting. The company we had acquired was
a mess, and nobody knew what was going on. If you are a ham-
mer, everything in the world looks like a nail. If you are a chemi-
cal engineer, everything in the world looks like a flowchart.
I flowcharted Ashton Brothers, I interviewed all the managers
and supervisors, and I captured every transaction in a flowchart.
I was so proud. At the end of two weeks, I presented the chart on
an engineering drawing (size A1 paper 32 inches 23 inches)
to my boss. There must have been over two hundred boxes and
H1320 Merrill.indd 121 3/13/09 4:58:00 PM

over a thousand lines on this chart. It looked like a plate of

spaghetti!
Bruce looked at me and said, So, what is this telling me,
Peter? I realized it was telling him nothing. The chart was way
too complex. The lesson: Keep it simple. Years later, these are
the golden rules when I lead a process mapping session:
1. I do not do the mapping myself
2. I teach the skill of mapping to the people who are
involved in the process
3. We use paper and Post-it notes, not a computer screen
4. We use the swim lane technique
5. We confine the map to between 20 and 30 steps
THE MAPPING METHODOLOGY

I start a mapping session by walking a group through the prin-
ciples of process management: (1) a process is driven by the
customer, (2) processes need clear ownership, (3) the best way
to operate a process is by preventing problems rather than cor-
recting them.
I then take the group through a short exercise that maps the
process of having a meal in a restaurant. They work in groups
of three or four, and I insist they choose a real restaurant. This
way the training is practical and not theoretical.
The instructions I give each group are shown in Figure 10.1.
They approach it using the swim lane method of mapping. The
advantage of this method is that it creates a flow across the map-
ping paper from left to right, and each process lines up with the
person responsible. The advantage of using mapping paper (I use
banner paper from an office supply store) and Post-it notes is that
any person on the mapping team can reposition a note; you dont
have one person controlling the mapping at the keyboard. Each
group develops its map, and then we discuss the lessons learned.
H1320 Merrill.indd 122 3/13/09 4:58:00 PM

s)DENTIFYTHEPARTICIPANTSINVOLVEDINTHE
PROCESSWRITETHEIRNAMESON0OST IT CUSTOMER
NOTESANDARRANGETHENOTESIN AVERTICAL
COLUMNWITHTHECUSTOMERATTHETOPOF
THECOLUMN
s4HENIDENTIFYTHECUSTOMERACTIONTHAT
INITITATES THEPROCESSWRITEITONA0OST IT INITIATINGACTION
NOTEANDPLACEITNEXTTOTHECUSTOMER
0OST ITNOTE
s.EXTIDENTIFYWHOTHECUSTOMERINTERACTS
WITHANDWHATACTIVITYTHEYPERFORM.
7RITETHISACTIVITYONA0OST ITNOTEAND
PLACEITTOTHERIGHTOFTHECUSTOMERINPUT ACTIVITY
ONTHESAMEROWASTHEPARTICIPANT PERFORMEDBYPERSONWHO
PERFORMINGTHEACTIVITY CUSTOMERINTERFACESWITH
s)DENTIFYWHORECEIVESTHEOUTPUTOFTHIS
ACTIVITYANDTHEACTIVITIESPERFORMED
s#ONTINUETOCREATE0OST ITNOTESAND
POSITIONTHEMINTHESAMEMANNERUNTIL
THEPROCESSISCOMPLETEIETHECUSTOMER
RECEIVESTHEFINALPROCESSOUTPUT
s#OMPILEALISTOFLESSONSLEARNEDFROMTHE
,ESSONSLEARNED
EXERCISEINCLUDINGTHENUMBEROFMOMENTS s
OFTRUTHPARTICIPANTSANDSTEPS ANDCHOOSE s
ASPOKESPERSONTOPRESENTTHEPROCESSMAP s
ANDFINDINGS
s
Figure 10.1 Instructions for process mapping.
H1320 Merrill.indd 123 3/13/09 4:58:00 PM

Typical lessons learned are that the process has more steps
than at first realized, you dont try to map a process you dont
know, and it is important not to go into too much detail but
rather concentrate on the flow of the process.
Once the group has acquired the skill of mapping, it moves
on to create its own business process map. Figure 10.2 is an
example of a map for an insurance company.
Process
owner
Requests
Customer
service
Under- Agree
writer Requirements
Operations Designs & Pilots

manager specifies test
Operations Selects
Plans
planner sub-
survey
contractor
Prepares Assembles Prepares

Consultant
survey survey report
Delivers
report
etc.
Figure 10.2 Business level process map.
H1320 Merrill.indd 124 3/13/09 4:58:00 PM

The mapping activity releases enormous quantities of

knowledge from the participants. They focus immediately on
the areas of the business that need attention, and they identify
the primary risk points in the business. From the map the group
is then able to build its measurement plan, which we will talk
about in Chapter 11.
You will notice I deliberately showed you a process map for
an intangible product in Figure 10.2, the map from the insur-
ance company. But as the next section explains, product can be
both tangible and intangible.
THE PRODUCT PROBLEM

The output of a process is, of course, its product. Some organi-
zations that deliver service and knowledge often struggle with
this concept. However, you will often hear financial institutions
talk about their products. What we tend to overlook is that in
addition to being tangible, products can be intangible when you
look at informational, and even emotional, products. In the last
decade weve started to understand intellectual property far
more, and the principles of quality apply just the same way (see
Figure 10.3). Every organization sits on a value chain. Either
Tangible
Distribution
Manufacturing
(wholesale, retail,
transport)
Create Deliver
Knowledge Information providers

organizations (phone, Web sites,
(law, accounting, design) banks)
Intangible
Figure 10.3 Tangible and intangible product.
H1320 Merrill.indd 125 3/13/09 4:58:00 PM

it creates product or somewhere down the chain it delivers the

product to the person who uses it. In manufacturing youre cre-
ating a tangible product.
Distribution puts the tangible product in the hands of the
customer. Below the line is the intangible arena. Organiza-
tions that create knowledge have traditionally been law firms,
accounting firms, and designers. But we have started to see a
huge growth in the creation and delivery of intangible prod-
ucts: phone companies with information transferred verbally,
and the World Wide Web with information transferred electron-
ically. Banks are an example of an organization that stores and
delivers an intangible productmoney doesnt really exist.
Once we have the map, we can go on to the next step.
SURVEYING THE INTERNAL CUSTOMER

Each person in the organization needs to seek out their internal
customer and find out the following:
Where do we not know your requirements?
How do I cause you to waste time?
When do I dump problems on you?
When do I cause you hassles?
As soon as you read these questions, youll see why company
culture determines the success or failure of this activity. Are
people going to be open and free in their answers, or will they
be abusive and defensive? I usually give an organization about a
week to do this, and then I ask, Which of your internal suppliers
(upstream processes) didnt approach you over the last week, but
you wished they had because they are causing you problems?
I tell everyone to seek out those suppliers. This way, each per-
son in the organization will have identified the main people they
interact with, along with main ideas to work on and improve.
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The work so far has been revealing, interactive, and fun.

The next part is the boring, tough foundation work I warned
you about.
MAPPING THE REST OF THE BUSINESS

In the months ahead, the people in the business will need to
agree on requirements between their internal customers and
suppliers. Each person should have a shopping list of people to
talk to. A form like the one in Figure 9.4 can be used to guide
their discussions.
Department managers should guide their staff through these
months of interaction. Each department should build its own pro-
cess map and identify transactions that are weak or waste time.
While this activity may not seem spectacular, youll make major
strides as you agree on each set of requirements. Youll also see
great opportunities to eliminate unnecessary or repetitive tasks
and reduce the cycle time from customer order to customer deliv-
ery. One of the maps Human Resources Canada produced in its
journey to reduce service cycle time is shown in Figure 10.4.
As you map your department or business, you will start
to see why communication is such a problem in your organi-
zation. You must ask yourself why all this communication is
necessary. When the business was just one entrepreneur, no
communication was needed. As the business grew, though,
new people were added, and the business process was split into
departments. Many of these splits were done without recogniz-
ing the amount of extra communication that would result.
As you look at your process map and see large amounts of
back-and-forth communication between two process owners,
you must ask the following questions: Is this an area where
one person could own both processes? Should we teach Person
A the skills of Person B and develop a self-contained process
with one owner?
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H1320 Merrill.indd 128
Process
owner
Date stamp
Mailroom/ letter and give
FES to claims
prep
Determine if Register DCS
Claims appeal and Pass file
and attach
prep daily match to SIS
flowsheet
letters to file
Service unit Log in the Assign

appeal to Monitor log
supervisor unit appeal

(SIS) log book Agent II for book daily
processing
After
Decide if Give file to IA hearing
valid appeal; Proofread Review decision
Agent II and note
correct and sign and action
same in
submission submission if necessary
log book
Return empty Review decision

Insurance if error Monitor if correct docket to claims
advisor appeal and action
prep and clear if necessary
DCS
Schedule
Clerk of appeal and
the board give to clerk
for typing
Photocopy Match to empty

Clerk Type Return to Photocopy submission Type decision decision and
typist submission Agent II cases and dispatch same day docket and return
dispatch
copies to all parties file to SIS
to appellant
Figure 10.4 An internal process map (Human Resources Canada).
3/13/09 4:58:00 PM
A good example of this occurring in recent years is where

managers have developed the keyboard skills of a typist, and
the typist has become an administration manager, bringing
under control the information retrieval systems in the office.
The excessive communication between manager and typist has
been eliminated, while at the same time, office information
management has been strengthened.
The process mapping tool is used to establish process own-
ership and take you through the following stages:
1. Establishing process ownership
2. Identifying internal customers and suppliers
3. Agreeing on customer requirements
4. Focusing on requirements where nonconformance
occurs
Nonconformance means that we have failed to conform to the
requirements of our customer. Focusing on nonconformance
requires us to use the tool of measurement, discussed in Chap-
ter 11.
BROWSERS BRIEFING
Process ownership ensures all people in the organiza-

tion understand which processes are their responsibility
and who their customers and suppliers are. This was
the most overlooked part of quality in the 1980s.
A strong vision of the future will keep you going dur-
ing this tough foundation work.
Mapping the business is followed by mapping the
department, then mapping individual processes.
H1320 Merrill.indd 129 3/13/09 4:58:01 PM

The unowned processes need to be assigned owners;

then people can start agreeing on requirements.
Identify stages in the process flow where excessive
communication occurs.
Identify backtracking.
Eliminate processes that do not add value.
Reduce cycle time.
Using measurement, focus on process output require-
ments that are not being met.
H1320 Merrill.indd 130 3/13/09 4:58:01 PM

11
Measurement
Leadership
Process Education
ownership
Continuation
In God we trust, everyone else brings data.
W. Edwards Deming
S
ome years ago, I was attending a seminar conducted by a
good friend of mine, Bart DiLiddo. Bart was previously
the CEO of BF Goodrich, the tire manufacturer, and was
addressing a group of chief executives. In the Q&A session at
the end, one CEO asked Bart to define the most important fac-
tor that made BF Goodrich successful in implementing quality.
Barts answer was unequivocal: Meaningful measurement.
131
H1320 Merrill.indd 131 3/13/09 4:58:01 PM

There are three common failings in measurement:

1. People try to measure something that is unimportant or
that they cant influence
2. Measurement is made too technical or complex
3. The leaders in the organization dont participate in
measurement
This is why going through the process ownership groundwork
is so critical. It makes team leaders take ownership of the pro-
cesses they want to improve.
PLANNING MEASUREMENT
For measurement to be meaningful, you must measure where it
matters. The process mapping I described in Chapter 10 enables
you to identify the primary risk points in your organization.
These are points where there is failure or potential failure. You
list your primary risk points by process, set down what your
objective is for each process, and then build a matrix like the
one shown in Figure 11.1.
I have shown only one simple objective for each process,
but there may be several. Also, this is an abbreviated version of
a plan; the full plan should include key resources required and
key issues to be addressed.
MEASUREMENT STEPS
There are five steps, or stages, to measurement:
1. Identify incidents of nonconformance
2. Record incidents of nonconformance (on a check sheet)
3. Chart incidents of nonconformance (on a graph)
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Chapter Eleven: Measurement 133
Business Primary objective Performance

process Owner (example) measures (example)
Order Sales Complete and # of requirements
input manager accurate requirements revisited after order
input
Design Design On time, to spec # of projects behind
manager schedule
Test Design No failures # of design changes
manager
Plan Materials Issued on time and # of changes to plan
manager accurate after issuing
Purchase Materials Receipt on time, to # of late or
manager spec incomplete deliveries
Prepare Materials All components # of stoppages
manager available
Assemble Operations Manufacture to spec # of reworked
manager product
Package Operations No damages # of damages
manager
Deliver Dispatch On time and complete # of incomplete
manager shipments
Figure 11.1 Measurement plan.
4. Analyze the information that is charted or recorded (to

find the cause of nonconformance)
5. Take action to eliminate the cause of nonconformance
The charting step (3) is not always necessary, but all the other
steps are. And yet most people think they are doing measure-
ment when they are merely doing this one stage of charting.
I mentioned that a common misunderstanding about mea-
surement is the belief that it is important only when it is com-
plex or scientific. I cannot stress enough the importance of the
KISS principle: Keep it supremely simple, as the British say.
The way to keep it simple is by placing step 1, the counting
of incidents, and step 2, the recording of incidents, at the front
H1320 Merrill.indd 133 3/13/09 4:58:01 PM

of your mind, without devoting any time to them. The record-

ing step should not require any calculations as you collect data,
but it should make you ask what caused this nonconformance,
and then cause you to want to change your work process and
behavior pattern. Modern software systems make this captur-
ing of events far easier than it was ten or twenty years ago.
CHANGING BEHAVIOR
You probably use measurement all the time to control your
household budget, and yet you havent got the time to use mea-
surement in your working life?
Have you ever had a shocking phone bill? You analyze
which long distance calls are the problem and then change the
time when you make a call. You start recording each call you
make, and in no time your phone bill is under control. As you
write down (or record) each incident (phone call), it causes a
small change in your behavior. You cut out the mindless chit-
chat and stop the peak-time phone calls.
Keep it supremely simple (KISS) and ensure that measure-
ment does not consume your productive work time. The benefit of
measurement is that recording nonconformance makes you think
about what causes the problem in your process. Youll be amazed
at how you come up with ways of eliminating that problem.
Have you ever tried dieting? A few years ago I had to go on
a low-cholesterol diet. Every three months I would go back to
the doctor; sometimes Id have done OK, and other times my
blood count showed no improvement. The measurement was
really too far down the process chain to effect any improve-
ment. I needed to measure at the source of the problem.
One weekend my wife asked me if Id tried writing down
what I ate for each meal. It sounded like a good idea, so I drew
up a chart. I started Monday morning: For breakfast I wrote
in orange juice and cereal, lunch was chicken salad, and din-
ner was grilled fish. On Tuesday morning I wrote in orange
H1320 Merrill.indd 134 3/13/09 4:58:01 PM

juice and cereal again (sounds really exciting, doesnt it!). By

Tuesday lunchtime I was getting a little bored as I again wrote
in chicken salad, but I stuck to my guns as I ate grilled fish for
dinner and duly wrote it in on my chart.
Tuesday evening we went for a stroll in town. We came
upon an ice cream stand, and without thinking I stopped and
bought my favorite: butter pecan with chocolate sauce. When
we returned home and walked into the kitchen, I saw my diet
record and stopped short. I suddenly realized what ice cream
with chocolate sauce was going to look like on my low-fat diet
record. That entry stared at me all week and made me think
much more carefully about what I ate the rest of the week.
Recording our actions is one of the most powerful ways
of changing our behavior. This is what measurement is really
about. Measurement has to be conducted by the process owner
(the person who owns the problem). Youll be surprised at how
initially you measure the consequences of your problem and
then later switch to measuring the causes.
CREATING MEASUREMENT PARTNERSHIPS

The most common mistake I find in measurement is that peo-
ple try to measure something they cant personally influence.
Cadet Uniform Services found this problem in the early stages
of measurement. It did an outstanding job in laying the foun-
dations of quality, but found it difficult to initiate measure-
ment. A good example of the problem was at the receiving
bay. The customer would drop off the uniforms for cleaning,
and then the customer service driver would deliver the uni-
forms to the bay. Frequently, information from the customer
was missing, which caused great problems in the processing
of uniforms.
The staff on the loading bay started measuring how fre-
quently information was missing, and they soon became frus-
trated. The problems continued the same as ever.
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The people who suffer from a problem are often best placed
to collect measurement data, but only the people who own the
process where the problem initiates are in a position to correct
the problem.
Cadet saw this and formed partnerships of internal custom-
ers and suppliers. The receiving bay would keep a check sheet
for recording incidents when information was omitted, and this
record would pass to the customer service driver, who charted
these incidents and started to identify the causes of the problem
and apply corrections.
USING MEASUREMENT TOOLS

A measurement check sheet is the most basic measurement
tool, but it can have many different formats. What matters is
that you keep it close by and that you use it.
After tallying on a check sheet, the next step is information
display, or graphing. This makes the information pictorial so you
can see trends. The method I favor is the bar chart, which com-
bines the check sheet and the graph (see Figure 11.2). If it is a
hard copy, you can keep it inside a wipe-clean cover and just
transfer the data collected on the right side over to the left at the
end of each month. This is something you should display as you
use it. If it is on your computer, keep it on your desktop display.
J F M A M J J A S O N D 1 2 3 4 5
Figure 11.2 A check sheet and graph on one simple form.
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TEAMWORK IN MEASUREMENT
One of the most outstanding examples of the power of measure-
ment I have encountered came from a small town in the prairies.
Brian Eamer, the manager of a meat processing plant in Moose
Jaw, Saskatchewan, attended one of my seminars. The plant he
ran was far from a high-tech environment, and it had been expe-
riencing severe delays. He left the seminar keen on finding out
if measurement really worked. I happened to meet Brian again
about three months later, and I only wish I could give you a frac-
tion of his excitement as he told me what had happened.
He had discussed the plant problem with the operators, and
they had identified four main causes. To identify the most fre-
quent problem, they started data collection on a simple check
board at the side of the line. Each time the line had to be stopped,
one of the operators would simply mark down in the appropri-
ate column for that type of stoppage how many minutes were
lost. They soon discovered the biggest cause of line stoppages
was incorrectly trimmed animal carcasses. Brian was going
to talk to his supplier, but first he calculated the true cost of
waste for the stoppages. (Well talk about this in Chapter 12.)
He explained the calculation to his supplier, who immediately
understood the tens of thousands of dollars worth of waste.
The supplier took quick action, and stoppages were reduced by
over 80 percent.
Success didnt stop there. The plant operators, seeing the
improvement on the line, focused on other areas of improve-
ment, including general housekeeping. Within a short period,
there was a major leap in the plants profitability. There was
also a major improvement in the morale of all staff, as they saw
their ability to influence results.
Too often, measurement is thought to be the province of the
technical or financial people. The key to success is to lead from
the top of your company and keep it simple. Brian was able to
H1320 Merrill.indd 137 3/13/09 4:58:01 PM

communicate the effect of nonconformance to his supplier in a

language the supplier understood.
Keep it supremely simple (KISS)
Must not be time consuming
Should make you think about the process
Should make you think about prevention
Team measurement is often a good way of educating people
in measurement or getting people past the initial fear of mea-
surement. The fear aspect arises frequently in the early stages
because people fear that measurement data will be checked by
their boss and used to criticize their performance.
MONITORING AND MEASUREMENT

There are probably some points in your process flow where you
simply want to monitor the process to ensure that it is operat-
ing within certain limits. This is like feeling the pulse of the
process. You dont collect data; you just set an upper and lower
limit on the process and then set an alarm to alert you if you have
exceeded those limits. You would do this where a process is in
control but the impact of process failure is significant. You can
use IT systems quite easily to do thiscompared to a decade ago,
when monitoring relied on a person keeping an eye on things.
This is common practice in financial monitoring, where we
set limits on the value of a purchase or a particular level of
authority in an organization.
USING STATISTICAL PROCESS CONTROL

Statistical process control (SPC) is the tool that has caused more
fear and agony than just about any other in the field of quality.
SPC charts and the techniques of SPC are usually imposed on
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an organization far too soon. You should first establish a culture

of measurement, get total participation in simple measurement,
and achieve results from your simple measurement before mov-
ing on to SPC. People should graduate to SPC after achieving
results using the methods discussed earlier.
SPC, design of experiments, and failure modes and effects
analyses are all very worthy tools of quality, but when intro-
duced too early, they just reinforce the message that quality is
the province of the quality or technical department.
We all use SPC even though were not conscious of it. An
example of where you use it is on your drive to work. When
you first started working at your present location, you probably
timed your commute for the first couple of weeks to get a sense
of the typical travel time. You might have found the trip took a
half hour, plus or minus five minutes depending on traffic con-
ditions. You discovered that if you left home before 7:55, you
would normally arrive at work between 8:20 and 8:30, always
achieving your start time of 8:30. If you plotted this pattern on
a control chart, it would look something like Figure 11.3.
In SPC terms, your upper control limit ([UCL], the earliest
time you arrive) is 8:20, and the lower control limit ([LCL], the
latest time you arrive) is 8:30. The plus or minus five minutes
is the natural variation of the process.
As you plot the points on the graph, one point suddenly
appears below the LCL. Its the first week in January, and you
arrive at 8:45. Why did this happen? You guessed ita snow-
storm, or in SPC terms, a special cause. In SPC you learn
8:20
8:25
8:30
Figure 11.3 An SPC chart.
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from special causes, and in real life you learn from the snow-
storm, which is a special cause. You check the weather forecasts
throughout January and February so that you can leave for work
in sufficient time to beat the effects of the storm.
SIX SIGMA
I cant leave this chapter on measurement without addressing
Six Sigma. Here I discuss Six Sigma as a measurement concept,
but in Chapter 23 I talk about Six Sigma as a label for quality
management. Let me first explain the concept of Six Sigma.
Any activity produces variation in its outcome, whether its
the time it takes to travel to work in the morning or the consump-
tion of the gasoline we use on that journey. If we record the time
it takes each day or measure the amount of gasoline we consume
each day, we would find what is called a normal distribution.
If the normal time it takes for the journey is twenty minutes,
the majority of our recorded times would be at the 20 mark. We
would then find slightly fewer times recorded at both 19 minutes
and 21 minutes, but they would be about the same in number
and fewer still recorded at 18 minutes and 22 minutes. If you
recorded this time over a period of, say, a year so that you had
what is called a meaningful body of data (250 journeys), you
would find the data distributed as shown in Figure 11.4. The
comparisons under the bell curve (e.g., to the moon, coast to
coast, and 1 inch) show the relative size of sigma, 3 sigma,
and 6 sigma in relation to examples of area, time, and distance.
The upper and lower limits of this dispersion can be calcu-
lated, and if the activity occurs under normal circumstances, you
would have incidents outside these limits only when a special
cause occurs. In a snowstorm you might take 40 minutes, but if it
was a school vacation day, all the stoplights were green, and you
broke the speed limit, you might take only 12 minutes.
The objective of Six Sigma is to focus on the critical pro-
cesses in your business and reduce variation. For example, for the
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Lower Normal Upper

specification distribution specification
limit (centered) limit
6S 3S C +3S +6S
Area Time Distance Parts per million

S Sports stadium 31years To the moon 317,300
3S Hardware store 3 months Coast to coast 2,700
6S Needlepoint 3 hours 1 inch 3.4
Figure 11.4 The Six Sigma concept.
journey to work, reduce the variation to plus or minus a fraction

of a second. Once you bring the business processes under con-
trol (we have a well-defined and predictable journey to work),
Six Sigma reduces the variation. However, its also important to
recognize that any process operates within a system.
What will reduce the journey time is a fundamental change
in the system. In other words, you build a highway. Thats a
new system for getting to work.
We cant change the system on our journey to work (the
roads, the stoplights), but we can change the system in our orga-
nization and so its important to take a higher-level view of the
variation in our organization at the outset. This is often called
the 30,000 ft. view or strategic view. What we find, to our
surprise, is that over 90 percent of the variation we experience
in our processes is due to the way our system or organization
has been set up, and only a little over 5 percent of the variation
we experience is due to special causes. We also find that we
can often cause major harm by tampering with a process on a
day-to-day basis instead of just leaving it to run its course. This
is like constantly changing lanes in heavy traffic. The net effect
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on your journey to work is small, and you arrive having burned

a lot of nervous energy, which affects your ability to carry out
other processes.
The heart of the Six Sigma methodology is to reduce the
normal variation in critical processes, which is 3 (2700 parts
per million), to 6 (3.4 parts per million).
To achieve this, we need to understand a process, and we do
this by collecting data. There is an important credo to remem-
ber (Breyfogle 2001):
DataJust numbers
InformationPatterns in the data
KnowledgeInformation that can be acted on
ValueKnowledge that leads to improvement
The aim of Six Sigma is to build knowledge that creates com-
mercial value.
AVOIDING FAILURE
If we go back to the biggest causes of measurement failure,
which I described at the beginning of this chapter, it is clear
that you need to establish process ownership. The person who
owns the process that creates nonconformancewhether that
process is a meeting, the annual budget, invoicing, or machin-
ing a componentmust be the person who records the measure-
ment data on the problem. Regardless of whether you are the
president, an operator, a salesman, or a supervisor, if you own a
process that creates nonconformance, you have a responsibility
to the rest of the people in your organization to eliminate that
nonconformance.
You may need your customer to feed back measurement data
to you, but it is critical that you record the data. Only when you
record the data do you start to analyze the data, and only then do
you find the root cause of the problem. Meaningful measurement
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is the cutting edge of change, and when you have measurement

established, youre ready to move on to the most powerful and
most misunderstood tool of quality: cost of quality.
BROWSERS BRIEFING
Meaningful measurement is the cutting edge of quality

improvement.
Dont measure trivial items, and dont measure items
you cant influence.
Visible involvement of leadership in measurement is
critical.
Measurement is simply the recording of events to find
out more about a process.
Recording our actions is the most powerful way of
changing our behavior.
Build linkages with internal customers and suppliers
and measure together.
Keep measurement simple and not time consuming.
Use tools such as bar charts or check sheets.
Use team measurement if individuals are nervous.
Dont use SPC unless you have developed a measure-
ment culture.
Six Sigma is a concept for reducing process variation.
REFERENCE
Breyfogle, F. 2001. Managing Six Sigma. New York: Wiley.
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H1320 Merrill.indd 144 3/13/09 4:58:01 PM
12
Cost of Quality
Leadership
Process Education
ownership
Continuation
You plan and manage quality in the same way as you plan and
manage finances.
Joseph Juran
Y
ou have probably encountered the concept of cost of
quality. You probably know that few people manage
to use it effectively. A few years ago, I met with a
UK company, Mitel, that used cost of quality very effectively
to drive its corrective action system. Its methods were very
145
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simple. Other companies I have worked with in Europe and

North America have also been successful using these simple
methods.
However, far more companies have not used cost of quality
effectively, even though they have been fascinated by this very
powerful tool of quality. A common reason they fail is that they
make simple concepts too complicated. Quality professionals
are frequently guilty of creating too much complexity.
A fundamental principle of quality, safety, and the envi-
ronment is that we either prevent or correct. We all know it is
better to prevent. Cost of quality demonstrates the dollar value
of preventing versus correcting. Correction comes from fail-
ure and incurs wasted time, energy, and resources. This cost
is usually called the cost of failure or the cost of waste.
Money spent preventing waste is the cost of prevention.
Quality professionals frequently start subdividing this.
Cost of waste or failure becomes internal and external failure,
and cost of prevention splits into appraisal and prevention.
Cost of quality is a tool for getting senior managements
attention. Keep your message simple. As a CEO I want to know
what I am wasting. If its internal or external, those are details.
The next thing I want to know is how much I must spend to
get rid of that waste. What is my investment? This way I can
calculate my return on investment; if it is 5:1 or maybe 10:1 for
specific problems, then you have got my interest and my desire
to act.
Next let me point out that most of this failure or waste
occurs as the result of poor communication. Dont obsess
with your scrap if you are in manufacturing. This is only 2
or 3 percent of the wasted costs. Its the reworking of your
plans, the poor communication between departments, and the
wasted time of senior people where your big opportunity cost
will be found.
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Chapter Twelve: Cost of Quality 147
WHY THE GREAT INTEREST

IN COST OF QUALITY?
The discovery that 2535 percent of your organizations costs
are being wasted is a great attention-getter, as Figure 12.1 shows.
This waste happens because people are not able to do their job
right the first time.
When you express this waste in cold, hard cash, it really
focuses your attention on the opportunities for improvement.
However, it doesnt stop there; you can now prioritize which
problems to work on by feeding the cost of quality (cost of waste
or cost of failure, to be more specific) into your corrective action
system. Finally, you can measure your success in improvement
through a continuous collection of cost of waste, using these data
to show the value of your corrective action activity.
The following are typical examples of cost of waste that we
take for granted:
Reprocessing information
Replanning
Unplanned inventory
Handling complaints
Cost of waste
Error-free Cost of prevention

work
Figure 12.1 The cost of waste.
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Labor turnover
Overdue accounts
On the other hand, the following are examples of activities that
represent prevention:
Process auditing
Education and training
Pilot plant activity
Developing procedures
Preventive maintenance
So cost of quality does these things:
Focuses on opportunities for improvement
Prioritizes opportunities for improvement
Measures success in improvement
UNDERSTANDING THE CONCEPT

OF COST OF WASTE
How did the successful companies make cost of quality work
for them? The first key to success is that everyone in the com-
pany should understand the concept of cost of waste. This is the
key component of cost of quality.
Look at the process diagram in Figure 12.2. Think of an
everyday job we all do, for example, writing a report for our
boss. We all unconsciously use cost of waste to improve the
way we write this report.
The process (1) is writing a report, and when weve com-
pleted the report, we check it (2) to make sure it meets our
bosss requirements. We do this because if our customer (3),
the boss, finds any errors, the cost of waste could be much
higher!
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6. Cost of 5. Cost of
prevention prevention 2. Check
Supplier Requirements 1. Process Requirements 3. Customer
7. Cost 4. Cost
of waste of waste
Figure 12.2 A process diagram for corrective action.
We spend, say, 20 minutes checking and find (to our horror)

that the numbers dont balance. So we then spend the whole
afternoon recalculating and rewriting the report (4).
We learn from this experience. Were not going to waste four
hours of our time (cost of waste) the next time we write a report,
so we become preventive (5) by writing a checklist (or procedure)
and improving our computer skills (training). We also talk to our
suppliers, who provided the information for the report, and ask
them to provide it in a more mistake-proof form next time (6).
These may be people who work for us, and we also make sure
they understand our requirements. This will help us avoid having
to send incorrect information back to them (7) the next time we
have to write a report. These last three actions are cost of preven-
tion items aimed at reducing our own cost of waste.
Whenever information or materials have to be reworked,
this is a cost of waste. The four hours we wasted rewriting the
report can translate into anything between $250 and $1250,
depending on whether we are an accountant or president of the
company. However, take a moment to think of what might have
happened had we not checked the report, if it had gone forward
and key business decisions had been based on it. The domino
effect can be staggering, and it doesnt stop there. Jurans law
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of ten demonstrates the ripple effect, which occurs when a

small error is missed in a design situation:
If it costs $1 to correct an error at the drawing board or
in a report
Then it costs $10 in verification
$100 in manufacture
$1000 in assembly
$10,000 in commissioning
$100,000 in field retrofits
and ultimately $1 million in litigation
If you have been involved in engineering design, you can relate
to this.
When you look deep into an organization, you find between
one-quarter and one-third of peoples time is wasted reworking
information or materials. Some people can spend 100 percent
of their time correcting errors. For every $10 million in oper-
ating costs, your company is wasting between $2 million and
$4 million. Think of the difference if you took half or even a
quarter of this to the bottom line.
Figure 12.3 shows how a typical cost of waste calculation
is carried out.
Hours
or units $ per
wasted time unit $ per
Description per time or unit year cost
Process of waste unit of waste Calculation of waste
Writing a Rewriting a 4 hours/ $60/hour 4 60 12 2880
report report month
Blending Reblending 1 hour/ $150/ 150 52 7800
chemicals off-spec week hour
chemicals
Figure 12.3 Cost of waste calculation.
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Cost of waste is the driving force behind continuous pro-

cess improvement.
INTEGRATING COST OF WASTE AND

CONTINUOUS IMPROVEMENT
The second key to success is understanding where cost of waste
fits in with the continuous process improvement cycle.
The steps in continuous process improvement are as
follows:
1. Identify processes to be improved (first-cut cost of
waste)
2. Define ownership of processes
3. Identify customers and suppliers
4. Agree on requirements
5. Measure problems
6. Collect cost of waste (continuous collection cost of
waste)
7. Select problems to address (prioritize using cost of
waste)
8. Implement corrective action
9. Continuous improvement (go back to step 1)
You use cost of waste information in the continuous process
improvement cycle in steps 1, 6, and 7.
At the outset, you use cost of waste to identify which pro-
cesses are the main cause of your wasted time and materials.
You do this by conducting a first-cut cost of waste calculation.
Dont try to find this cost number in your financial records;
youll probably find between 2 percent and 3 percent of your
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operating costs. This first cut is a one- or two-day task that

touches each of your managers and supervisors at some point
and unearths between one-third and one-half of your total cost
of waste.
I open a first-cut day by briefing the key managers in the
business on the principles of cost of quality. This takes about
an hour. I then send the managers back to their own depart-
ments with four key questions, which they will brainstorm
with their staff:
1. Where do you waste time?
2. Where do you not know requirements?
3. Where do you get problems dumped on you?
4. What are your biggest hassles?
The questions are designed to enable the manager and staff to
identify the major time-wasters and hassles in the department,
and this also takes about an hour. While theyre doing this, I
spend time with the CFO, going through the accounts to iden-
tify cost of waste items in the ledger.
After the brainstorming, the departments then start to
quantify and prioritize the items they have listed. By this time,
the CFO and I are ready to visit with each of the groups, help
remove any roadblocks, and feed any extra items we may have
found in the accounts.
This takes us through till lunchtime, and after lunch, we
start to feed the groups the cost data they now need. By midaft-
ernoon, a smaller company would be ready to start consolida-
tion of each departments findings, but in a larger organization,
this would run into the following day. The end result is a num-
ber owned by the people who calculated it, and a great desire to
get started in quality improvement.
Figure 12.4 shows the agenda for a one-day cost of quality
workshop.
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Attendees: Key Managers of the organization

Summary: The day starts with an overview of the cost of quality
and includes brainstorming workshops with work groups and an
analysis of the book of accounts with the CFO. The dollar figure for
the organizations cost of waste is consolidated by the end of the day.
An organization typically wastes 2535 percent of its operating costs.
The day identifies between one-third and one-half of this total cost.
The final figure is calculated by the Managers themselves, giving them
ownership and a desire to act.
Agenda
8:309:30 a.m. Managers briefed in the concepts of quality, cost of
quality, and cost of waste
9:3010:30 a.m. Managers and staff brainstorm questions to identify
waste in the organization
10:30Noon Managers and staff quantify the waste in terms of
time, materials, or units
9:3011:00 a.m. CFO and Consultant analyze the book of accounts
to identify areas of waste
11:00Noon CFO and Consultant visit each Managers group to
deal with any roadblocks
Noon1:00 p.m. Managers meet for sandwiches and share experiences
so far
1:002:00 p.m. Managers and staff continue to quantify areas of
waste
1:002:00 p.m. CFO and Consultant revisit groups feeding in cost
data
2:003:00 p.m. Groups calculate cost of waste using data from CFO
2:003:00 p.m. Finance department consolidates cost of waste
from groups
3:004:00 p.m. President presents the Key Managers with the cost
of waste figure they have identified and states how
the company intends to tackle the opportunity that
this presents
Outcome: The day identifies between one-third and one-half of the
total cost of waste in the organization. The calculations are produced
by the Senior Managers of the organization working in conjunction
with their staff. Processes that will benefit from improvement are
prioritized on a cost benefit basis.
Figure 12.4 Agenda for a one-day cost of quality workshop.
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You will discover after the first cut that most of the pro-
cesses where problems occur do not have clear ownership. In
other words, the boundaries of each process in the business
need to be clearly defined, and a person made responsible for
the activity inside each set of boundaries.
Steps 2, 3, and 4 in the continuous process improvement
cycle involve determining process owners, identifying the inter-
nal customers and suppliers for these processes, and agreeing
on requirements.
For this to succeed, you have to create an environment of
mutual trust and respect in the organization. This emphasizes
the need to work on the people skills in parallel with the pro-
cess skills in the change process.
When you have established steps 2, 3, and 4 in the continuous
process improvement cycle, people are ready to start measuring
nonconformances on the processes they are responsible for. This
is the second point (step 6) at which cost of waste is used.
Measurement was discussed in Chapter 11, and we saw that
it doesnt have to be fancy or high-tech to achieve stunning
results. Combined with cost of waste, it becomes extremely
powerful. Remember how Brian Eamer in Moose Jaw used
cost of waste to get his suppliers attention?
Finally, if each process owner can feed measurement infor-
mation into a continuous collection system for cost of waste, the
whole company will be able to make sound financial choices on
which interdepartmental problems should be tackled first. This
is the next point (step 7) in the continuous process improve-
ment cycle where cost of waste is used.
KNOWING HOW TO USE COST OF WASTE

Having identified the second key to success as knowing where
cost of waste fits in the continuous improvement cycle, the
third key to success is knowing how to operate the key points
where cost of waste fits.
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I mentioned before that the first-cut cost of waste of a

one- or two-day exercise focuses your attention on where your
opportunities for improvement exist. You will find about one-
third to one-half of your total cost of wasteor to put it another
way, you will uncover about $1 million of wasted time and
materials for every $10 million of operating costs.
The first cut is the first key point at which cost of waste is
used, and it is vital that you calculate this number yourself in
order to truly believe the opportunities that lie ahead. How-
ever, you should have someone who truly understands cost
of quality facilitate the activity, or you wont open all your
options and, more importantly in my experience, youll never
get to end of job.
The second point where cost of waste is used is in conjunc-
tion with measurement and data collection. Again, remember
Brian Eamers meat processing plant in Chapter 11, where he
communicated cost of waste to his supplier. Those key aspects
of data collection were critical to success.
The third point where cost of waste is used is where most
people fail to make it happen. This will only work when you
have measurement working smoothly, and people really want
to participate in the improvement process.
I remember Mitels managing director, David Rayfield,
showing me around the facility and sharing charts like the
one shown in Figure 12.5. This chart is typical of what a sales
office, for example, might collect as its main problems. Notice
that it is collecting data on only five items, so everyone can stay
focused on these key issues.
Imagine you are a sales clerk. It is Monday morning and
you receive a call from one of your customers, who has been
short shipped. You deal with the problem, and then you put an
entry on the tabulation chart, which is a large white board on
the wall of the sales office. Your colleagues see you do this, and
it shows your participation in the quality process. Teamwork in
action.
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Problem: Missing information

Monday Tuesday Wednesday Thursday Friday Total
Selling price || ||| | 6
Size | | 2
breakdown
Trim |||| |||| 8
Delivery | | 2
Prepack || |||| 6
Figure 12.5 A simple check sheet for problem measurement.
Rather than have everyone fill out a sheet, and risk some
people forgetting about it until the end of the month, have one
person collect this information on a clipboard. Sharing this with
a different person each week makes it teamwork again. Roving
supervisors would use three-by-five-inch cards or a personal
digital assistant (PDA) for recording data.
Each week the check sheets are sent to management infor-
mation systems (MIS), which is then able to send a monthly
cost of waste report to the department. The calculation data in
the MIS software will have been provided by the department
when the system was originally set up.
The following are keys to success in a continuous collec-
tion system:
Making sure that measurement is working beforehand
Collecting the data, as opposed to reporting the data
Collecting only five or six items per department
Using the data to drive the corrective action system
At Mitel, the department teams reviewed the cost of waste report
each month to make decisions on corrective action and also to
check their progress in eliminating problems. They drove down
their cost of waste from the typical 25 percent of sales to less
than 15 percent in less than two years.
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CAN I DO THIS TOO?

WHAT WILL I GET OUT OF IT?
Over the years I have seen so many companies focus on weak
process areas by using the cost of waste tool. RHM in Europe
attacked its budgeting process, and in two to three years it
saved millions of dollars in operating costs by defining the
budgeting process more accurately. Aluma Systems identi-
fied the interface between sales and engineering as a major
improvement opportunity and made similar savings. Probably
the most dramatic savings I have facilitated were at the Euro-
pean insurance company Legal & General, which identified its
policy retrieval process as only one among many where seri-
ous savings were made. The investment in prevention normally
requires little more than defining the process and specifying
clear requirements.
I am frequently asked how cost of quality fits with lean
manufacturing, and I use it as the tool for identifying where
to focus. Once you know your process focus, whether it is the
budget process, the engineering design process, or the informa-
tion storage process, attack the issues of cycle time reduction
using lean techniques and then reassess the waste to validate
your savings.
Of course you can make cost of waste work for you, but
you do need to follow a well-planned and systematic approach
led from the top of the organization. Remember the steps in
continuous process improvement. What you get out of using
cost of waste in this framework may surprise you.
I remember asking David Rayfield what had been the big-
gest effect of quality improvement at Mitel. I expected him to
talk about the major turnaround in the profitability of the com-
pany, but instead he replied, I get to go home at six oclock
every night instead of seven oclock. I spend time with my fam-
ily which is quality time, and I come to work the next day
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fresh and ready to go. David had followed the nine steps of
continuous improvement.
The first step is a very simple one. A first cut on your cost
of quality will get you started. You must get some qualified sup-
port, but dont take any shortcuts. And dont lose sight of the
purpose of cost of quality, which is to drive corrective action,
the subject of the next chapter.
BROWSERS BRIEFING
A cost of quality system must be built on the founda-

tion of a measurement system.
Keep your cost of quality terminology simple.
Cost of quality translates measurement data into the
common language of business (dollars).
25 percent to 35 percent of your organizations costs
are wasted because people cant do the job right the
first time.
Seeing the cold, hard cash of waste focuses peoples
attention.
You can prioritize which problems waste the most
money.
You can measure your success in saving money as cor-
rective action takes effect.
A first-cut cost of quality at the outset of your quality
journey helps focus on opportunities for improvement.
Continuous cost of quality collection must occur after
measurement is in place.
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13
Corrective Action
Leadership
Process Education
ownership
Continuation
Everyone has two jobs. The first is doing their job, and the
second is improving the way they do their job.
Masaaki Imai
I
remember, as chairman of my companys QMT, initiat-
ing a group of action teams, which were sent out into
the business to identify areas where corrective action was
required. I also remember the huge list of problems that these
teams dumped on my desk, with no hope of finding solutions.
Our building in Wigan, Lancashire, which was over 100 years
old, was made famous in George Orwells novel The Road
159
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to Wigan Pier. Like most businesses, we were struggling for

cash to finance improvement. People asked for a new elevator
system, which would have cost more than a years earnings. A
new air conditioning system would have soaked up more than
two years earnings. Within six months, our quality improve-
ment program was totally discredited through lack of action.
We had no system for addressing problems and no way of
choosing which was the most important problem to work on.
Corrective action (C/A) is the bottom line of the quality
improvement process. It happens all the way through process
ownership, measurement, and cost of quality.
WHAT IS CORRECTIVE ACTION?

The nature of corrective action varies widely. In its simplest
form, it may just be two people agreeing to a missing require-
ment in their day-to-day transactions. At its most complex, it
may be a multidisciplinary team involving people from inside
and outside the organization working on a problem that affects
a wide range of processes. Either way, corrective action means
removing the root cause of a problemand not just applying
the quick fixes with which the fast guns of the Fortune 500
have made their names over the last 30 years.
In the ultimate quality world, corrective action would not be
necessary. All our processes would be designed in a preventive
manner, and there would be no need to correct problems later.
But the real world isnt like that! you say. We dont always
have time for prevention. However, Im sure you expected the
people who designed the local nuclear power plant or, for that
matter, the people who designed the elevator you used today to
be preventive in their work. When you use cost of quality, youll
find that the cost of prevention is far less than the cost of waste.
One reason your business is wasting money today is because
you were not preventive in designing the original process or
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Chapter Thirteen: Corrective Action 161
you made process changes without building prevention into the

new process design.With this reality in front of you, youve got
to use corrective action to put prevention back into the process.
The good news is that the return on investment for this correc-
tive action is still one of the best youll ever make.
Obstacles
The main obstacle, as you may have guessed, is you. Remem-
ber the quote in Chapter 9 about the best firefighters being the
arsonists? You have been lighting fires all these years to show
your great firefighting skills. You want the wonderful return on
investment that corrective action will give you, but youre not
prepared to make the investment thats needed.
The investment is not cash; youd do that easily. The invest-
ment is time. Leading Japanese companies such as Toyota and
Sony invest 15 percent of their time in process improvement
(Suzaki 1987). If you give only half that time to it, your people
will work four hours a week on corrective action. More recently,
Google invests a day a week of its peoples time looking for
new ideas (Merrill 2008).
That time may simply be spent agreeing on those require-
ments with internal customers and suppliers, or it may be spent
on the corrective action team I talked about. The challenge is
to budget time for corrective action, and this will probably be
the greatest test of your commitment to quality. This time has
to be built into the business plan, and the key players in your
organization must sign off on it. Every person who has some-
one reporting to them needs to be aware of and agree to this
time commitment.
Solutions
Some basic training in the principles of time management
is a good investment. How else will you manage your time
budgets?
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Lets revisit the steps in continuous process improvement:

1. Identify processes to improve
2. Define ownership of processes
3. Identify customers and suppliers
4. Agree on requirements
5. Measure nonconformance
6. Collect data and calculate cost of quality
7. Select problems for action
8. Take corrective action
9. Continuous improvement
The first four steps I talked about in Chapter 10. They are the
basics of corrective action: agreeing on requirements. These
activities should take up most of your time in the first three to
four months of the improvement process.
The next step, measurement, requires a bit more thinking. You
start doing measurement to make you think (see Chapter 11),
and if you dont think about what youre measuring, youre wast-
ing your time measuring. To make you think, there is a wonderful
and simple corrective action tool called goal setting.
GOAL SETTING
Picture yourself as a delivery driver who makes 100 deliveries a
week. Youre late for 50 of them each week, on averagea clear
case for corrective action. (If you dont drive a truck, think of
the appointments youre late for, or all the other things you could
measure to improve.) You wont get down to zero late deliver-
ies in one week. You need to identify the reasons for being late.
You need to then set a series of goals for eliminating these root
causes. (Figure 13.1 shows a goal made visual as a dashed line
H1320 Merrill.indd 162 3/13/09 4:58:02 PM

# of nonconformances 50
25
Goal
Time
Figure 13.1 A performance graph with a goal line.
on a performance graph.) Perhaps its adjusting your delivery

route, getting on-time maintenance done on the truck, or maybe
its just getting to work on time. By matching a reduction goal
with the corrective action you will take, you force yourself to
make a change in your behavior or your process. The time ele-
ment cuts out the tomorrow will do attitude.
BIGGER PROBLEMS
When we are not able to solve problems on our own and need to
work with others, it helps to have a consensus tool for deciding
which problems to address first. Our good friend cost of quality
helps here, and a simple matrix, like that shown in Figure 13.2,
x x
Cost of problem
Address x
these
problems
x x
Cost of solution
Figure 13.2 Cost of problem versus cost of solution.
H1320 Merrill.indd 163 3/13/09 4:58:02 PM

can be used to chart the cost of a problem against the cost of the
solution. The nearer your problem is to the top left corner, the
better it is a candidate for attention.
PROBLEM SOLVING
Problem solving is what most people think corrective action is
all about. Ive seen so many fuzzy, touchy-feely approaches to
problem solving. You do need an empowered environment to
enable people to tackle problems freely, but this does nothing
for the direct solution of problems. Problem solving is a hard,
crunchy business.
Problem solving means process ownership first and then
problem ownership. This is a beginning. People then need an
easy-to-remember method that has five, or at most six, steps
that cover the following points:
1. Define the problem
2. Fix it temporarily
3. Collect the data
4. Analyze the cause
5. Select the solution
6. Implement and track the solution
Problem-Solving Methodology
1. Define the Problem. Albert Einstein said, If I had
sixty minutes to save the world I would spend fifty five
minutes defining the problem. This is not easy. We all
jump to defining the solution. We must specify what the
process is failing to deliver, not specify what we think
must change in the process. I remember taking my car
into a repair shop and telling them it kept cutting out at
stoplights and needed a tune-up. I got a phone call two
H1320 Merrill.indd 164 3/13/09 4:58:02 PM

hours later telling me an air hose had come loose. The

problem was that the car kept cutting out at stoplights,
not that the car needed a tune-up.
2. Fix It Temporarily. My fix for the car problem was to
keep my foot on the gas pedal when I was at a stop-
light. Fixes are expensive and so we must recognize
them. Work out the cost of waste; this is an incentive to
find a solution. It reminds us that we are wasting time
and money with temporary solutions.
3. Collect the Data. This is what I discussed in Chap-
ter 11. This helps you learn about the process and the
problem.
4. Analyze the Cause. Once you have data you can start
to see patterns that will tell you what is going wrong in
the process. Share and discuss the data. Use collective
knowledge to take a deeper look inside the process.
5. Select the Solution. Linus Pauling said, The best way
to get a good idea is to get lots of ideas. Use your col-
lective knowledge to generate lists of ideas, and then
select your solution based on time, cost, and risk. How
quickly can you implement the solution, what is the cost
of implementation, and what is the risk of it failing?
6. Implement and Track the Solution. The change you
make must be at a system level, or your process will
eventually revert to the old state. You must monitor the
new process and deal with any negative effects.
You must have a problem-solving methodology that everyone
follows so that the organization speaks the same language.
A corrective action system is the framework within which this
problem-solving methodology is used.
Many companies have all of these tools for solving prob-
lems, but more often than not, nothing gets better. The biggest
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failing is that most companies dont have a system for choos-

ing and tackling the problems they solve. Or they may have a
system, but everyone understands it differently.
THE SWAT TEAM TRAP

A lot of organizations get confused by their desire to implement
empowerment. They have so much guilt at not having empow-
ered people in the past that they try to give everyone the power
to solve problems immediately. They set up SWAT teams that
roam the company looking for troubles to shoot. Think about
it; you need to know who the enemy is before you start firing.
SWAT teams simply upset process owners.
If you have a cost of quality system everyone is feeding
into, you can tell which are your biggest problems (see Chap-
ter 12). You need a system that enables clear decisions on
which problems your scarce resources should tackle, not an
anarchic free-for-all.
THE CORRECTIVE ACTION SYSTEM

Most people are surprised when they are told their organization
already has a corrective action system. Thats the good news.
The bad news is that most corrective action systems are too
loose and informal to be effective.
If you are hit with a recurring problem, you have some
choices on how to handle it:
Solve it
Discuss it with a colleague
Give it to an expert
Ignore it
If you cant get the resources to solve it, try to persuade your
boss to put some muscle behind the effort.
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Your boss has similar choices, but perhaps with a bit more
influence. You discuss the problem, and when the two of you
are unable to resolve it, your boss decides to escalate the
matter; this is where the problem starts to lose some of its
urgency.
A typical scenario has your boss taking the problem to the
monthly management meeting, in the hope of persuading col-
leagues to buy into the need for a solution. This decision is
often based more on emotion than on fact, and the organiza-
tion gradually builds a closet full of skeletons representing the
unsolved process problems in the organization. The biggest
obstacles are usually that problems are cross-functional and
process ownership is not properly defined.
All too often a team is established to solve problems but
fades away over time. You need a crisp, well-defined system for
identifying these problems and then seeing the system through
to its conclusion.
The corrective action system should be launched company
wide only after first establishing process ownership, measure-
ment, and a cost of quality system. Process ownership means that
you define your processes and can identify the skills and mem-
bership required for cross-functional corrective action teams.
Measurement means you have management by fact and can
obtain information for solving problems. Cost of quality means
you can select your problems on a return-on-investment basis, in
the way you would approach any other business project.
As you follow each of these steps, you will be resolving
problems on a departmental or functional basis, and this provides
the foundation for the later work on cross-functional problems.
Your corrective action system should operate in the same way
you normally resolve business problems, but with the difference
that you have the discipline of a system that everyone knows and
understands. A corrective action process typically flows in the
manner you see in Figure 13.3.
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Any person who identifies a problem should quantify it using

measurement data and a cost of quality calculation. If the prob-
lem is a routine weekly occurrence, it should also be feeding into
the cost of quality system. The cost of quality system should col-
late problems of a similar nature and feed them into the correc-
tive action system. For example, if a faulty component is causing
a problem in a hundred different locations, your cost of quality
system will highlight the problem company wide. If a faulty soft-
ware system is wasting four hours a week at a hundred terminals,
the cost of quality system rings alarm bells. Individuals should
be able to blow the whistle on these problems, and they do this
through the corrective action system. One-time events are also
identified through the corrective action system, and a critical
step is for the individual to discuss the problem with their boss
and agree on the completion of the corrective action form.
This avoids flooding the system with corrective action
requests, but the presence of a cost of quality system also pre-
Problem originates Decision maker
Discuss problem Assemble team
Yes Document solution Team works

Solve?
to admin. through problem
No
C/A request form Problem solved
C/A admin. Notify originator
Decision maker Team disbands
Figure 13.3 Corrective action flowchart.
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vents personality conflicts from stopping the submission of

corrective action requests.
THE CORRECTIVE ACTION ADMINISTRATOR

A corrective action request form, such as the one shown in Fig-
ure 13.4, is submitted to the corrective action administrator. The
administrators job is pivotal. First, the administrator maintains
a progress log for the management team, which ensures that
problems dont get lost; Figure 13.5 shows an example. Once
in the log, a problem will be seen through to a conclusion.
Second, the administrator assesses the return on investment
for tackling a problem, and this determines whether a problem
will progress to formation of a C/A team (or a process improve-
ment team, if you prefer). Third, the administrator has to
Location: Date:
Requester: Phone:
Supervisor: Phone:
Describe the problem:
What is the process?

What is the nonconformance?
How often does it happen?
How much waste does it cost each time?

Time:
Equipment:
Material:
Estimated cost of waste:
Who can help with this problem?
What measurements have been taken? Include charts.
Figure 13.4 A sample form for requesting corrective action.
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Log number 31 32 33
Date received 8/1/08 8/5/08 8/13/08
Originator SM MF GE
Problem No Training
definition procedure omitted
C/A assignee FA DE SM
Last status 9/13/08 9/21/08
report
Status due 10/1/08 10/1/08
Which step 4 2 1
Action Write Develop
planned procedure training
plan
Date closed
Figure 13.5 A sample corrective action administrator log.
identify the senior process owner, or sponsor, for the C/A prob-
lem and make sure the sponsor establishes a well-designed team
to tackle the problem. Finally, the administrator feeds back
process information to the management group and ensures that
resources are directed where the company requires them.
A corrective action team is really a process improvement
team. The people involved in the process should be on the team,
and special skills, such as finance and data processing, are drafted
into the team as needed. The team works through the problem
using the problem-solving methodology you have in-house,
which will be similar to that described earlier in the chapter.
Team membership may fluctuate, and you may be down to
as few as two people when doing the final measurements on the
effectiveness of your solution. When the problem is solved, the
team disbands.
Nothing remarkable, you may say. But corrective action
is more a case of discipline and perseverance, a bit like good
police work. The engine that drives corrective action is the
management team. Figure 13.6 shows how it fits into the cor-
rective action system.
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Management review
Executive Problems or
summary projects for action
with resources
agreed
Follow-up
monitors C/A Utilize resources
Figure 13.6 Management review.
USING FAILURE MODES AND

EFFECTS ANALYSIS
Cost of quality is one way of prioritizing which problems to
address. Failure modes and effects analysis (FMEA) is another.
This is a lot more intense, but if it is done in a group situation
it provides another very good consensus tool.
FMEA is used to identify and design steps to counteract
anything dangerous or costly that could go wrong with a prod-
uct or process. First developed by the U.S. military in the late
1940s, FMEA spread into the aerospace, automotive, and med-
ical device industries. It ensures that products are designed to
be reliable and safe. It is a great way of identifying targets for
preventive action, and it is also a way of selecting which cor-
rective action deserves the most attention.
FMEA is a planning tool that helps teams anticipate and
prevent problems. For each step in a process, the team asks
what can go wrong and decides what to do. Figure 13.7 shows
the FMEA approach, using the process of eating a meal in a
restaurant as an example.
Column 1: Identify the process step: taking an order at a
restaurant.
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1. Process 2. Potential 3. Potential 4. Severity 5. Potential

step failure mode failure effect of failure cause
Enter What could What would See Fig- Use one box
name of go wrong at be the effect of ure 13.8 for each
step this step in the this failure? allocate a failure mode
process? score
Taking an Attributing the Correct on 5 Inadequate
order at a wrong meal to a delivery of the training
restaurant person meal
Missing a Person sits 8 Poor
persons order without meal ordering
while others eat process
Specifying wrong Person 6 Poor
side item (or continues with ordering
missing the item) meal process
Specifying the Upset 8 Inadequate
wrong method customers training
of preparation
Not giving the Everyone waits 8 Understaffing
order to the
kitchen
Note: When you have completed the table, analyze the high risk priority
numbers (RPNs) and decide on an action plan.
Figure 13.7 FMEA chart.
Column 2: Determine how this step could fail. The

team brainstorms all the potential ways the
anticipated change in a process, product, or
service could fail (failure modes) and lists
these failure modes in the chart:
Attributing the wrong meal to a person.
Missing a persons order.
Specifying wrong side item (or missing the
item).
Specifying the wrong method of preparation.
Not giving the order to the kitchen.
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8. Ability 9. RPN 10. Plan

6. Likelihood 7. Current to detect index proposed
of occurrence controls failure (max 1000) new controls
Likelihood What controls See Fig- Severity What needs
of this are in place to ure 13.8 likelihood to be done?
occurring identify and allocate a detectability
see Figure 13.8 stop this? score
4 Electronic 2 40
order pad
4 Electronic 9 288
order pad
8 None 6 288
7 None 8 448
6 Manager 9 432
Figure 13.7 FMEA chart. (Continued)
Column 3: Describe in a few words what the impact of that

failure would be:
Correct the order on delivery of the meal.
Person sits without meal while others eat.
Person continues with meal.
Upset customers.
Everyone waits.
Column 4: Score the severity (S) of the failure using the
scoring chart in Figure 13.8:
Correct the order on delivery of the meal (5).
Person sits without meal while others eat (8).
Person continues with meal (6).
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Scoring
Degree of severity
1 No noticeable effects by the end user
2 End user slightly annoyed
3 End user annoyed at poor performance
4 End user dissatisfied because of poor performance; may complain
5 End user very dissatisfied because of poor performance; may
complain
6 End user makes complaint
7 End user has high degree of dissatisfaction and complains
8 End user has very high degree of dissatisfaction
9 Product or service cannot be used
10 Very severe consequences including health risk
Likelihood of recurrence
1 Likelihood of recurrence is remote
2 Very low likelihood of recurrence
3 Low likelihood of recurrence
4 Occasional recurrence
5 Lowmoderate recurrence
6 Moderate recurrence
7 Highmoderate recurrence
8 High failure rate
9 Almost certain to recur/fail
10 Assured failure
Ability to detect
1 Certain that the potential failure will be found or prevented before
reaching the end user
2 Almost certain that the potential failure will be found or prevented
before reaching the end user
3 Low likelihood that the potential failure will reach the end user
undetected
4 Controls may detect or prevent the potential failure from reaching
the end user
Figure 13.8 FMEA rating scale. (Continued)
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5 Moderate likelihood that the potential failure will reach the end user
6 Controls are unlikely to detect or prevent the potential failure from
7 Low likelihood that potential failure detected or prevented before
8 Very poor likelihood that potential failure detected or prevented
before reaching the end user
9 Current controls probably will not detect the potential failure
10 Absolute certainty that the current controls will not detect the
potential failure
Figure 13.8 FMEA rating scale. (Continued)
Upset customers (8).

Everyone waits (8).
Column 5: Identify the potential cause of these failures:
Understaffing.
Inadequate training.
Poor ordering process.
Column 6: Determine occurrences (O) (also called
probability). How often could the following
types of failure occur? Again see Figure 13.8.
Attributing the wrong meal to a person (4).
Missing a person off the order (4).
Specifying wrong side item (or missing the
item) (8).
Specifying the wrong method of preparation (7).
Not giving the order to the kitchen (6).
Column 7: List the controls that are in place to stop failure:
Electronic order pad.
Manager.
Column 8: Determine detection (D). How certain are we to
detect failure? What controls or measures are in
place that would increase the chances of detecting
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this failure? Use the scoring chart in Figure 13.8:

Not at all1, Absolutely certain10.
Column 9: Multiply severity (S), occurrences (O), and
detection (D) together to identify the risk
priority number (RPN).
Column 10: Start with the failures that have the highest
RPNs (focus on those above 300).
Discuss for each failure ways to (1) eliminate
its causes, (2) reduce the chance of it occur-
ring, (3) increase the chance of detection, and/
or (4) reduce its impact should it occur.
Assign responsibilities for carrying through on
the actions you just identified.
Optional: You can add other columns to the
chart to track what actually occurs when the
change is implemented. Check failures that
happened and make notes on how often they
appeared, what actions were taken, and what
impact those actions had.
I used FMEA recently with Yurek Pharmacy in St. Thomas,
Ontario, which was going through a significant business expan-
sion and developing a whole new floor for order assembly.
Delays could be seen for these reasons:
Problems with order input
Inventory on other floors
Pharmacist not verifying request before entering in system
Staging of final product on main floor
Method of billing
The team used a special scoring chart for healthcare, developed
by IHI, and identified three main areas for attention that scored
above the 300 mark (see Figure 13.9). They redesigned the activ-
ities of receiving orders and obtaining drugs and supplies.
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FMEA rating scale in healthcare

Severity rating scale
10 Extremely dangerous
Failure could result in death of a client or total system
breakdown
9, 8 Very dangerous
Failure could result in permanent injury of a client or a
serious system interruption
7 Dangerous
Failure causes a minor to moderate injury or a highly
dissatisfied customer; major system breakdown requiring
repairs or changes to processes
6, 5 Moderate danger
Failure causes minor injury to a client with some client
dissatisfaction; moderately severe system breakdown
4, 3 Moderate to low danger
Failure produces minor injury to a client with annoyance
of the client; minor system problems that can be
overcome with minor changes to processes
2 Slight danger
Failure causes an injury and client has no knowledge of
the problem. Potential for minor injury exists/little effects
on system
No danger
Failure causes no injury and has no impact on system or
processes
Probability rating scale
10 Certain probability of occurrence
Failure occurs at least once a day 1:5
9 Failure is almost unavoidable
Failure occurs every 34 days 1:10
8, 7 Very high probability of occurrence
Failure occurs once a week 1:25
6, 5 Moderately high probability of occurrence
Failure occurs once a month 1:50
4, 3 Moderate probability of occurrence
Failure occurs once every 3 months 1:100
2 Low probability of occurrence
Failure occurs once a year 1:500
Figure 13.9 FMEA rating scale for healthcare.
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Negligible probability of occurrence

Failure almost never occurs; no one can recall last failure
Detection rating scale
10 No chance of detection
No known mechanism for failure detection
9, 8 Very remote/unreliable
Failure detected with thorough inspection; this is not
feasible or readily performed
7, 6 Remote
The error can be detected with manual inspection; no
process for identification of error
5 Moderate chance
Process for double checks or inspection. No automated
method of detection of error. Relies on careful human
vigilance for detection
4, 3 High
There is 100% inspection or review of the process but it is
not automated
2 Very high
There is 100% inspection of the process and it is
automated
1 Almost certain
There are system constraints that prevent failure
Figure 13.9 FMEA rating scale for healthcare. (Continued)
PREVENTIVE ACTION
ISO 9000 introduced the idea of preventive action in 1994, and
yet to this day people struggle with the concept. The simplest
way I can explain it is that prevention is applied in two ways:
1. After the fact
2. Before the fact
If something goes wrong and you correct the problem, you change
the process so as to prevent the problem from occurring in the
future. This is prevention after the fact and it occurs within the
context of corrective action. On the other hand, you can design
a new product or process in a way that prevents a known prob-
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lem. You monitor the performance of a process and see it trending

toward failure. If you take action to prevent a problem in this situ-
ation, this is prevention before the fact. This, by the way, is the
preventive action that ISO 9000 refers to.
Weve progressed through the four stages of process
improvement, and it is essential while you address them that
you work in parallel on the development of the culture in your
organization. This is the subject of Part V.
BROWSERS BRIEFING
Corrective action means eliminating problems that

cause nonconformance in a process output.
Corrective action may simply mean two people agree-
ing on requirements.
Corrective action may involve a multidisciplinary team
working on a complete business problem.
Corrective action means avoiding quick fixes.
Ultimately, processes should be designed preventively
to avoid the need for corrective action.
There are nine stages in continuous process improvement:
1. Identify processes to improve.
2. Define ownership of processes.
3. Identify customers and suppliers.
4. Agree on requirements.
5. Measurenonc onformance.
6. Collect data and calculate cost of quality.
7. Select problems for action.
8. Take corrective action.
9. Continuousimpr ovement.
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Improvement can be driven by a simple tool, like goal

setting.
Your organization should have a standard problem-
solving methodology:
1. Identify the problem.
2. Fix it temporarily.
3. Collect the data.
4. Analyze the causes.
5. Select the solution.
6. Implement and track.
Avoid SWAT teams. Problems should be solved by the
people who own the process, with skills and knowledge
added on an as-needed basis.
Your organization needs a closed-loop corrective action
system.
Leading Japanese companies invest up to 15 percent
of peoples time in process improvement activity once
theyve completed their initial education.
FMEA is a great consensus tool for both corrective and
preventive action.
REFERENCES
ity Press.
Suzaki, Kiyoshi. 1987. The New Manufacturing Challenge. New
York: Free Press.
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PART V
The People
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H1320 Merrill.indd 182 3/13/09 4:58:03 PM
14
Education
Leadership
Process Education
ownership
Continuation
The ability to learn faster than your competitors may be the

only sustainable advantage.
Arie de Geus
A
good friend of mine, Brian Dalzell, was speaking about
education at a quality conference I chaired. He related
how his daughter had recently returned from school
and had mentioned that the class spent the morning on sex edu-
cation. In this enlightened age, Brian said he was pleased at the
news. He then asked the audience to visualize themselves in
the same situation, and asked how they would feel if their own
183
H1320 Merrill.indd 183 3/13/09 4:58:03 PM

184 Part Five: The People
child returned from school with the story that they had received
sex training that day.
In quality there has been a lot of education but a lot less
training. Putting it in everyday terms, companies invest in word
processing or spreadsheet software, yet few people fully use
the capability of that software. Those organizations that have
invested in their people to develop the skills of their software
users are getting the real return on investment. Too many times
a budget is expended on hardware and software, and the training
is left to take care of itself. Technology will give you an edge for
a while, but as it becomes more accessible to the competition,
your ability to use that technology is really what sets you apart.
The ability to learn faster than the competition is the only
competitive edge your organization possesses. Whatever busi-
ness youre in, youve probably heard the saying, There are
no secrets in this industry: People who do it better get the
business.
In England in 1963 there was a legendary robbery led by a
villain named Ronald Biggs. It was called the Great Train Rob-
bery. What we are going to talk about here is the Great Train-
ing Robbery. The millions that have been wasted through badly
designed and inappropriate training are becoming a legend in
themselves.
The opportunities for waste and error are enormous. You
may recall Masaaki Imais comment that everyone has two
jobs: (1) the job they do and (2) improving the way they do
their job. So education and training fall into two categories.
First is the education and training you need to do your exist-
ing job. Whether it is accounting or metalwork, operating
computer software or carrying out machine maintenance, we
all have areas of skills and knowledge. Second, we also need
to improve. If you are, say, a senior executive, how are your
keyboard skills when you operate that wonderful new laptop
computer you just acquired?
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Chapter Fourteen: Education 185
ACQUIRING SKILLS AND KNOWLEDGE

FOR IMPROVEMENT
Lets focus first on the skills and knowledge you will need to
operate your improvement activities. When you begin quality
improvement, you almost certainly discover a skill and knowl-
edge deficiencybut attending a one-day seminar wont give
you a degree in quality management. You dont deal with these
deficiencies with a crash course in the same way you crammed
to pass an exam in school.
Many people who run organizations think of education and
training in terms of the paradigm they acquired when they went
to school. Education is something given in big chunks. Every-
one gets the same, and if you throw enough of it at people,
some of it will stick. Training is thought of as verbally repeat-
ing the procedures for carrying out a job that is simple for the
instructor and a total mystery for the trainee.
The secret to successful education is just-in-time educa-
tion. You may recall my mentioning an education specialist in
Ontario named Treat Hull. His words at an ASQ conference
still stick in my mind: The half-life of education is about 30
days. Put another way, you will have totally forgotten half of
what you learn within the first month, unless you have put that
knowledge into practice. If you dont use it, you lose it.
TOP MANAGEMENTS QUALITY

EDUCATION PROGRAM
All of this underlines the need to plan your quality education
very carefully, and to line it up alongside your process improve-
ment activity. This applies right from the top of the organiza-
tion. Your leadership should be putting into practice their new
knowledge every bit as much as the administrative staff and
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operations people do. There must be specific workplace activi-

ties between each piece of education that is acquired.
Quality education must first show the management team
how to design and operate new organizational systems, and then
show everyone in the organization how to design and operate
new job processes. Your organization needs to know how to
apply improvement at both the macro and micro levels.
A common misunderstanding in education is that once
the initial burst is over, no more time needs to be invested in
improvement. Successful Japanese companies invest up to
15 percent of their timesix to seven hours a weekin contin-
uous improvement. You should plan to do something like this
on an ongoing basis once your initial education is complete.
The initial education should involve the team that leads the
organization, and for an organization of up to 300 people, this
will be between six and ten people. This group needs to under-
stand all the issues discussed in this book and needs to take
ownership of the change process during the initial education
period.
You can accomplish this initial education of the leadership
team with a three- or four-day immersion, which is definitely
the best way. However, many organizations are unable to pull
their senior management out of the business for this long. One
day a week following the agenda in Figure 14.1 enables the
team to start implementing changes as it moves along, and this
also avoids information overload. The downside of the one-day-
a-week approach is that the conversion, and therefore commit-
ment, to quality is not as strong as in the four-day immersion.
Either way, the team must start doing things differently and
demonstrate to the rest of the organization that change is start-
ing to happen. The whole management education should be
lighting the fuse for everyone else in the company.
Use books, including those on CD, to feed the hunger for
knowledge this initial education creates. Avoid heavy books;
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QMT: Education, planning,

and implementation
The leaders of an organization study in detail the principles of
quality and establish a QMT and a quality policy. They define their
roles as members of the QMT and also as managers of a business
function where they will implement quality. They learn in detail how
to manage change in their organization using the change process.
The management team plans to evaluate the cost of waste in the
organization and build a plan for dealing with the wasted resources of
the organization.
Day 1
Introduction Video Leadership in
Course purpose Baldrige criteria quality
and structure ISO 9000 Quality policy
The need for Maturity grid Commitment
improvement The management
Defining quality Leadership team
Delivering quality Managing change Roles and
Improving quality The change process responsibilities
Measuring Capacity to change QMT workshop
improvement Video case study
Day 2
Process ownership Measurement Measurement case
The sequence Fear of study
for continued measurement
improvement Measurement Education
The need for sequence Education and the
process ownership Data collection QMT
Customer Measurement Education plan
workshop tabulation Continuous
Video Action plan improvement
Process flow Measurement system
Cycle time check sheet Work improvement
reduction Measurement system
Key tasks workshop display Managers
Establishing SPC responsibility
requirements Measurement and Problem solving
problem solving Skills workshop
Figure 14.1 A QMT education agenda.
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Day 3
Communication Meetings Cost of quality
Interpersonal Video Cost of waste
communication Teamwork Cost of prevention
Team briefing questionnaire The waste in
Publicity The team leader an organization
Publicity worksheet
workshop Recognition How to use cost of
Networking A recognition waste
Teamwork system method First cutcost of
questionnaire Activities workshop quality
Whom to recognize Continuous
Teamwork How to recognize collection
Team needs Recognition workshop
The QMT workshop
Day 4
Corrective action Problem-solving Continuation
Continuous workshop The need to plan
improvement Corrective action The second cycle
sequence system Celebration day
Three approaches System procedure The new team
to corrective action System flow The new challenge
Goal setting System documents Video
Problem solving Corrective action Planning workshop
Root cause analysis workshop
Selecting solutions
Figure 14.1 A QMT education agenda. (Continued)
a cassette or CD played during the daily commute can act almost

as subliminal learning. Most major books are available on
CD these days, and they provide a good overview before read-
ing the book.
Feed the management team with seminars on the aspect of
quality that will be its specialty, and create an atmosphere of
learning throughout the organization. The education strategy
must flow from the management team out into the organiza-
tion (you could say from the top down). The management
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team must now develop a plan to deploy education on quality

to every person in the organization.
I find most companies do a very bad job in planning their
education, and an even worse job in communicating the plan
to people in the organization. In building the plan, you need to
remember things like vacations and periods of high activity in
the business cycle. Avoid planning education sessions during
high-activity periods, because even if people attend your train-
ing, their minds will be elsewhere. You generally also need to
give people a months notice, and the commercial and technical
people even longer, in order to ensure they will be available.
Planning and scheduling is an art as well as a science, and you
should use the skills of your production planners or operation
schedulers to help the education specialists do the planning.
Most management teams are so hot to trot that they want
to do something immediately once theyve finished their own
education, so use the intervening month to work on your new
systems, like communication, corrective action, and recogni-
tion. Then when the second phase of education arrives, you
will have something concrete to show people. When people
learn skills like problem solving and communication, they will
need enhanced systems within your organization in order to use
these skills.
PROMOTING EDUCATION IN THE

REST OF THE ORGANIZATION
The Oxford Dictionary of Quotations (1941), under Educa-
tion, has a quote from Lord Brougham (sixteenth century),
who allegedly said, Education makes people easy to lead, but
difficult to drive. Education is, without question, the first step
in achieving change in the culture of your organization.
For the rest of the people in the organization to participate in
the change process, they now need to acquire the people skills,
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like communication and teamwork, and the process skills, like

measurement and problem solving. Unquestionably, the most
powerful way they can acquire these skills is by tutoring from
their supervisors. The best way to know your subject is to teach
it; this approach requires supervisors to learn and understand
the new skills, and develops the work group into a team that
can tackle the problems of its own work environment.
The time commitment for this second phase of education
should be about two hours a week in the formal education set-
ting, but each individual should commit another half hour to an
hour a week, either alone or with the work group, to tackling
workplace problems. An agenda I use for this piece of educa-
tion is shown in Figure 14.2.
The critical activity where most failure occurs is in appli-
cation and follow-up coaching between formal education ses-
sions. Just-in-time education means people must work with the
new tools theyve acquired within 48 hours of completing an
education sessionif they dont use it, theyll lose it.
CONTINUING EDUCATION
This whole burst of education will cause you to realize how
much can be gained from a long-term education strategy. Use
this newfound enthusiasm to identify which job skills people
need to develop further.
Lets look at education first. Do you know what you already
know? A basic inventory of your existing skills and knowledge
is a great way to identify the skills, and the level of those skills,
for each process in your business. Which are your problem pro-
cesses, and how will improved skills help?
I usually get a group to brainstorm the question, Which
skills would I like to improve in order to improve service to
my internal and external customers? The areas that most
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Continuous improvement training

All employees require training that is designed to provide them with
the knowledge and skills necessary to improve the way they work.
Sessions address specific stages in solving a problem. Participants carry
out practical exercises, workshops, and assignments on problems they
select. The course content is as follows:
Introduction Why are we here? gives a background in total quality
management and shows the benefits it offers to
employees and the organization itself. This session is
conducted immediately before Session 1.
Session 1 Why work together? looks at the dynamics of
teamwork and what makes a successful team. We
discuss the selection of team members and techniques
for making team participation more effective and
enjoyable.
Session 2 How do we work? looks at the importance of customer
satisfaction and extends the idea to include internal
customers. This leads to process ownership and
understanding our customers expectations.
Session 3 How well do we work? introduces the concept of
prevention. We begin to analyze our work processes
and define our expectations of our suppliers.
Session 4 How can we work better? presents a six-step process to
identify and eliminate problems. In this session we look
at the first four steps, in which we identify the problem,
define the process, put in place a temporary fix, and
identify the root causes of the problem.
Session 5 What do mistakes cost? defines the cost of waste
and those activities that contribute to it. We learn
to calculate this cost and to use the results to gain
management support.
Session 6 How do we eliminate the problem? returns to the
six-step process begun in Session 4. We learn how to
determine all the possible solutions to our problem and
select the most appropriate.
Session 7 Where do we go from here? reviews the quality journey
that we have made since the start of the sessions,
and directs us in planning where we will next use the
continuous improvement process in our work.
Figure 14.2 An agenda for a quality training course for employees.
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organizations have to focus on come as no surprise: time man-

agement, software skills, and listening presentation skills.
You also need to analyze the skill sets required for each of your
work activities. One of the great benefits of an ISO 9000 audit
or your work procedures is that you identify the skill require-
ments for each of the jobs in your business. When youve done
this, an assessment of the skills your people have in hand will
show the gap. This gap analysis provides you with your train-
ing requirements for the short and medium term.
Finally, you need to ask yourself the following questions:
Is there a training plan for the next two to three years?
Does my organization have an inventory or registry list-
ing employee skills?
Is the listing available for management use?
Is there a method for identifying training needs?
Do our training methods suit the audience?
How much time is spent orienting new employees?
Youre probably wondering how much all this will cost. Go
back to your cost of quality calculation and then remind your-
self of that message that seems to be everywhere these days:
If you think education is expensive, try ignorance.
TRAINING AND COMPETENCE

Dictionary.com defines competence as possession of required
skill, knowledge, qualification or capacity. This definition
only lifts the corner of the lid on this issue.
Remember my story at the start of this chapter? Education
is the supply of knowledge to someone. Training is showing
someone how to apply that knowledge. However, we are not
H1320 Merrill.indd 192 3/13/09 4:58:04 PM

there yet. Until I can apply my knowledge skills and ability in a

real world situation, I am not yet competent. The real world
will also involve pressure and stress that can reduce the ability
and hence the competence of a person.
I remember watching a penalty shoot-out in the Euro-
pean Champions Cup (European Football Association). Ten of
the worlds best footballers (soccer players to those in North
America), five on each team, each had to shoot a penalty. The
team with the most scores out of five wins. The odds of miss-
ing a penalty in a normal game are less than 10 percent. This
sudden-death situation created enormous pressure, and some of
the worlds best goal scorers missed their shots.
Cristiano Ronaldo, one of the worlds greatest goal scorers,
had scored a brilliant goal for Manchester United to take the
lead early in the game. He missed his penalty in the shoot-out
and was devastated. We need to be mindful that in a work situ-
ation, people frequently operate under stress. We must work
with them to develop their competence.
This brings us to the next stage: assessing competence.
PERFORMANCE MANAGEMENT
A technique for assessing competence that has been widely
developed in the last decade is performance management. This
ties in closely with the goal setting I described in Chapter 13
and sharing the vision in Chapter 3.
Before I begin, let me warn you not to do this on a quarterly
basis. I fell into that trapno sooner had I finished one set of
reviews than I seemed to be starting the next set. Twice a year
is more realistic.
Use the business plan to drive this process. In that plan,
each department or function has its objectives for the year, and
it is the responsibility of each manager to then set targets for
the people in their department. However, these targets should
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be set in departmental terms and should be arrived at by agree-

ment as individual targets. The training plan and experience
needed are then agreed upon. The half-year review is when
adjustments are made to the training or experience that people
require.
BROWSERS BRIEFING
The ability to learn faster than your competitors may

be the only sustainable advantage.Arie de Geus
Education and training are needed for the job you
already do.
Education and training are needed for improving the
job you do.
The old school paradigm of giving education and
training in large, uniform chunks is not effective for
quality education within business organizations.
Successful education is given on a just-in-time basis.
Leading Japanese companies invest 15 percent of
peoples time in process improvement activity once
theyve completed their initial education.
The management team must be educated first, and as a
team.
Education and training must then be dispersed through-
out the rest of the organization; they are most effective
when they relate to specific business problems.
Feed people with books and CDs.
Education makes people easy to lead, but difficult to
drive.Lord Brougham.
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Supervisors will become team coaches in tomor-

rows organization. They should be trained in how to
be trainers.
Analyze your business processes by evaluating the
skills required to operate them, the skills you already
have, and the gap between the two.
This gap indicates your future training needs.
Remember the saying, If you think education is
expensive, try ignorance.
REFERENCE
Oxford Dictionary of Quotations. 1941. Oxford: Oxford University
Press.
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H1320 Merrill.indd 196 3/13/09 4:58:04 PM
15
Communication
Leadership
Process Education
ownership
Continuation
The most important thing in communication is to hear what

isnt being said.
Peter Drucker
I
n the thirty years between 1966 and 1996, 60,000 words
were added to the English language. Each year one million
scientific articles are published in 40,000 journals around
the world. Media growth has dulled our senses, and the motto
of many news media has become, If it bleeds, it leads. We are
deluged with sensations vying for our attention in a vast sea
197
H1320 Merrill.indd 197 3/13/09 4:58:04 PM

of information. Unsolicited information, both at home and at

work, has become our biggest nightmare.
Most of the time wasters your organization experiences
are the result of poor communication. In Chapter 8 I described
how organizational structure is one of the big barriers to com-
munication. Your span of communication is usually about six
people, but few realize that the depth to which even the best
communicators can penetrate is only three layers of an orga-
nization. Here I mean communication (which includes feed-
back), and not motivation or manipulation. Recruiting people
with good communication skills (not just interview skills)
and developing the skills of your existing employees are two
of the fundamental investments you must make if quality is
going to happen. Developing communication systems is the
other area you must address. Your organizations communica-
tions must be addressed at the interpersonal level in terms of
skills, and at the organizational level in terms of systems. Lets
look at person-to-person communication first.
INTERPERSONAL COMMUNICATION
One of the best organizations Ive come across that special-
izes in communication is the NLP Institute. NLP stands for
neuro-linguistic programming. Over the years, the institute
has used the NLP approach to analyze human behavior. In
its analysis, people communicate through three main chan-
nels: audio (words), visual (images), and kinesthetic (feel-
ings). Different nations and cultures have different balances
of these components. British communication is mainly audio;
they wrap everything in words. Americans are far more visual.
People from Mediterranean nations tend to communicate far
more through their feelings. Do you know the balance of com-
munication inside your own company culture? Do you know
who is a picture person and who is a word person? Accountants
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Chapter Fifteen: Communication 199
are often audio, and designers tend to be visual; perhaps your

salespeople communicate with feelings? The key point is that
until you work with each others channel for messages, your
messages will fly off into infinity, without being received at
their intended destination.
Neuro-linguistic programming is a system for working
with channels other than your ownsending your message in
words, images, or feelings (Laborde 1983). Im British, but I
come from a family of artists and so Im more visual than many
British. My wife was born in North America to British parents
and is very visual, without that British attention to detail. Doing
an NLP calibration exercise helped us understand why Brit-
ain and the United States are two nations separated by a com-
mon language.
If the people inside your organization are going to commu-
nicate more effectively, they need to understand their channels
of communication. Dont just send everyone to a communica-
tion course and think that is all you need to do. Communica-
tion is a practical day-to-day activity that all of us (including
you) have to work to improve. Dont assume you are a good
communicator. You may be good with words, but what are the
messages you send emotionally?
Another area of interpersonal communication you need to
understand and respect is your sixth sense. Gut feeling is impor-
tant, but we have been trained to respect it less and less. Your
sixth sense simply recognizes the messages you receive that do
not come strictly through verbal communication. Albert Mehra-
bian (1971) did work in this area and found that over 80 percent
of the messages we send and receive are nonverbal signals and
signs. Our body language is far more powerful than we realize.
This is work you will need to do on your own or with a coun-
selor, but I can promise you that until you understand your own
communication modes, you will not be aware of the difficulty
you may be causing around you through miscommunication.
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Using Communication Technology

With voice mail and e-mail, it has become much easier to send
messages. The difficulty is that we tend to send more messages
over a wider area rather than focusing on key messages and
ensuring that these are properly understood. I am sure you, like
me, suffer from a crippling overload of junk mail, both from
internal and external sources. Your process analysis from Chap-
ter 10 tells you the critical people you should communicate
with, and you must focus on these targets more accurately. Key
communications need to be written and oral. The written must
be concise (key points only); the oral support then reduces the
paper your receiver must deal with. The blend of fax or e-mail
with voice mail does this as well.
Its no surprise that many organizations have invested much
in communications technology but so few have invested in the
people skills of how to use this technology. I dont mean the
technical skills. I mean the skills for using information systems
to find solutions rather than being a way of dumping problems.
People must know their key customers and send messages in a
way the customers can handle.
However, this written or oral communication is less than
20 percent of the communication that occurs between people.
This is why organizations that put their employees in little
shoebox cubicles with computer terminals experience morale
and communication problems.
Body Language
Nonverbal communication accounts for most of the messages
we send and receive. Body language, as we have come to know
it, tells more about us than we care to realize. Our eyes, our
lips, our shoulders, and our arms tell people what we feel. Our
actions send signals to others. You know that if you tell your
children to clean their rooms, but the rest of the house is a mess,
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they will follow their visual example. What does your office
desk look like at this moment? Its sending a signal to all the
people you work with, and its telling them whether youre in
control of your work processes. (Contrary to what the popular
poster says, a tidy office is not a sign of a sick mind.)
Nonverbal messages are more powerful than you may
realize. I once heard speaker Joe Mancusi talk on the topic of
what makes some people more successful than others. Right
up front, he was clear that telling the truth was the biggest fac-
tor in success. Recall the research by James Kouzes and Barry
Posner cited in Chapter 9: More than anything else, people
want leaders who tell the truth. If your verbal messages dont
fit with your nonverbal messages, people will get mixed mes-
sages. Even if they apparently accept your verbal message,
subconsciously they are unable to do so. Their intuition tells
them something doesnt jive. The nonverbal messages we send
are critical.
Intuition
If you want a book that opens your eyes and stimulates your
feelings, try The Intuitive Manager, by Roy Rowan (1986).
Please understand that I am not for one moment suggesting that
you abandon management by fact. I am telling you that far
more facts are coming at you than you realize, and the more
facts you use, the better you will operate.
Intuition, like so much Ive discussed, is material for
another entire book. However, I do encourage you to learn to
trust your intuition. It is fed by hard facts, as well as by the
body language you receive from others, and its simply pro-
cessed in a high-speed fashion to give you conclusions that
may seem surprising. A well-developed intuition receives the
nonverbal messages, processes them, and feeds the correct con-
clusions to your outer mind. Your challenge is to first develop
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your reception channels and then trust the output from your
intuition process.
The other responsibility your organization has is to provide
channels for communication and time to use those channels.
VERTICAL COMMUNICATION
The Industrial Society is a British professional society dedi-
cated to improving business performance. It has done excel-
lent work promoting a vertical structure for communication
through the technique of team briefing. People who have used
the technique say it has encouraged involvement and partici-
pation throughout their organizations. Team briefing is a sim-
ple and formalized version of what you may already do, but
perhaps on a sporadic basis. The chief executive should brief
their immediate reports (four to eight people) once a month. In
20 minutes the key points of business activity during the previ-
ous month are outlined. Other executives are provided with a
written core brief of no more than a page, and they are respon-
sible for briefing their own staff within the next 24 hours. In a
three-layer organization, you should have communicated with
all your people within 72 hours.
The first key factor in successful team briefing is deliver-
ing the information face-to-face. This gives the nonverbal as
well as the verbal message. Given time, it also creates a better
opportunity for two-way communication. Next, the group size
should be between 6 and 12 people. Smaller groups discour-
age people from speaking, and larger groups dont give people
opportunity to speak. The briefing should be given by the team
leader. Delegating the job tells the team that the information is
not important. If the information is not important, it shouldnt
be in the briefing.
Regularity in the briefing builds trust in the team. The fre-
quency should be tied to the financial reporting of the business,
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and ideally should be monthly. Once that is decided, everyone

should block the date and time for the next six meetings. The
session itself should last about 30 minutes.
The information, in brief, should be relevant to the team and
to the individuals in that team. Two-thirds of the brief should be
local information; the remaining third is the core brief about
the larger organization. Team briefing leads to better knowledge
about important issues, less misunderstanding, more credibility
for the team leader, and better linkage of the team to the organi-
zation as a whole.
Finally, monitoring the results of the briefing ensures that
any shortcomings in the briefing can be eliminated. Local infor-
mation should always be double-checked before the briefing.
Having another member do the briefing with the team leader
sitting with the team can lead to improvement ideas. Check-
ing with individuals after the briefing identifies shortcomings.
People are happy to listen when the information is relevant and
the session is well run.
As the briefing becomes expected throughout the organiza-
tion, it will develop into a channel where messages flow up as
well as down. Team briefing cannot be the only tool or tech-
nique; it must be used alongside improved interpersonal skills
and the other important communication tools.
HORIZONTAL COMMUNICATION
Networking already happens in your organization, but the out-
put from networking sessions is probably not used to benefit
the organization. Im thinking of the lunchroom conversation.
We all joke about things overheard at the water cooler, and
when a group travels or eats dinner together, the exchange of
information can be very powerful.
Team briefing improves vertical communication, but remem-
ber that communication within our internal customer/supplier
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chain is horizontal. Networking must contain horizontal com-

munication. And because networking is often left to chance, you
need to provide regular networking opportunities to take out that
random element. There is a whole chapter on networking and
the different types of networks in my book Innovation Genera-
tion (2008).
The barrier you are attacking here is often called the for-
tress mentality. Departments, in their eagerness to build team
spirit, unknowingly build fortress walls against and even com-
pete against other departments that are their own customers or
suppliers.
I used to run a manufacturing facility for a business that
also had a chain of concession shops in major retail stores.
I remember the first time we mixed the retailing and manu-
facturing supervisors. The results were electric, and the inter-
change of ideas was phenomenal. The manufacturing people
were given new ideas on packaging, and the retail people had
their eyes opened to new product possibilities they had never
thought about before.
Another type of networking involves bringing together
people from different parts of the organization who do simi-
lar work but rarely meet. Your annual sales meeting is a good
example of this. Now let your mind run laterally and apply
the idea of the sales meeting to department supervisors or
to operators or clerks from different parts of the organization.
Dont just throw them together, though. Provide a framework,
an agenda, a structure.
PROVIDING COMMUNICATION TOOLS

People need good communication tools to use within the sys-
tem and the environment youve created. Identify the special
communication channels that you want to strengthen. Philip
Crosby advocated a tool he called the Error Cause Removal
memo. To quote his words, Workers have great difficulty in
H1320 Merrill.indd 204 3/13/09 4:58:04 PM

communicating to management those things which stop them

from doing a job right the first time. Sadly, too few have
understood Crosbys words about this delicate but important
communication tool; many people have installed a corrective
action tool instead of a method of communication.
Simple-to-use toolsthe telephone, faxes, and e-mails
for communicating recognition are also important. Chapter 17,
Recognition, will describe the Bravogram, created by Bob
Latham at Bell Mobility. This method of supporting and encour-
aging recognition was a powerful communication tool in the
company.
Remember to use these tools within a properly designed
communication system where interpersonal, vertical, and hori-
zontal communication have all been developed.
BROWSERS BRIEFING
Poor communication is the primary cause of failure to

deliver on customer promises.
Organizations must be designed to enable effective
communication.
Individuals must be recruited with or trained to have
good communication skills.
Individually, we need to be aware of which is our pri-
mary channel of communication: audio (words), visual
(images), or kinesthetic (feelings).
Verbal communication accounts for less than 20 per-
cent of the communication between North Americans.
Simply providing a high-tech communications system
will not improve communication. People need to learn
the art of using these systems.
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When people can freely tell the truth, and also have the
courage to hear the truth, organizations communicate
more effectively.
Intuition provides individuals with a lot of nonverbal
communication, but it is rarely trusted.
Structured briefing of all persons in an organization
enhances the outward flow, and also the feedback, of
information.
Horizontal communication must be fostered along
the lines of process flow of the business as the quality
organization develops.
The organization must provide a framework and tools
to facilitate communication, whether it is notification
of problems or thanking someone for a solution.
REFERENCES
Laborde, Genie Z. 1983. Influencing with Integrity: Management
Skills for Communication and Negotiation. Palo Alto, CA: Syn-
tony Publishing.
Mehrabian, A. 1971. Silent Messages. Belmont, CA: Wadsworth.
ity Press.
Rowan, R. 1986. The Intuitive Manager. Boston: Little Brown.
H1320 Merrill.indd 206 3/13/09 4:58:04 PM

16
Teamwork
Leadership
Process Education
ownership
Continuation
No one of us is as good as all of us.
Ray Kroc
B
y age 30, most sensible people have given up playing
extreme physical sports. But readers who have played
a team sport, like rugby, will have made some lifelong
friendships from the game and will still thrill at the poetry and
flow of teamwork on the field. I was never a rugby star, but like
so many who engage in a sport or hobby while growing up, I
played for the love of the game.
207
H1320 Merrill.indd 207 3/13/09 4:58:04 PM

At 30 years old, when many of my peers had switched to

weekend gardening, I was still playing rugby, and my club
asked me to captain one of the teams. I was both honored and
panic-stricken. I had no leadership experience in either work or
sport, and I could only barely get my place on the team through
ability. I still visit the Davenport Rugby Club whenever I return
to England, and I thank the club for the opportunity it gave me
to learn about leadership and teamwork.
Leadership and teamwork are two areas of quality that are
inextricably intertwined, and the three years I spent captain-
ing the Davenport Dukes taught me more about leadership than
any MBA course ever could. Too often teamwork in the quality
context is a theoretical activity. Its either a classroom activity
or a team-building game.
When I took the job, the Dukes were losing every game
and few people wanted to play. I knew from being a team
member that, more than anything else, the players hated play-
ing short (with a player missing). They felt beaten even before
they started. That first year we didnt win too many games, but
we never played short. I knew that the one thing I could give
the team was a full playing side, and I worked myself into the
ground doing that. A better team would rob us of a key player
on a Friday night or even on a Saturday morning, but we never
gave up, and we never played short. The players recognized
this, and by the second year they were prepared to stand down
as reserves for the Dukes some weeks because there were so
many who wanted to play. By the end of two years, the team
had been nicknamed within the club as Merrills Marauders.
Ask yourself what you can give your team. Before you
became a leader, what did you, as a team member, want from the
leader? Was it short, well-run meetings? Concise paperwork?
Help in problem solving? Give your skills to your people, and
they will come together as a team.
I was good at organizing the Dukes, but I wasnt the side-
stepping running-back type the team craved. I certainly didnt
H1320 Merrill.indd 208 3/13/09 4:58:04 PM

Chapter Sixteen: Teamwork 209
understand forward play. On the field, I gave the running of the

forwards to a bearded mountain of a man named Andy Altree
and the running of the backs to an Irish wizard named Brendan
Webb. These two stalwarts called the shots in the minute-to-
minute tactical moves, and I took orders from them as the game
unfolded. Each knew his part of the game far better than I did. I
played on the wing, which was the perfect position to view the
strategy of the game. I stress that I didnt do this out of mana-
gerial enlightenment; it was practical necessity. My role was to
plan the strategy of the game.
Take time to identify the skill areas that your team members
possess and take time to develop the needed skill areas. If you
give this to your people, they will give back your investment
many times over. You cant be the leader in every situation, so
learn to share the leadership role. As Ray Kroc of McDonalds
said, No one of us is as good as all of us.
One thing that everyone on that Dukes team knew was that
if anyone ever dropped the ball, the last thing he needed was a
barrage of groans from the rest of the team. That player would
know that he had let the team down. I once played for a captain
who would humiliate his players in front of the rest of the team
(and in front of the opponents). We all realized that encourage-
ment and building peoples belief in themselves were the way
to eliminate bad play. That doesnt mean a team of wimps; it
means a team of people who tackle hard, run hard, and fight the
opposition and not themselves.
THE TEAM
What are the principles on which your team operates? Do you
encourage each other or do you argue regularly? Do you talk
honestly and openly with each other or are there hidden agen-
das? Are your meetings concise and to the point, or do you
wallow around being nice and avoiding the truth?
H1320 Merrill.indd 209 3/13/09 4:58:04 PM

The foundation for all good practices is trust and respect.

Trust and respect come slowly and are often built after hours.
A big part of the Dukes team building came in the bar after the
game. We learned about each other, became friends, and built
trust. You can try complex analyses of everyone in the organi-
zationor you can simply give everyone the opportunity to
understand how the rest of the people on the team behave and
what makes them tick.
There are two general routes for building trust within the
team. The first is activity oriented and gives a visible sense
of achievement. The second is exploratory and gives people
a chance to discover their respective frames of reference in a
relaxed environment.
Im deeply involved in ASQ, the worlds largest organiza-
tion devoted to quality improvement in all walks of life, from
kindergarten to the boardroom. The membership and leader-
ship of each chapter are entirely voluntary, but everyone draws
from the greatest source of quality knowledge that you could
ever hope to find.
One summer, the executive of the chapter to which I belong
conducted a strategic planning session that was led by David
Luke, a lecturer from Queens University in Kingston, Ontario.
David started the session by pointing out that we, the people in
the planning session, did not know each other. I suddenly real-
ized how different a voluntary organization is from a business
organization. We met each other once or twice a month and
didnt even know which side of the city we all came from. David
paired us off and asked us to discuss our background with our
neighbor, and to say what we most wanted to achieve in life. Our
neighbor then had the task of telling our individual story to the
rest of the group. The hour we spent doing this built the most
remarkable understanding among us all.
We were increasing the overlap in our frame of reference
by discovering what we had in common, and building our
mutual trust and respect. When you know where someone was
born and grew up, where they went to school, and what their
H1320 Merrill.indd 210 3/13/09 4:58:04 PM

activities and goals in life are, that person then takes on a third
dimension and ceases to be merely a cardboard cutout. This
builds trust and understanding between you.
Riding the Rapids as a Team

I recall my first experience with the activity-oriented approach.
When I was a chief executive with Courtaulds, I, along with
a group of 20 executives, was sent to a two-week leadership
development course at Clemson University in South Carolina.
In the middle of the course, we were all taken into the Georgia
mountains for an activity weekend.
Wed heard rumors about the Chattooga Rivers whitewa-
ter, and someone mentioned that the movie Deliverance had
been filmed on the stretch of water we would be experiencing.
We stayed Friday night in a log cabin in the woods, and I was
sufficiently impressed by the rumors to ensure I had an early
night. Unlike some of the group, I decided to avoid late-night
drinking at a country music bar.
The next day, we woke at 6 a.m. and drove to a simple
southern shack, where we were served a last breakfast of ham
and eggs over easy, home fries, and grits. You must realize that
for simple English boys, these words were totally foreign, and
the food even more so. By now, we had discovered that people
had actually died on the Chattooga River. What we were unsure
of was whether it was the whitewater or the grits that caused
their demise. The tension was rising, and no one was prepared
to admit they were chicken.
Feeling like condemned men whod eaten a hearty last break-
fast, we set off for the river. Upon arrival, we were split into
groups and introduced to our guides. I remember my first feeling
of security when our group met Rolie, the bearded athletic giant
who was to guide us through the perils that lay ahead.
His first instruction was to wet our feet and feel the river.
As we climbed into the river raft, which would be our home for
the next four hours, we admired the magnificent calm of the river
and the wonderful tree-lined shore. We moved slowly with the
H1320 Merrill.indd 211 3/13/09 4:58:04 PM

current, and as we rounded the first bend, we began to hear a

small roar. Rolie shouted strict orders: Brace your knees on the
side of the raft, and if you fall, fall inwards! We were approach-
ing the first of the rapids, and the advice seemed very sensible.
It must have happened in seconds, and yet it seemed to last
a lifetime. We traveled at incredible speed between predatory
outcrops of granite, which seemed poised to tear us apart and
consume us without a trace. But then it was over, and we were
again in calm water.
Our group looked at each other. We were intact, and the
feeling of exhilaration was indescribable. One person yelled,
another screamed. The tension had been released, or had it?
We had a sense of achievement, but then we heard another roar,
and this was only a few seconds away. We focused, we worked
together with our paddles, and we attacked the next set of rap-
ids with a determination that would make rocks tremble.
We progressed down the river for the next two hours, tack-
ling one hazard after another, until we finally got a break and
a chance to bask in the sun on the rocks. I lay there, reflecting
on what had been happening, and realized how the group in our
raft, with its common goal in the face of adversity, was start-
ing to become a team. We were not the best collection of ath-
letes that day, but we were helping each other, listening to each
other, trusting each other. Rolie was clearly the leader, with his
incredible strength and technical knowledge of the river. John,
who before today had been the flippant wiseacre, had become
serious and focused. Duncan, who seemed to be a withdrawn
thinker, had become a tower of strength in our raft. Ron, always
the talker, was the steady, reliable influence, and I was finding
myself caring that we worked together as a team.
After our half-hour break, we climbed back into our fragile
raft to tackle the second half of this angry river. In a few min-
utes, we were going to discover what a real team will do.
We had been told about Fourteen Foot Falls, the most treach-
erous stretch of the whole river. As we dropped what seemed
H1320 Merrill.indd 212 3/13/09 4:58:04 PM

like 20 feet from the top of the falls, Ron lost his balance and
started to fall toward a rock called Deliverance. We pulled him
back, not for a moment thinking whether we were risking our
own stability. We werent going to lose a team member. At the
bottom of the falls, we went underwater hanging onto Ron, and
then finally we emerged, very wet but very together.
We were the only team that day who did not lose someone
in the Chattooga River. Our feeling of exhaustion and achieve-
ment when we finally floated across Lake Tugaloo to the shore-
line was the feeling that real teams have. I still have our team
photo from the end of that day. That experience welded us
together in a way that is hard to describe. Working together for
that common goal built a trust and respect among the team and
a pride in achievement that would be hard to destroy.
All this is about team building. You have to do this first.
You dont have to ride the Chattooga River, but you do need to
do something to give your team a sense of achievement and a
better understanding of each other.
The next challenge is team operation, along with the activ-
ity that wastes the most time in any organization: the meeting.
THE MEETING
The meeting is the ultimate focus of all team activity. Its where
you come together to set your teams objectives, and plan how
you are going to achieve those objectives. Meetings are also
one of the greatest causes of wasted time and frustration in
nearly all organizations. Most of this waste occurs because we
dont plan and organize our meetings, and everyone assumes
someone else is going to do the planning and organizing.
Its worth taking a moment to get clear on why we have
meetings, and the factors that cause meetings to succeed or
fail. Most organizations have a meeting when something
goes wrong. You need to ask yourself whether your meeting
is proactive or reactive. We often avoid the proactive meetings
H1320 Merrill.indd 213 3/13/09 4:58:04 PM

because we havent got time or because meetings are such bad

experiencesthe less of them, the better. This leads to far more
reactive meetings later and tends to develop an inner thinking
in people that all meetings are problem-solving brainstorming
sessions that get us out of todays crisis.
Getting back to those basic values of quality, we must be
clear on what output we require from a meeting, establish the
input requirements from the participants, and apply preven-
tion to the process by developing the skills, facilities, and pro-
cedures for the people involved in the meeting. Continuous
improvement of the meeting process is driven by the partici-
pants (or process owners) measuring the performance of the
meeting. We must also overlay these principles with a preven-
tive reason for holding a meeting, and make our reasons proac-
tive instead of reactive.
Putting these abstract ideas into practice means first identi-
fying why we are having a meeting. If it is a crisis-driven reason,
we must make one of the outputs of the meeting an action that
will prevent this meeting from being held again. If its not crisis
driven, then we are committed to planning ahead, and each per-
son coming to the meeting needs to know the objectives of the
meeting and what inputs they must bring. Im reminded of Bob
Bayette of ICI Paints, who said after six months in the quality
process, The biggest change experienced in the organization
was that people no longer arrived at meetings saying Whats
this meeting about?
This means maintaining calendar integrity with your meet-
ings (no last-minute changes) and issuing the agenda with spe-
cific requirements for each item (generic agendas ought to be
banned) at least three days before the meeting (more if you
need it).
A meeting is held so that people can communicate informa-
tion quickly and concisely. Once you have more than eight or
nine people in your meeting, it is in danger of changing from a
meeting to a conference.
H1320 Merrill.indd 214 3/13/09 4:58:04 PM

The attendees all bring unique experiences and perspec-

tives to a meeting. They must be able to speak with the author-
ity of the department or activity they represent, and they must
be committed to the objectives of the meeting. However, you
need other components along with the technical or process
elements of the meeting.
The team should have a blend of thinkers and doers. If you
have a group of great idea people but no one to put those
ideas into action, youll have the common cause of failure for
so many technical committees, who deliberate for months and
talk shop but dont implement. On the other hand, if you have
a team thats all action people, its like having a football team
without any coaching staff. None of the moves are properly
thought through, and jobs are duplicated or overlooked.
There is a third magic ingredient for a successful team. An
old school colleague of mine, Peter Savage, wrote a book titled
Who Cares Wins (1987). You must have people on your team
who care about the team, providing missing items like coffee
and donuts and other equally vital special equipment, as well as
looking out for anyone who seems isolated and bringing them
back in. Some would call this the mothering of the team.
This caring should be shared among the team members.
Figure 16.1 shows a questionnaire your team members can
complete. The questionnaire is reproduced from an excellent
video called Teams and Leaders (1990), based on the work of
Peter Honey. Its well worth knowing whether your team has
a good balance of people or whether you are all leaders, fight-
ing each other for control of the team. When youve finished
the questionnaire, use the score key shown in Figure 16.2 to
evaluate your individual profile as a team member. Take care
when you complete the score key: The scores are to be entered
in a different sequence than the questions themselves.
Having defined the outputs (objectives) and inputs (people
and information) for your meeting process, you should next
focus on the process itself. With the right inputs, you create
H1320 Merrill.indd 215 3/13/09 4:58:04 PM

Teamwork Questionnaire
This short questionnaire will help you discover your style when working
in groups or teams. Throughout the questionnaire, imagine yourself as a
member of a small group or team of six or so people. Simply read each
item and decide as honestly as you can whether you often, sometimes,
or rarely behave in the way described. Indicate whether it is often,
sometimes, or rarely in the appropriate box beside each item.
Often Sometimes Rarely
1. I go out of my way to encourage
people in the group.
2. I am inclined to get impatient with
people who beat around the
bush.
3. I urge the group to stick to
plans and schedules, and meet
deadlines.
4. When there are different opinions
within the group, I encourage
people to talk their differences
through to a consensus.
5. I can be counted on to contribute
original ideas.
6. I use humor to ease tensions and
maintain good relationships.
7. I seek common understanding
prior to making decisions.
8. I listen carefully to what others
have to say.
9. I avoid getting involved in conflicts.
10. I can quickly see what is wrong
with unsound ideas put forward by
others.
11. I openly communicate the whys
and wherefores of a situation.
12. I am always ready to back a
good suggestion in the common
interest.
Figure 16.1 Teamwork questionnaire.

Source: Teams and Leaders video, trainers guide (London: Melrose Learning
Resources). Reprinted by permission.
H1320 Merrill.indd 216 3/13/09 4:58:05 PM


13. I tend to put forward lots of ideas.
14. I draw people out whenever I
sense they have something to
contribute.
15. When things arent progressing
well, I push ahead and get the job
done.
16. I develop other peoples ideas so
they are improved.
17. I tend to change my mind after
listening to other peoples points
of view.
18. I tend to seek approval and
support from others.
19. I dont mind being unpopular if it
gets the job done.
20. I actively seek ideas and opinions
from other people.
21. I am a friendly person and find
it easy to establish good rapport
with others.
22. I am careful not to jump to
conclusions too quickly.
23. I am good at noticing when
someone in the group is feeling
aggrieved or upset.
24. I enjoy analyzing situations and
weighing alternatives.
25. I can work well with a very wide
range of people.
26. I have a reputation for using a no-
nonsense call a spade a spade
style.
27. I like to feel Im fostering good
working relationships.
28. I tend to be forceful and dynamic.
Figure 16.1 Teamwork questionnaire. (Continued)
H1320 Merrill.indd 217 3/13/09 4:58:05 PM


29. I like to anticipate probable
difficulties and be prepared for
them.
30. I press for action to make sure
people dont waste time or go
around in circles.
31. I can usually get people to agree
on a course of action.
32. When people have second
thoughts, I urge them to press on
with the task at hand.
33. I like to ponder alternatives before
making up my mind.
34. I tend to be open about how Im
feeling.
35. People sometimes think Im being
too analytical and cautious.
36. In discussions, I like to get straight
to the point.
37. While Im interested in all views,
I do not hesitate to make up my
mind when a decision has to be
made.
38. Flippant people who dont take
things seriously enough usually
irritate me.
39. I am able to influence people
without pressuring them.
40. I am able to think things through
before doing something.
H1320 Merrill.indd 218 3/13/09 4:58:05 PM

How to Score and Interpret Your Questionnaire

The questionnaire is designed to reveal your teamwork style and indicate
which of the four roles you are best suited to. The four roles are:
Leader Making sure that objectives are clear and agreed on and
that everyone is involved and committed.
Doer Urging the team to get on with the task at hand.
Thinker Producing carefully considered ideas and weighing and
improving ideas from other people.
Carer Easing tensions and maintaining harmonious working
relationships.
Which role or roles are you best suited to? It is possible that you are
an all-arounder, equally at home with each of the four roles. Most
people, however, have a role that fits best with their style, and
another one or two roles that they can utilize if need be.
To score your questionnaire, indicate on the columns on the previous
page which items you thought you did often or sometimes. Do not
indicate items you marked as rarely done.
The maximum score for each role is 20. Your highest total score
indicates the role you are best suited for. Your next highest indicates
your backup role or roles. Low scores, say of 9 or less, suggest you
are not comfortable with that particular role or roles. If your scores
are all around the 15 mark, while you may prefer one or two roles, it
suggests you are flexible enough to adopt any of the four roles.
the magic of synergy in your meeting when, through trust and

respect and overlapping frames of reference, the whole becomes
greater than the sum of its parts. You move fast, you dont argue
over small things, and team morale is outstanding.
Obstacles to Effective Meetings

I can hear you say, This guy is in fantasy land; our meetings can
never be like that. Obstacles to successful meetings arise because
of lack of preparation, but in order to eliminate the obstacles, we
must first recognize them. Obstacles lead to wasted time and
frustration, so theres a real incentive to get rid of them.
H1320 Merrill.indd 219 3/13/09 4:58:05 PM

H1320 Merrill.indd 220
Item Often Sometimes Item Often Sometimes Item Often Sometimes Item Often Sometimes
1 2 5 6
4 3 10 9
7 15 13 12
8 19 16 17
11 26 22 18
14 28 24 21
20 30 29 23
31 32 33 25
37 36 35 27
39 38 40 34
Total of items marked Total of items marked Total of items marked Total of items marked
often often often often
2 = _______ 2 = _______ 2 = _______ 2 = _______
Total of items marked Total of items marked Total of items marked Total of items marked
sometimes sometimes sometimes sometimes
Grand total _______ Grand total _______ Grand total _______ Grand total _______
Leader Doer Thinker Carer
Figure 16.2 Teamwork questionnairescoring.
3/13/09 4:58:05 PM
Badly designed agendas (and not sticking to agendas,

regardless of how good they are) are the biggest cause of fail-
ure in meetings. Its just like any other process in your busi-
ness: You need a procedure to be followed in the meeting. Have
a specific agenda rather than a generic agenda, and issue it in
time for people to prepare for their part of the meeting.
The next biggest problem is the other type of agenda: the
hidden agenda. Having a well-designed agenda ahead of time
enables the team to be ruthless about hidden agenda items. For
those of you who havent experienced the hidden agenda, it
comes from one or two individuals at a meeting having objec-
tives different from those of the team and not revealing their
objectives to the team. They usually try to disrupt the meeting
by introducing unexpected information or some other crisis to
throw the team off track and then steer the team away from its
objective. This is the worst disease a team can experience, and
it must be stopped at its first symptoms.
Finally, the minutes of your team meeting must be lean
and mean. They should just list decisions and actions, and they
should never contain who said what to whom. No one ever
reads that stuff. One page of minutes is the most you need for
one or even two hours of a meeting.
VIRTUAL MEETINGS
The globalization of business means our team can often be spread
around the planet. We cant always be traveling to a physical meet-
ing, so we are increasingly using the tool of virtual meetings.
As with any process, there is an upside and a downside. The
upside is that we reduce the cost and time of a team project. The
downside is that virtual meetings require much more prepara-
tion and structure, and the tools or technology for Web-based
communication need to be understood by all participants.
I do a lot of Web-based cost of quality training for ASQ, and I
can tell you that my early experiences were pretty nerve-racking.
H1320 Merrill.indd 221 3/13/09 4:58:05 PM

The technology was still in its infancy when I first used it. But
now, with practice, I am very comfortable with this medium.
Your team needs to practice the tools and techniques of
Web-based or virtual meetings before you throw the members
into a mission-critical meeting. Your team also needs to under-
stand the language of your Web meeting provider. That lan-
guage is often strange and written by geeks. Your team needs
to understand how to use text chat, and the meeting leader or
facilitator needs to understand the concentration span of team
members.
Virtual meetings dont have all the communication channels
of a face-to-face meeting, and so communication bandwidth
in virtual meetings is much narrower. Think of Bandwidth
as the amount of knowledge that flows between people. This
means sessions are more intense, more concentrated in time,
and more stressful. As a result, there must be ground rules and
special discipline for virtual meetings in the team. As with a
normal meeting, there needs to be balanced participation of
all team members and documentation of all actions and deci-
sions. However, both of these are more difficult in a virtual
context.
Work splits into group work and individual work. Group
work includes activities such as brainstorming, achieving con-
sensus, idea development, reviews, and updates. Individual
work is execution of action items, but this is within the terms
of consensus of the group.
As a member of a virtual group, it is essential to listen far
more carefully and be constructive when challenging an idea.
After a meeting, work with the decisions and execute action
items. A sample agenda might look like this:
Review of action items and status of individual work
Brainstorming activities and generation of new ideas
Development of work products
H1320 Merrill.indd 222 3/13/09 4:58:05 PM

Consensus generation
Assignment of actions
Performance measurement becomes far more important in vir-
tual meetings, and this should be at the end of every session.
You can see that the rules are the same as those for a normal
meeting; they are just more intense and need to be enforced
more rigorously.
PARTNERING EXTERNALLY
As business models change and we see the need for more agile
organizations, we are increasingly forming external partnerships
or teams where some members are from our own organization
and other members are from an entirely different company.
Failure rates in this type of collaboration are very high.
The reason for failure is that we focus on a financial and legal
agreement but pay no attention to the way the other organiza-
tion does things. You will recall from Chapter 4 that Deal and
Kennedy described culture as the way things get done around
here. Take time to understand the behaviors and processes
of the other organization. If you have ISO 9000, you have an
internal audit team (see Chapter 22). Use the team to assess
the management system and ask whether you are picking the
right partner before you set up your joint team. In Chapter 20
I explain the eight principles of ISO 9000, and one of these
is Mutually Beneficial Supplier Relationships. This recog-
nizes that for long-term success, both parties must benefit from
working together.
Understand the decision-making process and the correc-
tive action process in the other organization. If you set up an
arrangement where there are winners and losers, the losers will
lose interest very quickly, and you dont want losers on your
team in any case.
H1320 Merrill.indd 223 3/13/09 4:58:05 PM

These days our management system must operate in a busi-

ness ecosystem. You want a friendly ecosystem for your com-
pany to succeed. My book Innovation Generation (2008) goes
much deeper on the topic of collaboration and networking.
You can use measurement to drive improvement in your
meeting process. The check sheet in Figure 16.3 is amazingly
effective in telling you how to improve your meetings. As you
Evaluating your meetings

One of the best ways of driving improvement is to measure
performance. This meeting evaluation sheet will help you do this.
All participants should complete the sheet and send the result to the
chair or administrator. Keep score at the next meeting.
Meeting evaluation Yes No

1. Was a clear agenda circulated beforehand?
2. Did the meeting start at the stated time?
3. Did everyone arrive before the meeting
started?
4. Did more than half the people speak?
5. Did you complete the agenda with all actions
settled?
6. Did you give adequate time to all items?
7. Did the meeting end on or before the agreed
time?
8. Did the meeting help you in your work?
9. Did everyone get a minutes/action list within
24 hours?
10. Did you deal with all the top priority items?
Score one point for each yes answer.

03: You wasted a lot of peoples time.
46: Par for the course; tackle the weak points.
78: Quite good; congratulate the organizer.
910: Exceptional; this meeting was a model to follow.
Figure 16.3 A meeting evaluation questionnaire.
H1320 Merrill.indd 224 3/13/09 4:58:05 PM

get better, refine the check sheet and change the questions to be
more specific and to drive continuous improvement.
Chapters 1316 have been about changes in peoples behav-
ior. The critical component in endorsing this change is recogni-
tion, which is the subject of Chapter 17.
BROWSERS BRIEFING
Teamwork skills need to be developed in a practical

(not theoretical) environment.
Good leadership and good teamwork are inextricably
linked.
A good leader looks out for the needs of the team, not
just for their own needs.
Build trust among team members by helping them
overcome failure and by rewarding success.
Understanding the backgrounds of other team members
and providing training in interpersonal communication
skills build trust and respect.
Give a team a challenging but nonthreatening nonwork
environment in which to operate. This will build trust.
Have team members discover whether they are doers,
thinkers, or carers, in order to better understand their
roles on the team.
Meetings are the focal point of team activity and need
to be managed with great care.
All team members need to know the rules of your
meetings, and you should all evaluate the effective-
ness of your meetings, in order to drive meeting
improvement.
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As with most activities, meetings succeed with good

preparation.
Virtual meetings are more difficult to manage than
face-to-face meetings and need even more structure
and planning.
REFERENCES
ity Press.
Savage, P. 1987. Who Cares Wins. London: Mercury.
Teams and Leaders (video). 1990. London: Melrose Learning
Resources.
H1320 Merrill.indd 226 3/13/09 4:58:05 PM

17
Recognition
Leadership
Process Education
ownership
Continuation
Appreciate those who participate.
Philip B. Crosby
S
ome time ago, I was conducting an executive seminar
with the board of Bell Mobility, the cellular phone divi-
sion of Bell. Just before lunchtime, we had been involved
in a deep discussion about recognition, and in particular the
power of peer recognition.
We broke for lunch, and as the vice presidents split into
informal groups and chatted, the president, Bob Latham, walked
227
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purposefully toward me. He looked quite moved and was quite

intent about our discussion.
He explained to me how the discussion about peer recog-
nition had reminded him of the time, nearly 30 years previ-
ously, when he was an undergraduate and a member of the
football team at Queens University. It had been near the end
of the season, and the team was out on the field practicing.
He had captained the team that year, and they had had an
exceptional season, winning nearly all of their games. A num-
ber of the players were going on to play in the NFL and the
CFL, and would become great stars. This was a measure of
the teams success.
As Bob practiced passing and catching with the team, one
of the late arrivals ran over to him and asked, Have you seen
the notice board?
No, replied Bob, blankly.
Youve been elected Players Player for the year!
Nearly 30 years later, as president of a major organization,
he still recalled the thrill that he felt with that news. He said, with
great passion, It is something I will remember all my life.
The power of recognition is something that too many com-
panies overlook, and the reason for recognition is what few
understand. Philip Crosby summed up what recognition is all
about when he said, Appreciate those who participate.
RECOGNITION REINFORCES CHANGE

If you want to change the values and culture of your organiza-
tion, recognition is the most powerful way of reinforcing the
new behaviors the organization is seeking. Peer recognition is
even stronger, and it is the voice of everyone in the organiza-
tion saying, You did a great job.
You want to change from the values that say firefighters
(who are actually the arsonists, remember?) will be rewarded,
to values where people who consistently do it right the first time
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Chapter Seventeen: Recognition 229
are recognized. You want to change from a value where sitting

on the status quo keeps people out of trouble to one where you
recognize those people who are continuously improving their
work processes and are willing to take risks.
You have to start recognizing people who conform to cus-
tomer requirements and are honest with the customer, instead
of congratulating people who slipped something nonconform-
ing past the customer when it didnt get noticed.
You need that clear picture, or vision, of the organiza-
tion you are seeking to create, then relentlessly recognize the
behaviors that you want to happen. Harvard Business School
professor Rosabeth Moss Kanter wrote an excellent article on
recognition, in which she said, People see pay or salary as a
right. They see recognition as a gift.
This is so true. We dont recognize people by giving them
money. They just respond by saying, I must have just done
my job! When you say thank you in special ways, they think,
I did something special; Im going to do that again. Other
people see the recognition as well and naturally emulate the
behavior that has been endorsed.
However, to make recognition part of your culture, you
need to decide at the outset what new values and behaviors
you will endorse. Where most go wrong is in believing that
you simply throw recognition to the newly empowered com-
munity of the organization. Surprise, surprise, recognition
becomes hokey and devalued without a well-designed strategy.
The recognition strategy has to be linked to the vision, culture,
and values discussed in Chapters 3, 4, and 5.
The leadership team must decide the specific values it wants
to endorse, and then recognize the behaviors that are based on
these values. If bad housekeeping has been a major problem,
then recognize good housekeeping. If late meeting starts are a
problem, then recognize meeting chairs who start on time. If
you see a problem getting people to do meaningful measure-
ment, then recognize it.
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Recognition of your good practices must be supported by

the rest of the people, and this is where the leadership then starts
to draw in everybody else, collecting ideas on which bad prac-
tices must be eliminated and which good practices should be
endorsed. You cant recognize everything, so decide what is impor-
tant. Your list will be different from that of other organizations.
You wont be able to measure every new behavior, but try
to quantify success as much as possible and remove subjectiv-
ity. In Chapter 16, we saw the meeting evaluation sheet. Use
this to measure who runs the best meetings and youll see that
the chair is being evaluated by the peer group.
This brings us back to peer recognition. Without question,
the more you build this into your recognition system, the more
you make change reach across the organization. You just saw
the word system for the first time, and perhaps you are thinking
this is a cold and calculating procedure. Actually, it is a fun and
happy activity, but above all, it must be seen as fair by every-
one in the organization. Thats why you must give everyone
a system to work with. If you create the system, spontaneous
recognition will grow naturally.
DEVELOP A SYSTEM
You must be systematic in developing recognition:
Identify the values you want to endorse in your culture,
for example, conformance to requirements, prevention,
process improvement, and respect for the individual
Define the behavior you want to see that was not there in
the past and that support these values, for example:
Good housekeeping
Sticking to procedure
Delivering reports on time
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Attendance
Punctuality
On time to meetings
Participation in teams
Suggestions
Notice these are things anyone can do.
Measure performance of new behavior, but make it mea-
surement by a group and not subjective, for example,
meeting evaluation
Now we come to the controversial part. How do we recognize
the new behaviors? Remember the words of Rosabeth Moss
Kanter, that people see payment as a right and recognition as
a gift. Its like finding a present for a good friend. Does this
person like books? Is this person the sporting type, or are they
more domestic? Just because you like going to smart restaurants
doesnt mean that they will. Show you care by tailoring the rec-
ognition to the person, such as in the following examples:
A book on a subject that interests them; could you get it
signed by the author?
A box of golf balls monogrammed with the persons name.
A picture or memento for the home with a small Thank
You plaque on it.
If it is a meal out, give them something tangible as well
that they will keep as a memento: a set of silverware,
monogrammed wine glasses, and so forth.
What you dont want to do is give them an envelope with a
check in it. Thats just a bonus on the monthly paycheck. The
downside is that all of this means time and effort and actually
caring about other people. What sort of culture did you say you
wanted?
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These high-profile recognitions are the special items. They

set the tone, but it is the day-to-day recognition that you want
to happen just as much. Letters of recognition are the most
powerful and memorable things people can receive. Being
mentioned in a dispatch, to use the old military term, is some-
thing you should always remember for your team. I recall a
letter I received years ago from a boss I had at the time, Bruce
Townsend. I was 3000 miles from home, in the mountains of
West Virginia in the middle of February, commissioning a
chemical plant. It was tough, and Bruce took the trouble to
write, rather than phone, and commend me. I could have han-
dled anything from grizzlies to guns after that letter, and I con-
tinued to be prepared to travel anywhere in the world for that
company. As an aside, he used a line in the letter that Ive never
forgotten: The worst thing about experience is getting it!
Youve had letters like this one at some time in your career,
and if youve ever had your name mentioned in the dispatches,
you remember how that made you feel. So, as the saying goes,
do unto others as you would have them do unto you.
Staying with the idea of the thank-you letter, more about
Bob Latham at Bell Mobility. Bob gave all the people in his
organization the tools for the written thank-you. They all had a
pad of Bravograms on their desk. If someone did something
thoughtful or helpful for you, you had a Bravogram at your
fingertips that you could give to that person to express your
thanks (see Figure 17.1). Philip Crosby did the same thing in
his organization, and I remember seeing how people felt on
receiving simple thank-you notes. Dont forget to give people
the tools as well as the framework for recognition.
Finally, you need to spend some time and effort looking
at your basic pay and salary system. So many organizations
design an excellent recognition system but are mystified as to
why behavior doesnt change. If you continue to pay people
according to the old set of rewards, such as sales bonuses based
on revenue, and not according to quality, you will see that the
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Bravogram!
To: Pat
Thank you for getting the monthly

finance report here before
lunchtime. Because of your prompt
efforts, I have an extra half day
to work on the analysis and can
produce the more detailed version
that was requested.
Regards, Chris
Figure 17.1 An example of a

Bravogram.
salespeople will continue to deliver revenue and not quality.

Redesigning your basic pay system will need careful thought,
and you should get an expert in the field to help you once you
know what you want to reward.
Recognition is one of the most powerful activities in the
change process. You need to treat it seriously, but you can also
make it fun.
BROWSERS BRIEFING
Recognition is the way to reinforce the behaviors you

want to encourage in your organization.
Having the people of the organization, and not just the
leadership, perform this recognition makes it all the
more powerful.
Behaviors are based on values. You need to be clear on
the values you want to endorse.
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People see pay or salary as a right. They see recogni-

tion as a gift.Rosabeth Moss Kanter.
As much as possible, you should measure behavior
performance.
Make the recognition memorable and appropriate to
the individual or team.
Invest time up front in researching and developing
forms of recognition. (Remember benchmarking.)
The recognition system must be consistent with your
salary/reward system.
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PART VI
The Continuity
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18
Continuation
Leadership
Process Education
ownership
Continuation
Those that fail to learn from history, are doomed to repeat it.
Winston Churchill
T
he title of this book, Do It Right the Second Time, clearly
implies learning from experience. Unfortunately, busi-
ness culture has shifted in the last decade to one where
there is less and less desire to analyze our failures and an
increasing tendency to walk away from them.
If your organization is project driven, there must be a les-
sons learned at the end of each project. If it is process driven,
237
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238 Part Six: The Continuity
there must be at least an annual, but ideally quarterly, review of

successes and failures.
Entering a quality process is similar to running a marathon.
If someone you know has run a marathon, ask them what hap-
pens around 18 miles. Runners call it hitting the wall. It is a
physical and psychological phenomenon in which they feel that
they have stopped moving forward. The effects are devastating.
Runners prepare for the experience by eating huge quantities of
pasta and other high-carbohydrate foods before the race. Car-
bing up gives them extra reserves to get through the physical
part of the wall. Preparing for the psychological part of the
wall is more complex. The physical preparation is part of the
psychological solution, but talking to other athletes and find-
ing out about their experiences is also necessary. The runner
needs techniques to strengthen mental powers and, above all,
to keep remembering the successes achieved so far. Youve come
18 miles; there are only 8 to go. Think positively.
The principles are the same in a quality process. The energy
to get through the wall must come from constantly feeding
people knowledge and training to deal with their process chal-
lenges. The psychological strength comes from knowing what
the successes have been and then quantifying those successes.
Dont rename your quality process. If you feel like youre strug-
gling, remember that renaming your quality process is like
renaming your child after they come out of the terrible twos.
Dont rename your process. You are probably now thinking of
focusing on one particular area, such as process management or
teamwork or ISO 9000. Make it clear that you are focusing, and
the other activities you have started will continue on as ever.
At first sight, a surprisingly large number of businesses
enter their quality processes without a plan. As you look closer,
you realize that its not easy to plan for something youve never
done before. Hindsight is 20/20, and a year later, so many com-
panies say, We wish wed planned things better; we didnt
realize how much time would be needed.
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Chapter Eighteen: Continuation 239
A second area where companies can run into trouble when

they make a plan is that they make their quality improvement
plan distinct from their business plan. When you make your
business plan, the sales or customer budget is the driving force.
When you make your quality improvement plan, the customer
must be the driving force. The plans may be separate initially,
but they must ultimately be merged into one business plan, after
the first year of your quality initiative at the latest.
PLANNING THE IMPROVEMENT PROCESS

So how do you plan for something youve never done before?
Its a bit like starting up a new business where you havent yet
got your first customer: You havent developed the new prod-
uct, but you know youve got a winning idea. One of the first
things you do is look at other people. Talk to them about their
experiences, ask them what theyve learned, and try to learn
from their mistakes. It is a wise person who learns from their
mistakes; it is a genius who learns from the mistakes of others.
Try to be a genius.
Youre truly looking at a start-up situation if it is your first
time, but if youre trying to do it right the second time, you
need to go back and look at how much time and money and
how many people have been involved in activities so far.
First-timers: Make sure you keep really good records of
time, money, and people involved in the quality process. This
way, you will be much more accurate in your next planning
cycle. Remember, you plan and manage quality in the same
way you manage your finances. So its really like keeping
expense receipts and supplier invoices.
The first thing to be planned is the vision and values activ-
ity. This work may be done in a weekend if your thoughts are
well developed, or it may take several months if you really
want to go back to basics. Lets assume the vision and values
activity is done over a period of about a month, and this has
H1320 Merrill.indd 239 3/13/09 4:58:06 PM

followed your initial self-assessment, using a first cut on your

cost of quality.
If you look back through the preceding chapters, the ten
elements of the change process have a flow to them; but
perhaps you are unsure about how much time it will take to
develop and implement each element. A good way to regulate
your activity in the early stages is to link it to your education
plan. This is where the importance of just-in-time education
starts to show. To give you a picture of how things will unfold,
glance again through the timeline in Figure 18.1, then Ill talk
you through it.
J F M A M J J A S O N D
Leadership
Process
ownership
Measurement
Education
Communication
Teamwork
Recognition
Cost of
quality
Corrective
action
Continuation
High-profile
Development Continuity
activity
Figure 18.1 Implementation timeline.
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You can see that during the first three to six months, edu-
cation (4) gives you a well-defined structure. However, dont
think of it as education; think of it as a well-defined use of the
tools of quality. So if this structure keeps you on track, why not
continue with the well-defined use of the tools of quality after
this initial education phase is completed? If you are restarting
your quality process, then use your earlier education program
to give this definition or structure to your restart. Use your man-
agement education to revisit the systems you designed that may
not be working satisfactorily, and use a facilitator or consultant
to keep you on track.
Your employee education will probably have consisted
of training in the use of process management tools and the
development of teamwork and communication skills. Use this
framework to tackle what you now know to be the process and
people problems in the organization.
The start-up (or restart) phase of your quality improvement
plan should begin with the leadership (1) commitment through
your policy statement. The information from the first cut of
cost of quality (8) and the mapping of business process flow (2)
should be used to initiate mapping of problem processes. Wide-
spread measurement (3) will probably commence after three to
four months, and after six to nine months, you should be ready
to feed measurement data into your system for continuous cost
of quality (8) collection. It is the cost of quality system that
drives your corrective action (9) system, and you should have
been process-proving your corrective action system during the
three-to-nine-month period. Once the cost of quality system is
in place, you can link it to the corrective action system.
You will see that in parallel with developing your process
management system, you need to be developing your communi-
cation (5) and recognition (7) systems, and teamwork (6) skills
will be coming up to speed in time for full-scale operation of
your corrective action (9) system.
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It is often after this initial start-up phase, driven by system

design and intense education, that the quality improvement pro-
cess starts to fade. The driving force was enthusiasm and evan-
gelism, and the business leader typically turns the other way
after nine months, thinking everything is self-sustaining. The
next nine months show a steady decline, and everyone wakes
up after eighteen months to discover the process has stalled
(see Chapter 24, The New Organization).
Enthusiasm and evangelism are important, but they alone
will not drive the quality process. The customer has to be the
driving force, and your long-term quality improvement plan has
to be driven by the customer. All we have done so far is to make
ourselves capable of being driven by the customer. We must
continually work on this capability. Dont assume that if you
reach a certain capability you will automatically maintain it.
DRIVING THE QUALITY IMPROVEMENT PLAN

The quality improvement plan has to be driven by the current
and future requirements of your key customers. In Chapter 2, I
described a planning session with LePage Adhesives. This com-
pany identified nearly 20 different interfaces for one apparent
customer. You should build a matrix like the one in Figure 18.2,
which shows key clients by market segment. For each client, list
the moments of truth, or client interfaces.
Rate your performance at each point in the matrix. Score out
of 10 possible points, or if youre just feeling your way here,
score out of 4. Avoid scoring out of 5; youll have too many 3s!
When youve identified the most critical interfaces with the
poorest performances, look objectively at how the competition
is doing and identify which of your business processes need to
be improved to give the customer the performance they want.
Benchmark your business processes against those of competi-
tors, or even against customers and suppliers who have similar
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Market #1 #2 #3
Client ACE BOB CAD DAC ELF FX GEC HO IBF
Inc. Inc. Inc. Inc. Inc. Inc. Inc. Inc. Inc.
Buyer
President
Invoicing
A/C Payable
Receiving
Technical
Miscellaneous
Figure 18.2 A moment of truth matrix.
but better-performing business processes. Xerox Corporation,

recognized as an initiator and leader of benchmarking, mea-
sured its processes against the following companies:
L.L. Bean: telephone response
American Express: invoicing
Ford: manufacturing layout
General Electric: robotics
This is the point at which you can now set your quality goals.
Also, this is usually the point at which the leadership loses
touch with the rest of the organization.
Goal setting is like budgeting, and those who will achieve
the goals should be involved in setting the goals. The tricky
part is in identifying the resources neededthe time, money,
and people requiredto meet your quality goals.
THE OLD ENEMY: TIME

You are looking to invest your time and energy to improve your
business processes and achieve a payback for both you and your
customer. Cost of quality will provide some of the return, but
H1320 Merrill.indd 243 3/13/09 4:58:06 PM

the big payoff is seen through increased customer satisfaction.

If youre losing between $1 million and $3 million per year out
of every $10 million of operating costsor if people are wast-
ing 1015 hours per week reworking, handling complaints, or
just plain finding out the factshow much are you prepared
to invest in people, time, and money to reduce this waste? Ive
already indicated that many Japanese companies are investing
15 percent of their time, or six to eight hours a week, on con-
tinuous process improvement.
Most companies I work with feel so crisis ridden and cus-
tomer driven at first that they cant think of sparing one hour
a week to improve their customer service and product. Your
initial quality education will probably take two to three hours
a week. I have seen many companies reach the end, breathe a
sigh of relief, and say, Thank goodness; now we can get back
to business as usual. Instead, keep that momentum and con-
tinue to invest that time every week in continuous improvement
activity. A senior person might invest 10 hours per month as
follows:
QMT meetings 1 to 2 hours
Departmental quality
meetings 2 hours
Individual quality work
with staff 2 to 3 hours
Work alone on process
improvement 2 hours
Cross-functional corrective
action team 2 hours
Total Approximately 10 hours
Compare this with:
Lunch 20 hours (per month)
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And other individuals in the organization would budget their

time differently:
Department quality meeting 2 hours
Individual quality work with
1
a manager 2 hour
Work alone on process
improvement 2 hours
Cross-functional corrective
action teams 5 to 6 hours (per month)
You can see that the manager needs to be looking at more than
10 hours a month and that 15 hours a month, or 34 hours per
week, is probably more realistic.
It is critical to budget your time investment as well as your
money investment. You then need to make decisions as to
where you are under-resourced, either in numbers of people or
in skills, and make decisions on obtaining external resourcing
in consulting, training, or other services.
You must set challenging goals, and you must be clear on
the return you expect over the next year, two years, and five
years. You can see how this whole process starts to integrate
with the strategic planning for your whole business.
Measuring your process (assessment) is an important part of
continuation, and in short, you need to think about continuously
improving your continuous improvement process. You will recall
that measurement (or assessment) is the driving force for process
mapping. You now need a method for assessing this plan and the
quality process, and this is the subject of Chapters 1922.
Achieving momentum requires the early win, which was
described in Chapter 7; maintaining momentum requires some
form of recognition of the organization (see Chapter 17) and not
just the individual. ISO 9000 or your state or national excellence
award provides this recognition in the short to medium term. In
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the long term the measurable improvement objectives you set

in your quality improvement plan drive the continuation.
A word of warning: Do not become totally internally
focused. Step out of the box and start thinking about tomor-
rows customer. I will talk about this in Chapter 24 when I
introduce you to innovative thinking.
BROWSERS BRIEFING
People pursuing the quality process can hit the

wall, just as a marathoner often does around the
18-mile mark.
Breaking through the wall requires preparation: giv-
ing people the knowledge and training to meet their
challenges.
Its not easy to plan something you havent done
before, so look at how other people have done it.
Record your successes and failures as well as time,
money, and people usage during the first year (and sub-
sequently) so that you can continuously improve your
continuous improvement.
Initially, your quality improvement plan may be sepa-
rate from your business plan, but they must eventually
be merged.
Build a timeline for each element of the change process.
In the early stages, most of your activities will be struc-
tured around your education, so use this as the defining
element.
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Design of quality systems, such as cost of quality, cor-

rective action, communication, and recognition, will
also be defining factors.
The quality improvement plan and your business plan
are driven by the requirements of your customers,
which is why the two must merge.
Careful recording of time invested in your quality
activities will enable your future planning to be more
effective.
You should evaluate the effectiveness of your quality
improvement plan.
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H1320 Merrill.indd 248 3/13/09 4:58:06 PM
19
Using the Baldrige Criteria
to Assess Quality Systems
Excellence, then, is not an act but a habit.
Aristotle
I
n the early 1980s, U.S. industry was being taken to the
cleaners by the Japanese, and the secretary of commerce,
Malcolm Baldrige, saw the need for a government initiative
to strengthen the competitive edge of business. This was at a
time when President Ronald Reagan was reducing government
involvement in all aspects of national life. However, Baldrige
shared with Reagan a common interest in horse riding, and
Baldrige used these opportunities when they rode together to
persuade Reagan to adopt a government initiative.
The U.S. National Quality Award was developed by bringing
together businesses such as IBM and Xerox, consulting prac-
tices such as Philip Crosby Associates and the Juran Institute,
and professional associations such as ASQ. Together they built
a methodology for assessing the quality maturity of organi-
zations. Today it is generally recognized as the most compre-
hensive form of organizational assessment ever developed.
Sadly, Malcolm Baldrige, the prime mover in this devel-
opment, was killed in an accident just as the work was near-
ing completion. As a tribute to his drive and initiative, the
U.S. National Quality Award was named for him when it was
249
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first given in 1987. The Baldrige Award is managed by the

National Institute of Standards and Technology and adminis-
tered by ASQ. The award was restructured for its tenth anni-
versary in 1997, with a goal of providing a better systems
perspective for performance management.
A company that embarks on a journey of quality improve-
ment needs to have a plan. The Baldrige assessment process
measures the effectiveness of a companys quality improve-
ment plan. The action plan guides the overall direction of the
company to ensure customer satisfaction and market success.
The system is the means for delivering on that plan.
CATEGORIES OF THE BALDRIGE CRITERIA

The Baldrige Awards Criteria for Performance Excellence
look at a companys quality system in seven categories:
1. Leadership
2. Strategic Planning
3. Customer Focus
4. Measurement, Analysis, and Knowledge Management
5. Workforce Focus
6. Process Management
7. Results
Figure 19.1 gives a graphic depiction of how these elements
relate. First, the system must be management driven, and Cat-
egory 1, Leadership, assesses how a company is led along its
quality journey. However, this leadership has to be customer
driven, as you can see from the position of Category 3, Customer
Focus. The leadership must create a Strategic Plan, Category 2, to
achieve the customer satisfaction that leads to business success.
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Chapter Nineteen: Using the Baldrige Criteria 251
Organizational profile:
environment, relationships, and challenges
2 5
Strategic Workforce
1 Planning Focus 7
Leadership Results
3 6
Customer Process
Focus Management
4
Measurement, Analysis, and Knowledge Management
Figure 19.1 Baldrige Award criteria frameworka systems

perspective.
The deployment of the strategic plan is achieved through

the balanced development of the Workforce Focus, Category 5,
and Process Management, Category 6. This balance between
people and processes has been the focus of Parts IV and V of
this book. A Baldrige assessment will cause you to see the need
for improvement from a strategic perspective, and you may well
endorse some of your cost of quality findings, such as poor
communication.
Another method of assessing your organization is through
ISO 9000. I have seen a look of horror on the faces of those who
have tried to read the International Standard on Quality Man-
agement. Company presidents give up quickly and dump the
document on the poor quality manager. However, your favorite
and biggest customer may say to you that in two years time,
it will stop buying from you if you havent become ISO 9000
registered. You can use the ISO 9000 audit as a way of assess-
ing your organization at a more basic level than Baldrige.
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Sadly, many organizations miss the value of the ISO

standards at the start. They see them as an unnecessary cost,
requested by an unreasonable and even inefficient customer.
They fail to see that ISO assessment can give real insight into
the opportunities for improvement inside an organization.
Teamed up with process improvement, it can become a power-
ful force to drive business improvement. Well revisit ISO 9000
in Chapters 20, 21, and 22.
Assessment of your organization using cost of quality anal-
ysis, Baldrige criteria, or ISO 9000 will tell you at the outset
where improvements are needed and how big your opportunity
is. Later on, assessment will be the driving force to continu-
ously improve your continuous improvement process.
Well first look at Baldrige assessment, examining each
category of the performance excellence criteria in more detail.
Leadership (Category 1)
At the outset, the criteria ask how the leaders lead the com-
pany and develop their own leadership. If executives (the top
people in the organization) only make speeches and hand out
awards, this category will be scored very low. Do they seek
out new business opportunities for the company? What are
the values or principles on which the leaders operate, and do
they communicate these values? Are their actions based on the
quality values of the organization? If the organization has a
value of conforming to customer requirements, do the lead-
ers themselves conform to the internal and external customer
requirements in their daily activities? This quickly reveals
whether leaders are doing more than merely talking a good
game. Which business processes are they measuring? What
personal development do they undergo each year? What per-
centage of time is spent on these things? Actions speak louder
than words.
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The other action that is evaluated is whether leaders com-

municate these values to organizations outside the company and
to the community. Is the company involved in the community
in which it operates, or is it just an isolated island? This can
mean involvement with professional bodies, charitable organi-
zations, or community organizations. Are people told to do
this, or does the company support this activity? Is the company
genuinely outward-looking? How does the company evaluate
its impact on the community, from the product or service it
delivers to the operation of its facilities or processes?
In Category 1, a company can score a maximum of 70 points
out of the total 1000 points. A typical organization might score
30 or 40 points here.
Strategic Planning (Category 2)

Category 2, Strategic Planning, must be shown to be developed
by the leadership as a result of listening to market needs. As we
get deeper into the next categories, we will see the importance
of linkage between each of the categories.
The maximum score for Strategic Planning is 85 out
of 1000 points. It is critical, as it is linked to both Customer
Focus (Category 3) and Leadership (Category 1). Strategic Plan-
ning must also be shown to be based on management by fact
(Category 4, Measurement, Analysis, and Knowledge Man-
agement) and involvement of people (Category 5, Workforce
Focus), and to depend on capable processes (Category 6, Process
Management).
The key issue here is that Strategic Planning must be inte-
gral with the business plan and not a superficial component.
This category is a core category.
The whole planning process has to be shown to be customer
driven, which is what happens with a good business plan anyway.
But preparing the plan is not enough. You must show how the
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plan is deployed in the organization, how resources are drawn

in to make the plan happen, and how progress is monitored.
Figure 19.1 shows a linkage across to Categories 5, 6, and 7.
The strategic plan must contain projections for the next
two to five years. It must show the strategies for achieving the
objectives, together with the resources that will be required.
The longer-term objectives need to show the significant
improvements in performance that will be achieved, and com-
pare these with the main competitors performance. A properly
constructed plan with the right inputs produces Results (Cat-
egory 7), which have not occurred by accident.
Customer Focus (Category 3)

The Customer Focus category, worth 85 points, is primarily
about how you communicate with the customer. How do you
identify customer requirements, both now and for the future?
These requirements need to be understood for each market seg-
ment, and the collection process has to be clearly defined. The
process for determining the relative importance of requirements
must also be defined, and both of these processes must be the
focus of continuous improvement.
Customer relationships through telephone, letter, and personal
contact need to be both outgoing and incoming. Customers need
to be contacted in the important after-sale period to establish satis-
faction. Customer communication must be effective, and the tech-
nology to enable the best customer contact must be provided.
In the event of customer dissatisfaction, how are these
problems resolved, and more importantly, how is the customer
feedback used to drive process improvement and skills develop-
ment? How is the information drawn together and analyzed? At
the same time, how does the company ensure that complaints
are resolved promptly? All of the information produced by cus-
tomer contact must be analyzed to enable Strategic Planning
(Category 2). This leads us conveniently into the next category.
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Measurement, Analysis, and Knowledge

Management (Category 4)
Category 4, Measurement, Analysis, and Knowledge Manage-
ment, is about measurement and about managing the knowledge
asset that is created. How do you determine what to measure?
Are the things you measure important to the customer, do you
use the knowledge to drive improvement, and are you systematic
in selecting your measurements? This category embraces all the
other categories in the framework and counts for 90 points.
We talked a lot about measurement in earlier chapters, and
the examiners will look at how you choose what to measure. A
lot of companies measure everything, but when you ask what
they do with the information, they say, It goes into a report.
Your primary measurement must be in marketplace perfor-
mance and must occur at the primary impact point, or moment
of truth with the customer. You should then be measuring at
key points back up the process chain to ensure that your internal
processes are under control. You need to select the critical few
points at which to measure. The measurement itself must be
objective, and measurement data are notorious for being sub-
jective. How many times do you hear, The customer doesnt
know what they want?
There is an important ring of truth here. Customers will tell
you where you are going wrong, but they often cant tell you what
delivery time they really need, or what type of service they require,
simply because they dont know the capability of your processes.
Having selected what you are going to measure, the next ques-
tion is how to ensure that the method of measurement is accurate.
This links back to objectivity. We all know how unreliable those
hotel happiness sheets arethe customer is asked for feed-
back, but the feedback does not come from a representative pro-
file of clients. In manufacturing, calibration of the data collection
instrument is the critical issue. If you are collecting information
reliably, are you then delivering it to the people who will act on
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the information? Or is it going into those unread reports? How

do you know what is a good or bad result in your measurement?
Are you benchmarking your processes against similar processes
in other organizations you recognize as best of breed?
Finally, having got the information, what do you do with it?
This is the crunch. How is the information analyzed, and then
how are the results compared with your projections?
Once you identify the need for change, how do you make it
happen? You need a systematic approacha corrective action
system, a cost of quality system, and a knowledge management
system. And how about a system for improving your systems?
Clearly, data are a critical input to your strategic plan, but
remember to keep a balance between process and people as you
deploy that plan.
Workforce Focus (Category 5)

The items addressed in Category 5, Workforce Focus, include
work systems; employee education, training, and development;
and employee well-being and satisfaction. This category has a
lot of issues, and it scores 85 points.
You need to show that you are planning your people require-
ments over the next two to five years to show linkage to Strate-
gic Planning (Category 2). You must also show how you plan to
develop the people you already have. Not surprisingly, this plan
has to be supported by hard data, not by guesstimates.
Having set your plan, how do you involve the people? Do
you encourage teamwork? Do you have a communication sys-
tem? Do people own their processes and make decisions, or
do you still have a hierarchy of babysitters? Do you encourage
initiative? Again, how do you measure the involvement?
As people become more involved and your organization
thinks further ahead, your educational needs will grow. How
do you assess these needs, and how do you measure the exist-
ing skills and knowledge? How do you analyze the gap, and
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how do you close it? You need to have a plan for delivering
quality education and training not just to new people but to
people in existing jobs where their processes may be changing
more rapidly. Not surprisingly, measurement of this activity is
essentialnot just measurement of what you give people, but
measurement of how effective the delivery is.
In this changing environment, weve already seen the impor-
tance of performance measurement, which gives people feed-
back on how they are doing, and recognition, as confirmation
of that feedback. The assessment will evaluate these areas.
If youre doing these things the right way, the effects on
your employee education and morale should be significant.
You should also be looking at health and safety issues and
work environment; these, of course, feed back into strength-
ening well-being and morale. This whole quality business is
about change, continuous change. How do you equip people
to handle change? Yet again, how do you measure their morale
and well-being?
The output of all these efforts is products and services
that meet customer requirements, and these lead into Process
Management.
Process Management (Category 6)

Process Management looks at how you design your products
and services, how you control your delivery processes from
initial request to final receipt, and whether you measure the
effectiveness of these processes and continuously improve
them. Do you keep records of both how to operate processes
and how they perform in operation? All these principles need to
be applied to your business or administrative activities as well
as your operations; none of them will be fully effective unless
you also use these principles in your dealings with your suppli-
ers and business partners. The content of this category is worth
up to 85 points.
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Whether you are talking hard product or service product,

the principles are the same. And if youve done ISO 9000 work,
youll find that this whole category will come a lot easier.
It all starts with design and ensuring that the customers
requirements become part of the design, not conveniently
ignored. Your design should be within the capability of your
operation to produce, and within the capability of your suppli-
ers to be a resource. The whole design function should be the
focus of continuous improvement activity and also be subject
to continual reduction in cycle time.
Once you are clear on what the customer wants, you must
have processes that are capable of delivery, and this capability
must be assessed by measurement. If the evidence from mea-
surement shows processes are not in control, you need to have
a methodology for root cause analysis. And you also need to
evaluate the reliability of your measurements!
The natural outcome is to then improve the process, using
the data from measurement. You need to show that you have
the process in place, including a methodology to show which
processes you have selected for improvement.
The organizations systems, processes, practices, and prod-
ucts need to be assessed internally, which will be routine for
ISO 9000 registered companies, and the information from these
assessments will be used for process measurement. Recording
of procedures and results is another routine activity for ISO 9000
registered companies, but this recording should also be the sub-
ject of continuous improvement. All of this activity is normally
applied to operational activity, but it also needs to be applied
to business processes, such as finance, marketing, personnel,
legal, and purchasing.
Supplier quality is the last area to be addressed in this cat-
egory. Too many companies ignore their suppliers in process
management. You must show evidence of clear communication
of requirements to suppliers, and auditing of suppliers own
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processes. You must show evidence of development of suppli-

ers and partners, and a clear strategy in supplier and partner
selection and development.
This takes us to the last Baldrige category, the final out-
come of the organizations effort: Results.
Results (Category 7)
The Results category scores 450 points, the biggest by far. This
is where you show the results of your efforts, and the linkage of
cause and effect must be clear. You will achieve a high score only
if you can show that the results are linked to the activities in cat-
egories 16. Many companies have good quality results through
good luck. This wont suffice, because good luck and bad luck
wash out in the long term. This category must also show a link-
age to Category 3, Customer Focus. Good quality results are
relevant only if they are results that matter to the customer.
The actual measurement of customer satisfaction and mar-
ket share needs to focus on individual customer groups and
then be compared with levels achieved by competitors. Further
comparison with customer complaint data should be used to
validate data. Positive trends in customer satisfaction must also
be shown.
Your quality results must also be compared with those of
your main competitors. Market share, business growth, and
marketplace performance must show how you fit within the
big picture. Financial performance identifies the enterprises
return on economic value. Digging deeper into your organiza-
tion, you must also show results in employee development, and
this will link to Category 5, Workforce Focus. You need to show
improvement in your organizational effectiveness and supplier
and partner performance, and again compare these results with
your competitors performance.
Finally, Leadership and Social Responsibility results address
issues of governance and ethics. These key performance
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indicators will show after two or three years of effort. This is

why your organization must be managed by fact, in order to
produce results that are not just good luck. This takes us back
to Category 4, Measurement, Analysis, and Knowledge Mea-
surement, which is the foundation for all other categories in the
Baldrige criteria.
CRITICISM OF THE BALDRIGE FRAMEWORK

There is no question that the Baldrige assessment is extensive,
comprehensive, and exhaustive. You finish with the feeling
that no quality stone has been left unturned. The exhaustive
(or exhaustion) aspect has often caused criticism. The 1997
revision reduced the number of individual business areas to be
addressed from 52 to 30.
Criticism also comes from people who feel nomina-
tions should be made by customers and not by the potential
winners themselves. Some people think the criteria are too
internally focused and insufficiently customer focused.
However, 535 of the 1000 points come from the Results and
Customer Focus categories, and these can only come from
happy customers.
Other criticism comes from the lack of financial analysis
of a companys performance; many cite the difficulties expe-
rienced years ago by the Wallace Company after winning the
award. Financial results are now an item in the Results category.
Baldrige Award winners are expected to serve as advocates for
the award during the year after winning. Small companies like
Wallace have difficulty finding the resources to do this without
adversely affecting the running of the business.
The other major change in the 1997 Baldrige guidelines was
a strong shift toward strategic thinking and systems thinking.
Having said all this, the Baldrige Award framework is still
the benchmark when it comes to assessment of quality improve-
H1320 Merrill.indd 260 3/13/09 4:58:06 PM

ment processes. Nevertheless, it can be intimidating for begin-

ners in qualityone reason many turn to ISO 9000 as a more
basic way of assessing an organizations quality activity. This
is the subject of Chapter 20.
BROWSERS BRIEFING
It is imperative to measure the effectiveness of your

quality plan.
Assessment using the Baldrige Award criteria is the
most comprehensive method available.
The Baldrige approach has seven categories on which
it assesses an organization: Leadership, Strategic Plan-
ning, Customer Focus, Workforce Focus, Process Man-
agement, and Results, all supported by Measurement,
Analysis, and Knowledge Management.
Organizations score up to 1000 points, depending on
their quality maturity.
Reactive organizations may score around 400 points.
World-class organizations score in the 800-point range.
Leadership needs to show that it listens to the customer
and practices quality in its daily actions.
Strategic Planning is directly linked to Leadership and
to Customer Focus.
Customer Focus demonstrates a companys knowledge
of the market and its system for determining and com-
municating customer requirements.
Measurement, Analysis, and Knowledge Management
need to show that you manage by fact and also that
you carefully choose what you will measure.
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Workforce Focus covers a wide range of issues, includ-

ing work systems; employee education, training, and
development; and employee well-being and satisfac-
tion; it needs to be planned for the coming two to
five years.
Process Management analyzes how you see your prod-
ucts through from start to finish.
The Results category includes customer and financial
results as well as human resource, supplier/partner,
and Social Responsibility results. These results must
be shown to come from the business plan created by
the leadership, having listened to the customer. Happy
accidents do not score well.
The Baldrige framework is comprehensive, but for
some it may be too much. ISO 9000 is often used as a
starter kit for companies just beginning in quality.
REFERENCE
Institute of Standards and Technology, U.S. Department of Com-
merce. 2008. Malcolm Baldrige National Quality Award: Criteria
for Performance Excellence.
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20
ISO 9000: How to
Make It Happen
Experiments with young children show they learn System

Thinking very quickly.
Peter Senge (The Fifth Discipline)
I
SO 9000 was majorly revised for the year 2000, and yet old
habits die hard. People with no previous experience imple-
menting ISO 9001 have had a much easier time with the stan-
dard than people who previously worked with ISO 9001:1994.
They dont have old history to deal with. In 2008 some minor
revisions clarified the text, but there were no new requirements.
The revisions are primarily in the form of notes. With that in
mind, Im going to emphasize what you should not do as much
as Im going to emphasize what you should do in implementing
the standard.
As a member of the international committee (TC176) that
wrote the ISO 9001:2000 standard, I will share with you some
of the thinking and philosophy of leadership that went into
the standard. As someone who has advised organizations in
manufacturing, construction, insurance, health care, and dis-
tribution in implementing the standard, I will identify some of
the issues their leaders have had to address: planning, resource
allocation, measurement, and continuous improvement.
263
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THE STRUCTURE, THINKING,

AND DYNAMIC
The eight principles on which ISO 9000 is based are found
in paragraph 0.2 of ISO 9000. It is essential to read the 9000
document in order to understand ISO 9001. These principles,
which form the basis for ISO 9000, are:
A successful organization is customer focused, and the
leadership creates direction and an environment in which
the people become involved to achieve the organizations
objectives.
A process approach and a system approach to manage-
ment of the organization ensure efficient use of resources
in order to achieve objectives.
Continual improvement is achieved through a factual
approach to decision making, and mutually beneficial sup-
plier relationships ensure the best customer value is created.
The first reading of the standard can mislead a reader into
thinking that the standard repeats the old standard. This is a
fatal error. ISO 9000 today is structured in the way that an orga-
nization operates. It is based on the Plan-Do-Check-Act cycle.
The dynamic of the standard is best expressed with an extract
from ISO 9001:
Plan-Do-Check-Act (PDCA)
Plan: Establish the objectives . . . in accordance with cus-
tomer requirements
Do: Implement the processes
Check: Monitor and measure processes . . . and report the
results
Act: Take actions to . . . improve process performance
Figure 20.1 shows the cycle in this framework for the standard.
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Chapter Twenty: ISO 9000: How to Make It Happen 265
Leadership
(Management
Responsibility)
Objectives are set,
responsibilities allocated,
and achievement monitored
so that resources can be
reallocated.
Measurement,
Analysis, and Improvement
Resources Management
The points where risk
The finite resources of
exists are monitored, from
the organization; skills,
customer, through
equipment, and services
operations, back to the
are allocated and
supplier. Data are collected
maintained.
and analyzed to drive
improvement.
Operations
(Product Realization)
Operations from receipt
of customer order through
design, procurement,
manufacturing, and service
delivery are planned and
controlled.
Figure 20.1 The PDCA cycle in ISO 9000.
Leadership involvement in planning and setting objectives

becomes imperative not just at a functional level but also at a
strategic level.
The driver for this quality system should be the customer,
not the registrar. Customer satisfaction measurements lead-
ing into process measurements are the drivers for continual
improvement both in the organization itself and in the products
and services it delivers to its customers.
Taking the dynamic I just showed you, the elements of the
standard are structured as shown in Figure 20.2.
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5. Management
Responsibility
-5.1 Management
Commitment
-5.2 Customer Focus
-5.3 Quality Policy
-5.4 Planning
-5.5 Responsibility, Authority,
and Communication
-5.6 Management Review
8. Measurement, Analysis,
and Improvement
6. Resources Management -8.1 General (Planning)
-6.1 Provision of Resources -8.2 Monitoring and
-6.2 Human Resources Measurement
-6.3 Infrastructure -8.3 Control of Non
-6.4 Work Environment Conforming Product
-8.4 Analysis of Data
-8.5 Improvement
7. Product Realization
-7.1 Planning of Product
Realization
-7.2 Customer Related
Processes
-7.3 Design and Development
-7.4 Purchasing
-7.5 Production and Service
Provision
-7.6 Control of Monitoring
and Measuring Equipment
Figure 20.2 The ISO 9001 requirements.
THE APPROACH FOR SYSTEM DEVELOPMENT

A good approach for developing the quality management sys-
tem follows three phases: planning, system development, and
system assessment.
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Planning
1. Gap analysis
2. Business process map
3. Quality plan (functional objectives)
4. Quality statement (strategic objectives)
System Development
5. The objectives (or policy) manual
6. Quality system procedures
7. Operating procedures
8. List of records and forms
System Assessment
9. Internal audit
10. Processimpro vements
11. Registrationa udit
12. Continualimpro vement
I will briefly describe these steps now, system development more
fully in Chapter 21, and the system assessment in Chapter 22.
Gap Analysis
Without question you should start with a gap analysis. A gap
analysis identifies what the standard asks for and where you
may have gaps but just as importantly identifies the fit between
your existing business activity and what the standard asks for.
A gap analysis must involve the leadership of your organiza-
tion, given that this is a business standard.
The next thing we do is map the business.
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The Business Process Map

The business process map is not a job for a quality manager; it
is a must do for the leadership.
Husky is one of North Americas leading manufacturers
of injection molding equipment. The leadership mapped the
organizations business process as part of the quality system
development, and the improvement opportunities they found
were immediately owned by the leaders. The finished map is
almost of secondary importance to the fighting and biting
that go into producing the map. Have someone take notes, as
this will be one of the most important meetings your leadership
will have. Figure 20.3 shows a finished business process map.
The Quality PlanFunctional Objectives

The quality plan is built from the process map by assessing risk.
The quality plan captures the primary objectives for each of the
business processes. The plan also shows the measurements you
will attach to each of these objectives. This is also where you
should be addressing customer satisfaction measurement, as
this drives your other measurements.
The standard gives us four levels of objectives, which are
shown in Figure 20.4.
The Quality Policy (5.3) in particular needs to contain spe-
cific strategic objectives for the organization and becomes a
controlled document. I would recommend addressing this after
the business map and the quality plan.
The Quality StatementStrategic Objectives

We now take a step back and look at the strategic objec-
tives of the organization. If you are a very strategic thinking
organization, you might do this first, but even then I find the
mapping and planning help people get their brains engaged
before the strategic stuff. In the quality statement the strate-
H1320 Merrill.indd 268 3/13/09 4:58:07 PM

Process
owner
Places
Customer
order
Sales Agrees
manager Requirements
Design Designs & Scale up

manager specifies & test
Materials Plans Purchases

manager production materials
Operations Prepares Assembles Packages

manager materials product product
Dispatch Delivers
manager product
Figure 20.3 Business process map.
gic objectives of the business need to be captured and need

to be measurable.
Where is the product or service positioned in the market?
What are the long-term improvement goals? What are the
goals in terms of performance and delivery of the product and
service?
This prepares us for the next activity: the quality manual.
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Product Position
Strategic Improvement Goals
(5.3 Policy) Product Performance
and Delivery
Measurable Objectives
Functional Consistent with Policy
(5.4 Planning) Established within
Organization
Operational
Objectives for Product
(7.1 Planning of
Requirements for
Product Realization)
Product
Individual How Personnel

(6.2 Human Contribute to
Resources) Achievement
Figure 20.4 Levels of objectives.
The ManualA Business Description

The quality manual should not be a series of bureaucratic edicts
carved in tablets of stone with every sentence starting Thou
shalt.
Forget the word manual; call it your business description.
Share the elements of the standard between the business lead-
ers and have them specify what will be the objectives in the
area of the business they are responsible for.
Procedures
There are six mandatory procedures. These are activities at the
system level that ensure the system flows smoothly:
Document Control 4.2.3
Internal Audit 8.2.2
Record Control 4.2.4
Control of N/C Product 8.3
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Corrective Action 8.5.2

Preventive Action 8.5.3
A more strategic thinking organization may add other proce-
dures at this system or business level.
Department heads know where they need operating proce-
dures. Occasionally I have to hold them back from creating too
many when they get procedure religion. The important credo
is that you decide where procedures give you value. Remem-
ber, they are tools for controlling processes, not tools for con-
trolling people.
Once we have defined our processes, we then need to use
that very valuable business map we created at the outset to
decide on the key information that flows between the processes.
We also need to identify our primary data collection points.
Let me remind you why we collect data and information.
DataInformationKnowledgeValue
In Chapter 11 I described an important progression from
data being collected to data being used to create value for an
organization:
Data are just names and numbers
Information is patterns in the data
Knowledge comes from information we can act on
Value is created when actions cause improvement
Records must lead to value being created, and let me add that the
data analysis element (8.4) of the standard is a linkage between
data collection and continual improvement. This should be one
of the elements you address as you build your quality plan.
Finally, if we are going to create value, the results of our
analysis must feed continual improvement.
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Continual Improvement
People who worked with the 1994 standard often dealt with
corrective action on a localized basis, and rarely was there a
step back to look at the big picture for the organization.
Significantly preventive action should now be distinctly
separated from corrective action. Preventive action needs a
whole different mind-set and needs managing as a distinct
component of the quality system.
Management review has a critical role in ensuring this big-
picture view of improvement takes place. The management
representative has a key role in providing the information and
knowledge so that the management review can create value for
the organization and the customer.
The management review drives the PDCA cycle with the
management representative being the information manager in
this cycle. Management review, or the business review as it
has now become, is where the ultimate decisions are made on
allocating resources for improvement of the organization. This
takes us into the leadership role in the quality management
system.
THE LEADERSHIP ROLE

The standard specifies a number of actions that top manage-
ment must take. Leaders have a key role in the PDCA cycle,
and I will develop from a leadership perspective the PDCA I
mentioned earlier.
In paragraph 5.1 of ISO 9001 the standard asks for leader-
ship to provide evidence of commitment. In paragraph 5.2 it
then asks for customer focus, by leadership ensuring customer
requirements are . . . met with the aim of enhancing customer
satisfaction.
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Taking the opening elements 5.1 and 5.2, we see the leader-
ship mandate is as follows:
(Plan) Establish policy and objectives 5.1 b) c)
(Do) Ensure availability of resources 5.1 e)
(Check) Ensure customer requirements are met 5.1a, 5.2)
(Act) Conduct management reviews 5.1 d)
These opening leadership mandates then expand into the rest
of the standard. Let me take you through PDCA in more detail
and spell out the leadership role.
THE PLANNING ROLE (PLAN, DO, CHECK, ACT )

One of the textbooks for my business degree was Peter Druck-
ers classic The Practice of Management (1955). In Chapter 7
he talks about the danger of focusing on profit only. This led
to the management by objectives, or MBO, we are all now
familiar with. Taking Druckers point, I think of this profit-only
mind-set as being like a golfer who thinks only of the score
and not how to improve their game. If you focus on improv-
ing your game, the score will come anyway. Become paranoid
about your score, and your game will collapse. This is a key
business concept.
Objectives need to be set for all key business processes, but
a business needs a better way of monitoring its performance
than just by the use of financial data.
SETTING OBJECTIVES
ISO 9001 requires objectives to be set at a number of levels. In ele-
ment 5.3 (Quality Policy), the strategic objectives of the business
need to be captured. Where is the product or service positioned in
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Primary focus Secondary focus
One One One Three One Three

day week month months year years
5.3
Strategic
Objectives
5.4
Functional
Objectives
7.1
Operational
Objectives
6.2
Individual
Objectives
Figure 20.5 Objectives timeline.
the market? What are the long-term improvement goals? What are
the goals in terms of performance and delivery of the product and
service? Leadership is also asked in 5.3 to ensure the quality pol-
icy provides a framework for establishing and reviewing quality
objectives. In element 5.4 (Planning), the standard requires that
quality objectives shall be measurable and consistent with the
quality policy and also requires that objectives are established
at relevant functions and levels within the organization.
Moving further into the standard, in 7.1, Planning of
Product Realization, the organization must determine qual-
ity objectives and requirements for the product and in 6.2,
Human Resources, the organization must ensure that person-
nel are aware of . . . how they contribute to the achievement of
the quality objectives.
There is a clear cascade of objectives here, and they will
have different time scales attached. These time scales will vary
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depending on how strategic or tactical an organization needs to

be. However, we can typically expect the type of spread shown
in Figure 20.5.
THE RESOURCES (PLAN, DO, CHECK, ACT)

Having been given the objectives, people cant Just Do It. They
need the skills, equipment, information, materials, and services
to be able to carry out their tasks. What leadership does is to
ensure resources are available so that people inside the organi-
zation can do what they have to do. Section 6, Resources Man-
agement, again gives a strong mandate to the leadership.
The first resource any organization needs is its people, and
they need the skills to do their work. The wording from the
first edition of QS-9000, which I like, and which is helpful to
leadership, was training must be treated as a strategic issue.
Leadership also needs to think strategically about the hard-
ware, software, and products that it will work with next year,
not just what it will need next week. The leadership must treat
all resources strategically.
The word infrastructure in element 6.3 then addresses all
the items an organization takes for granted in todays highly
integrated society. Leadership has a key role in ensuring that
the IT system is backed up, that the phone system is reliable, and
that services like the power supply are not at risk. Sterling Indus-
tries, a manufacturer in the health care industry, found that the
focus on resources management in the standard helped it reduce
risk and increase reliability in a number of business areas.
Finally, as we move toward integrated management systems,
element 6.4 reminds leadership that it has a key responsibil-
ity, often legally, to ensure that people work in an environment
where their health and safety are not at risk.
Having developed the plan, along with providing the
resources to support the plan, leadership must ensure the plan
is executed. This means monitoring.
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IF YOU DONT KEEP SCORE, ITS ONLY

PRACTICE (PLAN, DO, CHECK, ACT)
At the check stage the leadership receives the feedback on
business performance. You may recall the famous words of
Joseph Juran, You plan and manage quality in the same way
as you plan and manage finances.
The management representative has the same role as the
financial controller, and this is to collect the data from the vari-
ous monitoring points in the business and present it to the leader-
ship in a way that it can make decisions on resource allocation.
The measurement and analysis of data should provide lead-
ership with the information shown in Figure 20.6.
Business Primary objective Performance

process Owner (example) measures (example)
Order Sales Complete # of requirements
input manager and accurate revisited after order
requirements input
Design Design On time, to spec # of projects behind
manager schedule
Test Design No failures # of design changes
manager
Plan Materials Issued on time and # of changes to plan
manager accurate after issuing
Purchase Materials Receipt on time, to # of late or incomplete
manager spec deliveries
Prepare Materials All components # of stoppages
manager available
Assemble Operations Manufacture to # of reworked product
manager spec
Package Operations No damages # of damages
manager
Deliver Dispatch On time and # of incomplete
manager complete shipments
Figure 20.6 Measurement plan.
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If objectives are not being met, the majority of the corrective

actions on each of these processes will be taken locally. How-
ever, the leadership needs to know where there are insufficient
resources in the organization (time, money, people, equipment,
knowledge) for corrective action to be effective.
Bob Swain, general manager of Romark Logistics, is ex
IBM. He took the measurement culture of IBM to Romark.
Implementing the ISO 9001 standard helped him improve the
structure for his measurement plan. His management represen-
tative has the task of producing an executive summary of the
measurement data. The registrars comment when recommend-
ing Romark for registration was that this was one of the most
mature quality systems they had encountered at registration.
The management representative should produce a mea-
surement and corrective action summary for the management
review. A good management representative, like a good accoun-
tant, will produce an analysis of the data so that the leadership
can make quick decisions. The standard again helps by point-
ing to areas where there must be analysis.
8.4 a) customer satisfaction b) product conformity
c) process trends d) suppliers
The results of this analysis then enable leadership to make deci-
sions on training, equipment, knowledge management, materi-
als, and services.
THE MANAGEMENT REVIEW

(PLAN, DO, CHECK, ACT )
The cycle that drives improvement in the business looks like
Figure 20.7.
The information flow through this loop is driven by the man-
agement representative in the same way as financial data are
driven by the financial controller. Deborah Tansey, management
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Internal Audit
(8.2.2) Process and Product
Monitoring (8.2.3, 8.2.4)
Management
Review
Customer
(5.6)
Feedback
(8.2.1)
(Allocate
Resources) Corrective
(6.1) Action (8.5.2)
Executive
Summary
Figure 20.7 The improvement cycle.
representative at AIG Consultants, one of the first companies to

achieve ISO 9001:2000 registration, had key process measurables
throughout the business and summarized them for the president
and vice presidents of her business so that they can make critical
resource decisions.
The management review has to compare what has been
achieved with what was planned, and reassign those very finite
organizational resources. Management review has probably
been the most misunderstood element of ISO 9000. The give-
away words were when you previously read in the quality man-
ual, The quality system will be reviewed at least once a year to
ensure its effectiveness. If this was the policy for the financial
review of the business, then the business would be bankrupt
without even knowing it! Remember, you manage quality in
the same way as you manage your finances.
The word review is one of the most loosely used words in
business and ISO 9000. Its an escape word. Literally translated,
it means have a second look. But it doesnt tell us why or
for what.
You get a mental picture of leaders staring with glazed eyes
at pages of data, rubber stamping it, and then asking, Whats
next? This is what happened with tens of thousands of orga-
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nizations around the world when management review was per-

formed in the 1994 standard. The ISO 9000 definition of review
is activity . . . to determine the . . . effectiveness of the subject
matter to achieve established objectives.
Leaderships job is to compare business results with objec-
tives and to exercise its experience and judgment on where
the people, the time, the equipment, and the money will best
benefit the business in the short, medium, and long term. In
order to do this, the leadership must manage by fact. Num-
ber seven of those eight principles in ISO 9000 paragraph 0.2
is Effective decisions are based on the analysis of data and
information.
The management review needs to receive a summary on the
key issues in the business and then make decisions and action
related to . . . resource needs (5.6.3). The organization must
then provide the resources to maintain . . . and improve . . . the
quality system and to enhance customer satisfaction (6.1).
The standard gives a very clear listing of the inputs to the
management review: (a) audit results, (b) customer feedback,
(c) process performance and product conformance, (d) preven-
tive and corrective action, (e) follow-up from previous status
reviews, (f) changes that affect the system, and (g) recommen-
dations for improvement.
When you look at these issues, they are exactly the same
issues that should be discussed at the monthly financial
meeting.
FOCUS ON YOUR PRINCIPLES

Having completed the description of the approach to imple-
menting ISO 9000, I want to remind you of those eight
principles I showed at the outset. For an organization to be
successful, these principles must be addressed. This list points
you to certain critical elements in the standard where you
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should focus your energy at the outset and so reinforce these

eight principles:
Customer Focused Organization (Customer Satisfaction
Measurement) 8.2.1
Leadership (Management Review) 5.6
Involvement of People (Process Measurement) 8.2.3
Process Approach (Process Mapping) 4.2.1
System Approach to Management (Quality Plan) 5.4
Continual Improvement (Preventive Action) 8.5.3
Factual Approach to Decision Making (Analysis of Data) 8.4
Mutually Beneficial Supplier Relationships (Purchasing
Process) 7.4.1
Ensure each of these elements receives close attention. This
will help you drop the 1994 mind-set, or if youre new to the
standard, it will get your system operating much quicker and
have it creating profit for your organization.
Good luck and Godspeed on your journey to ISO 9000.
BROWSERS BRIEFING
People with no previous experience with implementing

ISO 9000 have had a much easier time implementing
the standard than people who previously worked with
ISO 9000:1994.
Eight principles form the basis for ISO 9000.
Developing the quality management system follows
three phases: planning, system development, and sys-
tem assessment.
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A gap analysis identifies the fit between your existing

business activity and the standard.
The business process map is a must do for the
leadership.
The quality plan is built from the process map by
assessing risk.
In the quality statement, the strategic objectives of the
business need to be captured and be measurable.
Objectives need to be set for all key business processes.
Forget the word manual; instead, call your quality
manual your business description.
There are six mandatory procedures that are activities
at the system level.
The data analysis element (8.4) of the standard is
a linkage between data collection and continual
improvement.
Management review has a critical role in ensuring that
the big-picture view of improvement takes place.
The management representative has the same role as
the financial controller.
The management representative has a key role in pro-
viding the information and knowledge that enable the
management review to create value for the organization
and the customer.
Leaderships job is to compare business results with
objectives and exercise its experience and judgment
on where the people, the time, the equipment, and the
money will best benefit the business.
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REFERENCES
Drucker, Peter F. 1955. The Practice of Management. London:
Heinemann.
ISO 9001:1994. 1994. International Standard, Quality Assurance
Systems Requirements. Geneva: International Organization for
Standardization.
ISO 9001:2008. 2008. International Standard, Quality management
systemsRequirements. Geneva: International Organization for
Standardization.
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21
ISO 9000: Less Procedures,
More Planning
I have made this letter longer than usual, only because I have
not the time to make it shorter.
Pascal
T
hese words by the French philosopher Pascal, in 1657,
were adapted by Mark Twain some two hundred years
later to say, Im sorry this letter is so long I didnt have
time to write a short one. In the context of ISO 9000, this
means Think more, write less.
One of the objectives of the TC176 committee when we
wrote the new ISO 9000 family of standards was to simplify
documentation and eliminate the bureaucracy that had devel-
oped from the 1994 standard. ISO/TC176/N525 Guidance on
the Documentation Requirements of ISO 9001 says ISO 9001
requires a documented quality management system and not a
system of documents. Organizations that are new to ISO 9000
are having little trouble with documents. Organizations and
individuals who were immersed in the 1994 standard are hav-
ing trouble letting go of the old thinking.
283
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Paragraph 4.2.1 of ISO 9001:2008 is that the extent of the

quality system documentation can differ due to:
a. size of organization: the smaller you are, the less you
need to document
b. complexity: the more intricate your interactions then the
greater the risk and the greater the need to document
c. competence: if your people are well trained then there
is no need to repeat their skills, knowledge, and experi-
ence in documents
As organizations become successful, they grow in size, the num-
ber of interactions between people increases, and the opportunity
for failure in communication increases. If you ask any group of
businesspeople what they would like to improve in their organi-
zation, communication will usually top the list.
To stop these failures, people document. They document
information they need before starting a job, how they carry out a
job, and the outcome of the job. As organizations become larger,
people are given full-time jobs creating and managing these doc-
uments. The French word for office, bureau, has been adopted in
the English language to describe this disease of bureaucracy.
Often this information was stored in books, which were
called manuals, a term that suggests lethargy and in itself is
the opposite of automatic or speedy.
HOW ISO 9000 MADE A BAD

SITUATION WORSE
When the first quality standards were created, the designers rec-
ognized that critical data, information, and knowledge needed
to be captured and communicated if an organization was to be
effective. Process descriptions were captured in procedures.
Data and information were captured in records.
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Chapter Twenty-One: Less Procedures, More Planning 285
However, other factors came to bear, and the result was

disastrous. The standards were written by technical people
whose language was far more complex than that of the users
of the standards. The Europeans exerted a lot of influence, and
their languages often used 50 percent more words than the
language of the North Americans. The standards themselves
had to be designed to cover all possibilities. The results were a
series of standards that were extremely wordy.
The users of the standards then thought it was necessary
to use the word style of the standard as the benchmark for the
documents in their own quality systems. Business leaders, sen-
sibly, distanced themselves from this nightmare, and special-
ists or consultants developed this documentation. To justify
their existence, consultants, like lawyers, charged by the word,
and the number of words in each document escalated out of
control.
Lastly, it gave registrars more to audit, and they in turn could
demand more fees. It often took between one and two days to
do a book audit of quality system documentation when half a
day should have been all that was necessary.
Policies and ProceduresThe Traditional Thinking

Policies and procedures are the traditional terms of a
bureaucracy. Policies are the rules, which everyone must obey
for fear of being fired. Procedures are the methods people must
follow in order to obey the rules. Policies and procedures help
ensure consistent behavior in large organizations such as the
army or government departments.
In an ISO 9000:1994 quality system, the key information
was (1) a description of the method for operating a process
(procedure), (2) a record of the output from the process, and
(3) the correction of the output if it did not meet requirements
(corrective action). Thinking was at a product level, not at an
organizational level.
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A fast-moving modern organization can be brought to its

knees by policies and procedures. As we move to process-
managed organizations, we need faster and simpler methods.
We no longer run our organizations on the military model. We
dont observe policies; we set objectives. Procedures are not
something we comply with; they are an aid or support tool.
We need to move to:
Organizational objectives
Quality system procedures
Operating procedures
A database or records
However, I am now going to take your thinking a step further.
PLAN, DO, CHECK, ACT

ISO 9000 is based on the Plan-Do-Check-Act (PDCA) cycle.
This is the key to the essential documents in the new quality
system. The key elements are as follows:
Plans are where we set objectives, identify resources (such
as time and people required), and set measurements on
whether we have achieved our objectives. The quality man-
ual should become an objectives manual and provide a high-
level description of the organization, its objectives, and how
it operates.
Process maps and procedures are where we describe what
we Do, first at a high level and then at a more detailed
level, to achieve our objectives.
We Check whether we have achieved the result we
require, and capture it in a quality record.
Acting means the corrective or preventive action we take
to deal with any difference between our planned and
actual achievement. Here there is a fundamental shift in
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thinking from the old standard. Action doesnt mean

burying the problem; it means improving the process and
the organization.
In 1994 we saw the structure shown in Figure 21.1. We need to
discard the approach where:
Level 1 was a generic reiteration of the standard
Level 2 was almost a repeat of level 1 and rarely (if
ever) used
Level 3 was the only piece of the quality system that
was useful
This diagram, in itself, suggests a bottom-heavy, lethargic
bureaucracy. We need to switch our thinking to the structure
shown in Figure 21.2.
Level 1 Policies (rules)
Level 2 Methods (procedures)
Level 3 Methods (work instructions)
Records
Figure 21.1 1994 structure.
Plan Do
Quality manual Business
Measurement plan flowchart
Procedures
Act Check
Improvements Records
Figure 21.2 Dynamic documentation.
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Im going to detail one of the best sequences to follow in

developing this documentation.
THE BUSINESS PROCESS MAP

Paragraph 4.1.b of ISO 9001:2008 says, Determine the
sequence and interaction of (the quality system) processes.
The business process map is the first key document in the qual-
ity system. This is not a job for a consultant or a quality man-
ager; it is a must do for the leadership.
You will recall from Figure 20.3 what a finished process
map looks like. With this map, the leadership can identify where
processes carry risk. You assess risk by asking questions such
as, Is there complexity? Is there low operator skill? Is there
variation in information supplied?
This helps you build your list of where operating proce-
dures are neededagain a leadership task. In ISO 9000 you
decide where an operating procedure has value for your busi-
ness. The standard mandates only six procedures, and those
are for controlling the quality system. A procedure is simply
a tool for controlling a process or a system and so reduc-
ing risk. Create a procedure only if it creates value for your
organization.
THE QUALITY PLANTHE

ORGANIZATIONS OBJECTIVES
You will recall from Chapter 20 that if you look deeper into the
standard there is a hierarchy of objectives:
Strategic (5.3 Quality Policy)
Functional (5.4 Quality Plan)
Operational (7.1 Planning of Product Realization)
Individual (6.2 Human Resources)
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The quality plan is built from the process map using the same
criteria for assessing risk that you used for building your list
of operating procedures. The quality plan captures the primary
objectives of each business process. The plan also shows the
measurements you will attach to each of these objectives. A
simple plan was shown in Figure 20.6.
THE MANUALA BUSINESS

DESCRIPTION
The manual should not be a series of bureaucratic edicts
carved in tablets of stone with every sentence starting Thou
shalt.
The writing of the manual has become one of the greatest
lost opportunities in the organization. Forget the word manual;
call it your business description. Share the elements of the
standard with the business leaders and have them specify what
will be the objectives in their area of business.
To start, reduce the standard to a series of to-dos. I will
use purchasing as an example. Looking at the elements of this
clause of the standard, it asks the following:
7.4.1 Purchasing Process

Ensure that purchased product conforms to
requirements
Control depends on the effect of the purchase on
product realization
Evaluate and select suppliers on their ability to sup-
ply to requirements
Establish criteria for selection and evaluation
Record evaluation and actions arising
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Looking at these bullets, the purchasing manager should ask,

How does my organization do these things? The result should
look like the following extract:
7.4.1 Purchasing Process

DP International partners with suppliers and subcon-
tractors that will meet our requirements. Partners with
whom we have a working relationship are shown on the
approved vendors list, which also indicates those con-
sidered to be critical. The performance of critical part-
ners is monitored for consistency of price, delivery, and
specification. Performance and any resulting actions are
recorded by the purchasing department (ref. procedure
# 7.4.1). If a partner fails to perform, the control over
that partner will be escalated (ref. procedure # 7.4.2) and
action recorded. New vendors will be added to the list
only when they meet the criteria specified in procedure
# 7.4.2.
Youll notice the sequential nature of this policy, which means

it not only fulfills the role of what used to be level 1 documen-
tation, but it enables many companies to eliminate what they
call level 2 documentation.
Using this approach, Northern Light Technologies, a manu-
facturer of safety equipment, reduced its 1994 quality manual
from 60 pages to 15 pages and eliminated the majority of its
level 2 documents.
This business description, using ISO 9000 as a template,
also serves to focus the leadership on where the business weak-
nesses exist and provides the framework for setting objectives
in activities such as supplier performance and supplier selec-
tion. This is also good preparation for the next documentation
activity by the leadership.
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Plan Do
Planning 5.4 Document Control 4.2.3
Measurement 8.1 Human Resources 6.2
Act Check
Management Review 5.6 Internal Audit 8.2.2
Corrective Action 8.5.2 Control of N/C Product 8.3
Preventive Action 8.5.3 Record Control 4.2.4
Improvement 8.5.1
Figure 21.3 System level procedures.
QUALITY SYSTEM PROCEDURES

Using your objectives manualor policy manual if you prefer
to call it thatcross-reference this business description with
your process map. Identify any key activities in your business
description that have not already been listed after your process
mapping. These will probably be activities like management
review, preparation of the business plan, and training.
To find where quality system procedures have value, go
back to the PDCA cycle. Fit the six mandatory procedures with
this cycle and youll see some gaps that will help identify where
business or system level procedures have value. The mandatory
procedures are shown in italics in Figure 21.3.
A more strategic thinking organization may add other pro-
cedures at this system or business level. You may have noticed
I suggested a system level procedure on Improvement. Youll
see why a little later in this chapter.
PROCEDURES: A TOOL FOR PROCESS

CONTROL, NOT PEOPLE CONTROL
When I was a university student we had a saying that lectures
were an activity designed to transfer the notes of the lecturer
to the notepad of the student without the information passing
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through the mind of either person. In ISO 9000, procedures

are too frequently documents designed to transfer information
from a consultant to an auditor without it passing through the
mind of anyone in the organization.
In his excellent book Simplicity, the great thinker Edward
de Bono (1998) explains how the human brain tries its hard-
est to simplify life. . . . Once you identify a pattern you flow
along it without further effort. He goes on to say, It is always
worth investing some thinking time and effort to find a simpler
approach. He quotes a situation of how, with eleven pieces of
clothing, there are 39.9 million possible ways of getting dressed
in the morning (11 10 9 8, and so forth).
Routines simplify life, and yet how often have procedures
created complexity because the people involved in an activ-
ity were not involved in creating the procedure? Procedures
should be simple, direct guides on how an activity is carried
out, whether at a system or process level.
The term procedure means how to proceed through an
activity. A procedure does not need a technical writer to pre-
pare it. If you can write a letter, you can write a procedure.
You start with an outline in which you capture the key steps,
for example, issuing a purchase order (see Figure 21.4). This
is like the pencil sketch an artist produces before applying
paint.
The next step is to capture the essentials of the activity:
ObjectiveWhat you will achieve, for example, issuing
a purchase order (PO) to a vendor
ReferencesInformation you will refer to and use, for
example, approved supplier list and price lists
RecordsInformation you will capture and record, for
example, price, delivery date, and quantity
SkillsTraining, knowledge, and experience required,
for example, software training
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Receive Verify
Check
purchase price and Etc.
inventory
requisition delivery
Figure 21.4 Process flow.
We then go into detail of the steps, and the short phrases in

Figure 21.4 become:
1. Receive purchase requisition from material planning
2. Use software to check stock for outstanding orders and
approved vendors
3. Verify price and delivery, and display items under
Costs, vendors, and purchase orders if needed
You can often halve the number of words in the operating
procedure and quality system procedure. Youll notice in the list
of activity essentials that I mentioned references and records.
These are the next key documents in your quality system.
REFERENCES AND RECORDS:

A SOURCE OF CONFUSION
References are information you refer to as you carry out an
activity. The information exists before you start. Records are
information you create as you carry out the activity. If the
information will be used by someone else or if you will use the
information later, then you record the information.
Records are a communication tool. If you replace the word
record with the word communicate in the ISO 9000 text, it brings
the standard alive and makes much more sense. For example,
in element 7.4.1, Purchasing Process, the words Record evalu-
ations and actions arising become Communicate evaluations
and actions arising and make you ask, Who needs to know this
information?
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References
(vendor lists, brochures, price lists, etc.)
RFP Issuing a PO to vendor

PO
Records
(delivery date, quantity,
agreed price, etc.)
Figure 21.5 Information inputs and outputs.
The simple process of creating a PO helps illustrate the dif-

ference between references and records (see Figure 21.5). If I
am a buyer and receive a request for purchase (RFP), the RFP
is my process input, and my process output is the PO issued
to the vendor. The references are information inputs, and the
records are information outputs.
Note that the information I record and send to accounts pay-
able then becomes its reference. Good control of references and
records is fundamental to good communication in the quality
system. However, we should only take the trouble to capture data
if they have value. Lets look at how data can create value.
DATAINFORMATIONKNOWLEDGE
INTELLECTUAL PROPERTY
In Chapter 19 I mentioned the important progression from
data being collected to data being used to create value for an
organization.
Data are just names and numbers. This is what we collect
in quality records, and ISO 9001 gives us the points in the
quality system when we should record.
Information is patterns in the data. ISO 9001 points us to
analyze the data where information is critical: customer
satisfaction, supplier performance, product conformance,
and process and product trends.
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Knowledge comes from information we can act on. The

analysis should point to the necessary actions for eliminating
customer problems, improving supplier performance and
improving the performance of organizational processes.
Improvement occurs when the actions increase the ability
of the organization to deliver value to the customer.
Records must lead to value being created for the organization.
If you refer to ISO/TC176/N525, there are 21 records
required by ISO 9000, of which 5 are in design and 3 in cali-
bration. You can add more as you require (see Records and
References). These are shown in Figure 21.6.
Clause
5.6.1 Management review
6.2.2 Competence, awareness and training
7.1 Planning product realization
7.2.2 Review of product requirements
7.3.2 Design and development inputs
7.3.4 Design and development reviews
7.3.5 Design and development verification
7.3.6 Design and development validation
7.3.7 Design and development changes
7.4.1 Supplier evaluations
7.5.2 Validation of processes
7.5.3 Identification of the product
7.5.4 Customer property
7.6 Calibration of measuring equipment
7.6 Validity of calibration results
7.6 Results of calibration
8.2.2 Internal audit results
8.2.4 Evidence of product conformity
8.3 Nature of the product nonconformities
8.5.2 Results of corrective action
8.5.3 Results of preventive action
Figure 21.6 Mandatory records.
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CORRECTIVE AND PREVENTIVE ACTION:

THE DOCUMENTS THAT CREATE VALUE
Corrective and preventive action are the last of the key docu-
ments in the quality system and are often the least under-
stood. The new standard requires improvement, and this means
change.
These documents take many more formats than plans, pro-
cedures, and records. However, the key content, whether it is
corrective or preventive action, management review, or design
review, is as follows:
What is the problem?
Who owns the problem?
What resources do they need?
When is the solution required?
Once a solution is agreed upon, the following should be
identified:
What change has to be made
Who will implement it
When it will be implemented
Tracking all of this change requires a master log of the activity,
which I showed in Figure 13.5.
People who worked with the 1994 standard dealt with cor-
rective action on a localized basis, and rarely was there a step
back to look at the big picture for the organization. Improve-
ment and change management documentation, such as in Fig-
ure 21.2, needs a whole new mind-set and needs to be managed
as a distinct component of the quality system.
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Significantly preventive action should now be separated

from and logged independently of corrective action. This is
where you are proactive about improvement rather than reac-
tive. Viceroy Homes, a previous client of mine, has used a cost
of quality assessment of its organization as a method for flush-
ing out processes for preventive actions.
Management review has a critical role in ensuring this
big-picture view of improvement takes place. The manage-
ment representative has a key role in providing the infor-
mation and knowledge so that the management review can
create value for the organization and the customer. The
inputs needed by management review are documents such as
the status of the quality plan (achievement versus objectives)
and the status of corrective actions and preventive actions
(for example, Figure 21.2). Deborah Tansey, as the manage-
ment representative for the quality management system of
AIG Consultants, provided these key documents to her man-
agement review team.
The minutes of the management review now become a piv-
otal document in the PDCA cycle, with the management repre-
sentative being the information manager. Management review,
or the business review as it has now become, is where the ulti-
mate decisions are made on allocating resources for improve-
ment of the organization.
You can see how focusing on the PDCA cycle of the new
standard helps shift the mind-set and shows that procedures
are just one component in achieving the PDCA cycle. Quality
plans, containing measurable objectives, become an important
new document, as do organizational and process improvement
records. The number of procedures in the quality system should
actually be reduced, and many organizations are dramatically
reducing ISO 9000 documentation.
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BROWSERS BRIEFING
ISO/TC176/N525 Guidance on the Documentation

Requirements of ISO 9001 says ISO 9001 requires
a documented quality management system and not a
system of documents.
The users of the earlier quality standards thought it
was necessary to use the language of the standards as
the benchmark for the documents in their own quality
systems.
A fast-moving modern organization can be brought to
its knees by policies and procedures.
We dont observe policies; we set objectives. Pro-
cedures are not something we comply with; they are
an aid or support tool.
The business process map is the first key document in
the quality system.
In ISO 9000 you decide where an operating procedure
has value.
The quality plan is built from the process map.
Forget the word manual; instead, call your quality
manual your business description.
Procedures are a tool for process control, not people
control.
References are information you refer to.
Records are information you create.
Data are just names and numbers.
Information is patterns in the data.
Knowledge comes from information we can act on.
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REFERENCES
De Bono, Edward. 1998. Simplicity. New York: Penguin Putnam.
ISO/TC176/SC2/N525. 2000. Guidance on the Documentation
Requirements of ISO 9001:2000. Geneva: International Organiza-
tion for Standardization.
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H1320 Merrill.indd 300 3/13/09 4:58:08 PM
22
Internal AuditInvolve
People, Create Value
Arguing with an auditor is like mud wrestling with a pig; after

a while you find the pig likes it.
Anon
I
f conducted the right way, the internal audit process of
ISO 9000 is a learning experience and enables us to do it
right the second time. Unfortunately, success in the audit
is viewed as No nonconformances, no findings, squeaky
clean. I regard that as complete failure.
An audit produces value when it identifies improvement
opportunities, and those opportunities come when the leader-
ship starts setting stretch goals for improvement.
THE OLD THINKING

Ive seen a large number of people locked into the old qual-
ity assurance thinking about internal audit. The audit team
has been two people, the Lone Ranger and Tonto, who ride
around the business firing guns at people and shouting words
like compliance and violation. The attitude of everyone in the
business is negative, and corrective actions often sit for months
unattended because managers see no value in the action.
301
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You hear jokes about auditors, like Arguing with an auditor

is like mud wrestling with a pig; after a while you find the pig
likes it or alternatively An auditor is the person who, when
the battle is over, comes in and kills the survivors.
If your audit involves arguments, it has failed. If your audi-
tors behave like barracudas, they will get zero buy-in from the
rest of the organization.
Im going to describe an audit process that builds buy-
in from all departments from the beginning of the planning
phases, has an outcome that creates added value for the organi-
zation, and is an integral part of the continual improvement of
the quality system.
Use internal audit as a management tool. It drives continual
improvement and ensures the involvement of key people, espe-
cially management. This creates high value for your business.
A cross-functional audit team is a critical success factor.
PROCESS AUDIT
The old ISO 9000 carried the mantra Say what you do; do
what you say. This practice led to widespread cocooning of
bad practices in the quality system. The old ISO 9000 led to a
focus, often caused by registrar auditors, on the individual ele-
ments of ISO 9000:1994.
ISO 9000 now focuses on improvement of the organiza-
tions performance. Measurable objectives become key com-
ponents within the quality system, and the audit must shift its
focus to the objective of the process. Is the objective being
achieved, and if not, what action is being taken? A procedure is
a tool for enabling a process to be operated consistently.
Demings original work points to the fact that 90 percent of
organizational failure is due to system failure. A system is a set
of processes linked together, and our new audit must focus on
these processes and their linkage.
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Chapter Twenty-Two: Internal AuditInvolve People, Create Value 303
Im going to show you how to focus on your processes and

the measurable objectives of these processes and how the new
audit focuses far more on the managers of an organization.
Clearly, securing management buy-in is essential. I will do this
by taking you through the classic phases of an audit.
AUDIT STRUCTURE
The audit phases are (1) plan, (2) interview, (3) report, and
(4) follow up. You can see the similarity to PDCA.
Planning is the phase in the audit where the biggest oppor-
tunity of laying the foundations for improvement is completely
overlooked. Im going to show you how to develop the involve-
ment of people from the outset.
The interview phase is where data and information are
collected.
The reporting phase is where data and information are ana-
lyzed and communicated back to the area audited. This is where
the auditor compares process and system objectives with actuals.
The follow-up phase is where the auditors confirm that
change has occurred, to address the audit findings.
Ill now go through these phases in detail, and Ill show you
how to involve people and create value. You will see how inter-
nal audit is a key component in the improvement cycle, which
you will recall from Figure 20.6.
PLANNING THE AUDIT (PHASE 1)

Three extracts from ISO 9001:2008 paragraph 8.2.2 address
this phase of the audit:
i) . . . conduct internal audits at planned intervals . . .
ii) an audit program shall be planned taking into account
the status and importance of the process . . .
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iii) The . . . requirements for planning audits . . . shall

be defined in a documented procedure . . .
You could add audit criteria, scope and . . . frequency shall be
defined as part of the planning process.
The following are key activities in the planning phase:
1. Selecting the team
2. Prioritizing departments
3. Assigning the team
4. Agreeing on the timeline for auditing the departments
5. Developing the interview questions (checklist)
You should bring all members of the audit team together for
items iiiv of the planning session, which will take about two
hours.
Selecting the Team

One of the critical success factors in an audit is at the beginning
of the planning phase, when you involve each of the depart-
ments that will be audited. What better way than to have a
trusted member of the department be part of that audit team.
I say trusted because the department managers must see this
person as a key player in the department who will bring value
back to the department after auditing other areas of the business.
This person will not, of course, audit their own department.
This is a golden opportunity to identify, understand, and
address communication weaknesses between the managers
own department and other departments. The audit representa-
tive will bring back knowledge and best practices from other
parts of the organization. This is a great learning process that
leads to tremendous improvement in internal communications.
You should train 58 percent of your population as inter-
nal auditors. These people are then put into operating teams of
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typically two people. As soon as I say this, managers usually

say, But look at how much of peoples time you will take up.
Remember, however, net hours spent on auditing will be the
same whether it is 2 people or 16 people. It is only the train-
ing time that is extra. Remember the old saying, If you think
education is expensive, try ignorance. Sixteen person days of
auditing could be eight people for two days each, or two people
for eight days. John Carey, president of AIG Consulting, a divi-
sion of the worlds largest financial institution, went on to train
nearly 20 percent of his people using this approach. He did
this when he discovered the enormous improvement in internal
communications that came from this approach.
The audit team should also represent all levels of seniority
in the organization. Members of senior management, as you
will later see, provide the vital links to the management review
process, which you will see has become the business review,
and must provide resources to support the corrective and pre-
ventive actions that are generated (see Figure 22.1).
Prioritizing Departments
The ISO 9001 requirement is plan . . . taking into account the
status and importance of processes . . . and results of previous
Internal Audit
Management
Review
Customer
(5.6)
Feedback
(8.2.1)
(Allocate
(6.1) Action (8.5.2)
Executive
Summary
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audits. The following are issues to be addressed in prioritizing

each department or function in the organization:
How much change has occurred?
Who experiences the most performance problems?
How critical is that function for the business?
How complex is that area?
How many processes in the area?
I have found the following approach extremely powerful. It is a
consensus process that has the team members identify the issues
the business has faced in recent months and also prepares them
mentally for the audit. Each member of the audit team scores the
factors from the list, rating each department as high (4), above
average (3), below average (2), or low (1). Figure 22.2 shows
what the final results might look like if there were eight members
working in pairs in the full audit team.
Of course, these numbers and departments will be different
for your own business, but both the consensus process and the
final result are essential in the audit planning activity. The final
result is a vital document for the audit team and the lead auditor
in planning the upcoming audit.
You can see straightaway which departments require the
most audit resources. In engineering you will likely plan for
two auditors with previous experience. At the other extreme,
human resources (HR) needs only one auditor, and they might
have only just been trained.
The lead auditor may say, Well, I knew that engineering
was bound to score highest. Yes, but it is important to have
agreement from all audit team members. There might also be
changes or problems in the shipping department that you didnt
know about, and this process will flush them out. This would
enable the audit team member from the shipping department to
highlight these issues.
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List the departments that will be audited and score them:

High 4
Above average 3
Below average 2
Low 1
Score them for the following factors:
Degree of change
Performance problems
Criticality to the environment
Complexity of operation
Number of processes
Department Change Problems Criticality Complexity Processes Total

Sales 3 6 6 3 3 21
Purchasing 6 10 6 5 5 32
Engineering 15 19 16 18 15 83
Planning 10 24 7 7 6 54
Preparation 8 15 14 16 12 65
Operations 6 16 17 18 19 76
Shipping and 7 9 19 6 6 47
receiving
HR and 4 3 3 3 3 16
administration
Figure 22.2 Planning audit resources.
Assigning the Team

With the batting order you have created, you can now allocate
the team members based on their experience. Just remember the
rule, Auditors shall not audit their own work. I usually ask the
members of the team to pick three departments that they inter-
face with and where they would like to audit. They will actually
audit only one or two departments. I then take 510 minutes to
build the team list from a show of hands. These team assign-
ments will develop the interdepartmental communication and
understanding that I talked about earlier.
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Agreeing on the Timeline

The next step is to build a timeline for the audit (see Fig-
ure 22.3). If this is your first internal audit and youre not
ISO 9000 registered, go to a low score on the batting order
or a soft target first. This gets your internal audit process
proven. If you are already registered, go to the highest score
first, because this is where your corrective actions are going to
be most likely. They are then likely to be cleaned up by the time
you get to the end of the audit timeline. Notice that Labor Day
week, being a short week, wont have an audit. Each member of
the audit team will also ensure high-activity weeks in their own
department are avoided when the timeline is built. For example,
shipping might want to avoid audits during month end.
One last point here, quality system procedures like document
control and preventive action should be audited at the end of the
timeline, when you have collected data from each department.
However, remember that these are system level procedures and
that you need to evaluate their performance at a system levelin
other words, how they operate across the organization.
August September
Department 4 11 18 25 1 8 15 22 29
Engineering X
Operations X
Preparation X
Planning X
Shipping and X
receiving
Purchasing X
Sales X
HR and X
administration
Figure 22.3 Audit timeline.
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Building Buy-in
Coming back to the timeline, the next step in the planning
phase is to continue building the involvement of the depart-
ments to be audited. The first step was having a member of that
department on the audit team. The assigned audit team now
needs to agree with the department manager on an audit date.
The timeline has identified a week but not the day. This way the
manager has choices.
When agreeing on the day of the week that will work best,
the audit team should ask the manager for a copy of that depart-
ments procedures. Dont just pull them up on the computer;
that is invasive. Asking for the procedures builds a relationship
with the manager and subtly emphasizes that the manager owns
the procedures. Let the manager talk about any issues as well.
Remember, your objective is continual improvement, not a game
of gotcha. Bruce Hathaway, a manager with IBM Solution
Delivery Services, recognized the value that a well-conducted
audit could bring to his department and would point an audit
team at areas he was unhappy with. He saw the value of a fresh
pair of eyes giving him feedback and recognized this was a ser-
vice to his department for which he didnt have to pay extra.
Nearer the time of the audit you will need to agree with
the manager on the time and place of the opening and clos-
ing meetings and ask them for an escort during the audit. The
escort will become a key player in ensuring audit success.
Developing the Interview Sheet, or Checklist

ISO 9000 is a management system. Your department audit has
to begin with a management interview. These are the kinds of
questions you will ask each department manager:
What are your department objectives?
Do members of your department have job descriptions?
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May I see the performance measures against these

objectives?
How are the results of your performance communicated
to management review?
How do you communicate performance within the
department?
How do you identify training needs?
Do you have a training plan?
This first interview will further involve the manager, who
will be responsible for any corrective actions. The interview
with the department manager will clearly lead to follow-up
questions during the audit of the department. After this inter-
view the department processes themselves will need to be
evaluated.
The structure of the process interview sheet will flow like
that shown in Figure 22.4 and is taken from those key elements
in the procedure such as purpose, references, records,
and responsibility.
The sequence of these questions is important. Notice the
last question on skills and training. If you ask this at the start of
the interview it is threatening. Ask it at the end, after the person
has clearly demonstrated their knowledge; subsequent audit
issues will then be taken as opportunities to improve.
The procedure-specific questions (see #7) then need to be
developed and will flow out of the steps in the procedure. You
will need to focus on any points in the procedure where infor-
mation is recorded or communicated. You also need to focus
on famous ISO words like review, necessary, appropriate,
and so forth, and simply ask What is reviewed? or What is
appropriate?
A well-designed interview sheet gives you the framework
you need and removes a lot of the anxiety from the interview
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Title page element Question

1. Responsibility Are you the person responsible for (procedure
title)?
2. (see steps page) Can you walk me through the activity of
(procedure title) (no questions)?
Can you show me a copy of this procedure?
What is the revision level?
3. Purpose What do you aim to achieve (or)
What is your objective whenever you do this?
Do you have a measurable target? What is that
measurement?
4. Scope Are there any situations in which this procedure
cannot be used?
5. References What information do you need before you start
this activity?
6. Records What information do you record whenever you
carry out this task?
Can you show me your performance
measurements?
7. Ask questions specific to each step in the
procedure.
8. Skills How did you learn to do this job?
9. QMS Policy What is your understanding of the QMS Policy
(statement)?
Figure 22.4 Audit interview sheet.
for both the auditor and the auditee. This approach can be used
just as effectively with a process that is not documented.
THE DESK STUDY

I wont spend a lot of time on the desk study, but suffice to say,
before you go into the departments, you must ensure your qual-
ity manual has addressed all the requirements of the standard
that you need to address. A quality system checklist can usually
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be obtained from your consultant or your registrar and will ask

questions like the following:
6.2.2 Training, awareness and competency
a) Are competency needs identified?
b) Is the needed training provided?
c) Is training effectiveness evaluated?
d) Are employees aware of how they contribute to
achieving the objectives?
e) Are records of education, experience, training
and qualifications maintained? (see 4.2.4).
You need to be certain that your manual addresses these points.
Share the elements of the standard with the audit team,
which should take less than an hour. If youre not yet ISO 9000
registered, this is a vital step before you submit your manual to
the registrar.
THE AUDIT INTERVIEWS (PHASE 2)

ISO 9000 says that you should ensure objectivity and impartial-
ity in the audit process. In addition you need to continue the
buy-in process at the beginning of this phase. The opening meet-
ing is so easily skipped, and yet this is the essential kickoff for
this phase of the audit. You should arrive at this meeting with the
following:
A complete checklist
An agreed meeting location and time
An agreed closing meeting location and time
An agreed list of meeting attendees and an escort
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The people who should attend are the department managers,

the escort, and the department supervisors. In a small depart-
ment of fewer than ten people, it is good to invite everyone.
Explain how the audit will be conducted, invite questions,
and show the questions on your checklist. This will build trust
and teamwork between the audit team and the department.
Remember, the objective is continual improvement, not that
game of gotcha. You want the people in the department to see
corrective actions as natural improvement opportunities.
Audits should be enjoyable. John Martell, a project man-
ager at Solectron and a member of its internal audit team,
commented after his internal audit training, This is the most
exciting part of the whole ISO 9000 project.
The interview with the manager should follow immediately
after the opening meeting. Recall the questions for the depart-
ment managers from earlier. The managers answers to these
questions will give you a good sense of how well the depart-
ment is organized before you begin the audit.
Interviewing
Prior to auditing you should role-play the interview between
members of the audit team and inject responses from the inter-
viewee that will generate nonconformance issues. Writing non-
conformances is often difficult for first-time auditors. This also
develops familiarity with use of the checklist.
A key person throughout the interview is the escort, who
will be a witness for your audit findings. When you present
findings at the closing meeting, there should be no surprises.
Your ideal situation is where the auditee identifies, acknowl-
edges, and owns a nonconformance.
Finally, never forget the good points. At the end of every
interview, seek out the good points and repeat them back to the
auditee. Leave the auditee feeling good, and they will accept
the findings and want to be even better.
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REPORTING FINDINGS (PHASE 3)

The audit team meeting is where you download all the data
you have collected and analyze it to find patterns. Too many
auditors dump a load of data on the auditee and dont analyze
for patterns.
The auditor must provide the department manager with real
information that can be acted on in order to create value for
the business. For example, the manager may have a training
plan, but it has not been shared with the department. The four
or five people who joined the department in the last six months
learned their job by trial and error. Now you have a pattern. The
information that can be acted on is the need for the training
plan to be communicated and implemented. You can support
your findings by referencing 6.2.2 from the standard.
How do you find these patterns? All too often auditors dont
even tryno wonder they have the reputation they do. The eas-
iest way Ive found to detect patterns is to have each auditor list
the key issues on a flip chart and then describe the issues to the
rest of the team. The members of the audit team then identify
the items that link together. Again, use the 5 Whys to get
back to system level issues. This is another consensus-building
activity.
The Closing Meeting and the Managers Role

It is essential to present an action list that the manager will
act on.
Masaaki Imai, the author of Kaizen, said, Everyone has two
jobs. The first is doing their job, and the second is improving the
way they do their job. Every manager has two jobs: one is man-
aging the department, the second is improving the department.
Give the manager a list of three to six key items that are
grouped. Dont show it as a series of separate training issues.
A cost of quality assessment can be a good way of showing
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the impact of a nonconformance. A summary of findings might

read like the following list:
Training plan needs to be communicated and implemented
Department objectives are planned, but measurement
of achievement is not being conducted in all processes
shown on the plan
Calibration of test equipment not maintained
Each of these items would be supported with specific informa-
tion about the individual findings. Other one off items are
then shown as a list of opportunities for improvement.
Internal audit is a service to the department. Remember that
the escort is a trusted member of the department and will vali-
date your findings. If you follow the steps I described earlier, the
manager will see the value of the service you are providingjust
as Bruce Hathaway from IBM did.
Finally, remember that the department you have audited is
your customer. You should evaluate whether the audit is work-
ing for the customer. A customer feedback form gives a voice
to the customer and further builds the involvement of the audi-
tee (see Figure 22.5).
THE MANAGEMENT REVIEW

AND FOLLOW-UP (PHASE 4)
Many internal auditors and lead auditors mistakenly think they
are responsible for seeing corrective actions to completion. In
no way must they interfere with the action of the department.
Theirs is a monitoring role, and bias must not be introduced.
The people to drive improvement are the managers, who are
supported by their peer group, the management review team.
Management review in the new ISO 9000 is performed by the
senior management team. It receives an executive summary
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Auditee (customer) feedback questionnaire

The recent internal audit of your quality system was a service provided
to your department to enable you to improve areas in which you may
have process weaknesses. As an audit team we are committed to
continuous improvement. We would like your feedback on the service
we delivered to you.
Yes No
1. Did the audit team give you adequate notice to
prepare for its visit?
2. Did the opening meeting adequately explain how

the audit would be conducted and the role of the
auditee?
3. Did the members of your department find the audit

interviews stressful?
4. Were the audit interviews conducted in a

professional manner?
5. Did the audit reveal any improvement opportunities

of which you were not aware?
6. Did the closing meeting present the findings in a

way that you could see a path to corrective action?
Other comments
Figure 22.5 Audit customer feedback.
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of the audit findings from the management representative or

lead auditor. Management review then provides decisions and
actions related to resource needs. The follow-up audit simply
confirms on behalf of management review that the resources
have been effective (see Figure 20.6).
Management review is the ultimate driver for the orga-
nizations improvement, but the individual managers make
improvement happen in their own areas.
Management review should also proactively use internal
audit as a monitoring tool for its quality management system
and not wait for the next registrar visit as the prompt for inter-
nal audit.
Marion McGill, quality manager at Viceroy Homes, along
with her management team, conducts an internal audit in a sin-
gle business process area when a problem occurs. The findings
help the management team make more informed decisions on
business issues.
Let me summarize. Internal audit can be a beneficial and
even enjoyable experience if approached in the right way.
Critical for these outcomes is the involvement of department
managers from the outset and the creation of a cross-functional
audit team.
ISO 9000 requires a process audit, which means focus-
ing on not only the consistent operation of a process but also
whether the process is achieving its objectives.
Presenting a department manager with an action list,
which they see as providing value, is a key responsibility for
the auditor.
The management review process is a pivotal element in
the quality system and must drive continual improvement by
ensuring resources are in place to achieve the improvement
opportunities identified in the audit.
For the record, in the world of quality you will often hear
reference to continuous improvement, while in the world of
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ISO 14000 and later in the world of ISO 9000, continual

improvement is discussed. People ask me what the difference
is. Pretend you are slowly turning on a water faucet. Water
begins to drip out of the tap. As you continue to turn the faucet
handle, the stream of water becomes continuous. In the ISO
world you dont need to be improving all the time, but you do
need to be doing it on a regular basis.
BROWSERS BRIEFING
The audit phases are (1) plan, (2) interview, (3) report,
and (4) follow up.
With the wrong approach, corrective actions sit for
months unattendedmanagers see no value in the
action.
A cross-functional audit team is a critical success
factor.
Involve each of the departments that will be audited in
the audit team.
Train 58 percent of your population as internal
auditors.
Change, problems, criticality, complexity, and number
of processes are issues to be addressed in prioritizing
each department or function in the organization.
Point an audit team at process areas you are unhappy
with.
The department audit has to begin with a management
interview.
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Always clarify words like review, necessary, and

appropriate.
The objective is continual improvement, not a game of
gotcha.
At the end of every interview, seek out the good points
and repeat them back to the auditee.
The audit team meeting is where you download and
analyze all the data you have collected.
The auditor must provide the department manager with
real information that can be acted on.
Internal audit is a service to the department.
The department you are auditing is your customer.
Management review should proactively use internal
audit as a monitoring tool.
REFERENCE
ISO 9001:2008. 2008. International Standard, Quality management
systemsRequirements. Geneva: International Organization for
Standardization.
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H1320 Merrill.indd 320 3/13/09 4:58:09 PM
23
Choosing from the Menu
Beginning is easyContinuing is hard.
Japanese Proverb
T
hroughout the 1980s we saw many approaches to imple-
menting quality management. You might call the 1980s
the period of awareness when people were discovering
quality. But then in the 1990s a strong focus began emerging.
A number of business leaders got hold of quality management
and implemented it well. Bob Galvin developed the Six Sigma
approach, and Jack Welch became famous for using it at GE
Neutron Jack as we often called him. He had the ability to get
rid of people in droves and leave the building intact. This shows
that we must be aware that quality is often used as a short-term
cost-reduction program instead of a long-term improvement
process.
The many approaches to implementing quality manage-
ment made choosing from the menu of ISO 9000, Six Sigma,
and Baldrige at first confusing. We see one approach to quality
that appears to have strengths, and another that appears to have
other strengths. Im going to show you that approaches like ISO
9000, Six Sigma, and the various national awards are comple-
mentary. They do not contradict each other; they flow into each
321
H1320 Merrill.indd 321 3/13/09 4:58:09 PM

other. They actually help you to build continuity into the qual-
ity change process. There is an old Japanese proverb: Begin-
ning is easy; continuing is hard. With the right approach, you
can make continuing much easier. A key component in all the
approaches is the importance of measurement, but Im going to
stress the importance of not overlooking the people issues.
THE QUALITY MANAGEMENT APPROACHES

In Chapter 7 I described how the work of Mayo in the Haw-
thorne experiments and Shewhart in SPC in the 1930s initiated
quality management. Then in the 1970s there was a turning
point in business history. The oil crisis made businesses take a
good look at the way they did things. The first attempt at devel-
oping new business models came in the 1970s with the era of
cost cutting. Anyone who was around at that time remembers
what a brutal experience that was. Organizations would cut off
arms and legs to save weight but soon found themselves even
more dysfunctional. A major turning point came at the end of
the 1970s when Phil Crosby published his book Quality Is Free
(1979) and got peoples attention. Its title was provocative, but
it also coincided with the point when offshore competition was
showing the door to American manufacturing.
The quality management approaches all focused on differ-
ent issues. Deming was a statistician who focused very much
on measurement, but to be fair he also focused strongly on cul-
ture. He balanced the hard and soft skills. Juran, on the other
hand, was much more project and numbers focused; cost of
quality was a key issue with him. Crosby again had the balance
that Deming had. He talked about creating a quality culture,
and cost of quality was a key driver. All three approaches bal-
ance people and process.
Then we see ISO 9000. If Crosby was the success story of
the 1980s, ISO 9000 became the story of the 1990s. In just ten
years, 300,000 companies adopted the structure of ISO 9000;
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Chapter Twenty-Three: Choosing from the Menu 323
globally it entered the million mark in 2009. It was about cre-

ating a systematic approach to running an organization and
focused very much on process. Its weakness, however, was that
it ignored the people issues. As ISO 9000 gathered momentum
throughout the 1990s we also saw the emergence of Six Sigma
and kaizen, both continuous improvement methodologies.
Their strength came from a focus on quick financial savings,
which was much sought after in the early 1990s. Six Sigma has
a project focus, and kaizen focuses on speed of results.
The focus of each strategy could be summarized as
follows:
DemingMeasurement, culture
JuranProject, cost of quality
CrosbyCulture, cost of quality
StandardsSystem, process
Six SigmaProject, cost of quality
Throughout the 1990s we also saw the emergence of national
quality awards: the Canadian Award for Excellence (CAE), the
Baldrige Criteria, and the European Award (EFQM). The prob-
lem with the awards was that they were very big to deal with.
Organizations had trouble putting their arms around them.
However, we can see there is a flow: ISO 9000 creates the
framework, kaizen or Six Sigma then drives continual improve-
ment, and finally Baldrige or CAE gives you the prize you are
looking for. There is a lot more synergy than we at first realize.
You could call ISO 9000 the starter kit, with Baldrige, EFQM,
and the CAE being the ultimate prize.
IMPLEMENTATION PROBLEMS
People generally have had trouble implementing quality man-
agement. Business leaders havent always seen the value. They
understood what it was but didnt know how to apply it. You
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often hear that on the journey to quality there is no destination,

you just have to keep on forever. People need clear goals. The
solutions that have emerged have been to integrate quality man-
agement into the running of the business. Quality management
emerged in the 1970s because financial measures were not giv-
ing business leaders what they wanted. Now, post millennium,
we are starting to see a convergence as process management and
financial management are brought closer together. Further help
has come from putting a project focus into quality management.
One of the attractions of ISO 9000 is that it is seen as a project,
but one of its failures is that once organizations are registered,
people move on to other things. What has become much clearer
is that measurement is a key focus. Ill show you that measure-
ment of process performance is one of the common themes that
weve started to see emerging. One reason quality management
struggled in the 1980s was implementation. However, many peo-
ple implemented it very well. IBM is a good case in point. In the
1990s Motorola and GE built the momentum.
THE PRINCIPLES
If we look at ISO 9000, Baldrige, EFQM, and the CAE, along
with the principles on which they are based, they have remark-
able commonality. Ill remind you of the ISO 9000 principles,
which I described at the start of Chapter 20, and you will find
they repeat themselves in the Baldrige criteria, in EFQM, and
in the CAE.
ISO 9000 opens with saying that a successful organization
is customer focused. The job of the leadership is to set direction
and create objectives for the organization and then involve the
people in achieving those objectives. The most efficient way to
use an organizations resources is through process management.
An organizations processes need to come together as a system.
It must be a permanent objective of any organization to seek
continual improvement. Those who dont will be overtaken by
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the competition. The way we drive continual improvement is

through a factual approach to decision making. Finally, mutu-
ally beneficial supplier relationships give the greatest value to
the customer.
ISO 9000 Is Measurement Driven

ISO 9000:2000 is much more user friendly in non-manufacturing
than the old standard. Its structure fits with Baldrige and the
CAE and gives us an excellence model. The new standard
was developed with a structure like a business, based on the
PDCA cycle. Leadership involvement was inevitable because it
required business planning and the setting of measurable objec-
tives. Its driven by customer satisfaction, leading to measure-
ment at risk points inside an organization; this in turn creates
the continual improvement that the standard is looking for.
Again recall the PDCA cycle from Chapter 20 (see Fig-
ure 23.1), which starts off at the top of this model with the
leadership role being to plan and set objectives. Its called
management responsibility.
We collect data from the monitoring, analyze it, and use
the results of that analysis to drive improvement. This is where
youll start to see the linkage to the kaizen and Six Sigma meth-
odologies Ill be talking to in a few moments. Feedback from
this stage of the ISO model goes back to the leadership so deci-
sions can be made on resources. The PDCA cycle gives us a
model for excellence and a flow for the business.
You will recall from Chapter 20 that the approach to follow
in setting up this system is specified in the standard itself. We
start with a gap analysis and look at what the organization cur-
rently has. There are also probably holes in the system. Thats
what ISOs good at. It helps people close the gaps in their sys-
tems. Next you map the organization to identify how your key
processes link together. Later you define the processes in more
detail in the procedures that everyone is used to in ISO 9000.
However, each process must have an objective, and once weve
H1320 Merrill.indd 325 3/13/09 4:58:09 PM

Leadership
(Management
Responsibility)
Objectives are set,
responsibilities allocated,
and achievement monitored
so that resources can be
reallocated.
Measurement,
Analysis, and Improvement
Resources Management
The points where risk
The finite resources of
exists are monitored, from
the organization; skills,
customer, through
equipment, and services
operations, back to the
are allocated and
supplier. Data are collected
maintained.
and analyzed to drive
improvement.
Operations
(Product Realization)
Operations from receipt
of customer order through
design, procurement,
manufacturing, and service
delivery are planned and
controlled.
Figure 23.1 The PDCA cycle in ISO 9000.
got that in place we monitor whether we are achieving our

objectives at both a process level and a system level. Remem-
ber that auditing is system level monitoring. We analyze the
results of both process monitoring and system monitoring and
use the results to drive improvement.
A quality plan was developed in Chapter 20, and a simplistic
version showing objectives and measurements was included in
Chapter 11. Once objectives are set, the leadership must provide
resources to enable people to meet their objectives. Figure 23.2
shows the cycle that drives improvement in the business. The
numbers refer to the paragraphs in the ISO 9001 standard.
H1320 Merrill.indd 326 3/13/09 4:58:09 PM

Internal Audit
Management
Review
Customer
(5.6)
Feedback
(8.2.1)
(Allocate
(6.1) Action (8.5.2)
Executive
Summary
The information flow through this loop is driven by the

management representative in the same way that financial data
are driven by the financial controller. The linkage to Six Sigma
becomes unavoidable. As we act on the difference when we fail
to meet our measurable objectives, Six Sigma techniques kick
in. ISO 9000 brings our processes under control, and Six Sigma
then starts attacking and reducing process variation.
The aim of Six Sigma is to build knowledge that creates
commercial value.
Measurement30,000 Feet to 50 Feet

Before I explain the Six Sigma approach, I want to explain mea-
surement at the system and process levels. Its often referred
to as measurement at 30,000 feet and measurement at 50 feet.
In his early work, Deming made the point that 90 percent of
the output from a process is a result of the system in which
it operates. We try to change the output of a process when it
just aint going to happen because of the system in which it
is set. This is tampering at 50 feet because you havent got
a functional system within which the processes can operate.
ISO 9000 brings the system under control. It creates the frame-
work; it creates the linkage. Youve got a controlled situation.
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Kaizen and Six Sigma then start to work on reducing variation

in the process and ultimately in the system.
Let me remind you of an important sequence of thinking that
I explained in Chapter 11. By monitoring a process, we collect
data. Data are just numbers, but what we look for is patterns in
the data. When we find those patterns, we get information. How-
ever, we are looking for information that we can use. Knowledge
is information that we can act on. If that action creates improve-
ment, then weve created value. Ultimately, from all this work on
measurement, were looking for value for both the business and
the customer. The last section of ISO 9000 addresses this, taking
us very naturally into kaizen and Six Sigma, which is where we
find the tools for doing this improvement activity.
The Six Sigma Approach

In developing the Six Sigma approach, Motorola and GE looked
at the limited success of quality management in the 1980s and
built the answers to the weaknesses in quality management
implementation shown in the following table.
Main obstacles for

quality management Six Sigma solution
Leadership apathy Infrastructure
Separate from business Financial integration
Big concept Project focus
Education, not training Major training investment
Unclear goals Measurement driven
Product focus Process focus
Recognize that it was not quality management that had

failed; it was that a number of organizations had struggled with
its implementation.
The following have emerged as the critical success factors for
a Six Sigma implementation. I have linked these to the section of
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ISO 9000 where they will connect. As you develop your ISO 9000
quality system, you should be building on the components of
your future Six Sigma implementation at the same time:
Leadership (5.1 5.6) (Management Responsibility)
Customer Focus (5.2 + 8.2.1) (Customer Focus and Cus-
tomer Satisfaction)
Strategic Goals (5.3 + 5.4) (Quality Policy and Quality
Planning)
Project Selection (8.5 + COQ) (Improvement and Cost
of Quality)
Selection and Training of Champions (5.5.2 + 8.2.2)
(Management Representative and Internal Audit Team)
Metrics (8.1 + 8.4) (Measurement Plan and Data Analysis)
Resources (6.1) (Allocation of Resources)
Culture (0.2 ISO 9000) (Principles of Quality
Management)
Communications (5.5.3) (Communication)
The critical link between ISO 9000 and Six Sigma comes at the
end of the second phase of ISO 9000, System development.
When the processes have been defined, there needs to be an
assessment of opportunity. The cost of quality assessment I
described in Chapter 12 is the way to do this.
The discovery that 2540 percent of the organizations
resources are wasted by poor communication and reworking
information is a major factor in gaining leadership commitment
to the Six Sigma project. The leadership then needs to under-
stand the overall approach of Six Sigma, its project focus, and
the major investment in people to achieve the payback. The lead-
ership will need to create the infrastructure, which integrates
process measurement and financial measurement, and a member
of the leadership team will need to own the Six Sigma project.
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The Six Sigma approach follows these stages:

Assessment of opportunity and ability
Executive understanding
Development of infrastructure
Project selection
Training of cadre
Implementation
Using the cost of quality findings, the leadership must identify
areas for focus and set project objectives.
The members of the project teams must be carefully
selected through an interview. The organization should not
ask for volunteers, but it should look for commitment from the
people selected. The implementation timeline and the train-
ing plan can then be developed and shared with the members
of the organization. In choosing projects, it is best to initially
select issues that have high customer focus and that provide
significant payback. A full-time Six Sigma practitioner handles
five or six projects per year and targets between $50,000 and
$200,000 per project.
The projects are team based, so soft skills development should
not be overlooked when training team members. The hard skills
that people are typically trained to employ are as follows:
Process mapping
Cause and effect
Measurement systems analysis
Process capability
FMEA
Design of experiments (DOE)
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Six Sigma and Kaizen

Six Sigma and kaizen, which has become a crash attack ver-
sion of Six Sigma, are about attacking processes but within the
context of the system. Now you can see why you need ISO 9000,
which is about the system. You should, in fact, design your
ISO 9000 and Six Sigma strategies so that when youve devel-
oped your quality system using ISO 9000 you can move on to Six
Sigma or kaizen in a seamless transition. As I indicated earlier
in this chapter, once the quality system is developed, you should
look to reduce process variation, but in a system context. If you
narrow in on a particular process area where there is weakness,
you can reduce variation and cycle time. The attraction that kai-
zen and Six Sigma provide is rapid change. However, people
are impatient and often make change outside the context of the
system. When this happens, the change is only temporary. Its
like a crash diet. The weight only goes back on again. The other
thing that kaizen and Six Sigma provide is a project focus, and
of course the big attraction is projects are tied into the financial
system of the business, so you show dollar savings.
The approach for using the tools and techniques of kaizen
and Six Sigma is very similar to the approach for implement-
ing ISO 9000. First, an assessment similar to a gap analysis is
done. Whats the opportunity and whats our capability in the
organization? The leadership needs to recognize that a quality
management system is really just a management system, and
someone in the leadership must champion the system. Again,
these approaches are very similar to ISO 9000. Making ISO
implementation team based and creating a cadre helps enor-
mously, and this is similar in Six Sigma.
Also, development of the infrastructure is similar to
ISO 9000, and this is where a lot of people miss out in kaizen
and Six Sigma. Once the infrastructure is in place, you focus
on your project selection. ISO 9000 helps in infrastructure
H1320 Merrill.indd 331 3/13/09 4:58:10 PM

development, and then you narrow your focus to where the

projects will give you the best payback. Six Sigma and kai-
zen projects typically look for savings of between $50,000 and
$200,000 per project and achieve these through a number of
tools that have already been used in ISO 9000. Process mapping
always starts an ISO project. Measurement system analysis is
used in ISO 9000 system development. Six Sigma then brings
in additional tools and skills such as cause and effect, process
capability, FMEA, and DOE, which drive further improvement
after the quality system has been developed using ISO 9000.
CRITICAL SUCCESS FACTORS

If you focus on these factors at the outset of developing your
ISO 9000based quality system, you can then move into kaizen
very comfortably and very naturally. Leadership involvement
comes from building the ISO 9000 and Six Sigma initiatives
into the infrastructure of the business. Building strategic goals
into the initiative is critical, and in the short term, projects must
be selected with the right cost benefit. Project successes come
when projects are customer focused. The cadre of champions
has become a classic symbol of ISO 9000 and Six Sigma. Get-
ting into the details, the metrics that are collected, as I showed
earlier, have to create value and lead to improvement. Finally,
do not lose sight of the fact that were looking to create a cul-
ture that is based on quality management principles.
THE PRIZES
One of the things that has been a killer for many people engaged
in quality is that they want some kind of tangible recognition
for their achievements. And this brings us into the third area: the
prizes. ISO 9000 is a prize. You see the banners that people put
up indicating they have received registration. It is a great feel-
H1320 Merrill.indd 332 3/13/09 4:58:10 PM

ing of satisfaction. Baldrige may be considered the advanced

prizethe doctorate as opposed to the college certificate.
The management responsibility section of ISO links to the
leadership and planning sections of Baldrige. The product real-
ization and process management sections also link together.
The bottom line in both approaches isimprovement in business
results and in organization performance. With that similarity
and structure, you can see how ISO 9000 is the starter kit to set
up the structure, and kaizen provides the improvement tools.
You are then well positioned to move on to Baldrige.
EXCELLENCE
I showed you the ISO 9000 model earlier. You saw the Baldrige
model in Chapter 19. Although they are structured differently
youll see some remarkable similarities between excellence
models and ISO 9000. What becomes more and more impor-
tant as you go through these models is how the linkage between
different elements is critical. Thats written into ISO 9000 the
same way.
Leadership must set direction for the business and create a
strategic plan based on the information it has gained from lis-
tening to the customer. Measurement systems must be in place
so we can monitor how our processes perform, at both a sys-
tem and process level. Then you will see the important balance
between people and process in finally achieving the business
results. The business results have to be a result of cause and
effect. Not from happy accident.
The criteria of the national excellence models have brought
out some extra components of quality management that you dont
immediately see in ISO 9000, Six Sigma, and kaizen. Build in
these practices when you initially develop your ISO 9000 quality
system using standards like ISO 10015, Guidelines on Training.
Link the reward of leadership and employees to the principles
H1320 Merrill.indd 333 3/13/09 4:58:10 PM

on which the quality system operates. Deploy strategy and com-

municate the business plan to the people. Monitor and measure
employee participation and develop a plan for building external
partnerships. Link process results to financial results.
The initial activities of the three gurusDeming, Juran, and
Crosbygave us the quality packages that people worked on
throughout the 1980s. The 1990 evolved into a focus on ISO 9000,
which has now been redesigned to fit with the national excel-
lence models. ISO 9000 is in effect now a starter kit for the
excellence models, but it doesnt prescribe the tools that should
be used in driving continual improvement. Six Sigma and kaizen
give us tools for continual improvement; national awards then
give us the prize. Taking account of these factors in the initial
development of the quality system then allows smooth transition
as you graduate through each stage of the quality journey.
BROWSERS BRIEFING
The many approaches to quality management have

made the menu confusing.
Approaches like ISO 9000, Six Sigma, and the various
national awards are complementary.
A key component in all the approaches is the impor-
tance of measurement.
Crosby was the success story of the 1980s.
ISO 9000 became the story of the 1990s.
The 1990s saw the emergence of Six Sigma and kaizen.
The 1990s also saw the emergence of national quality
awards.
ISO 9000 creates the framework, and kaizen or Six
Sigma then drives continual improvement.
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Baldrige and the CAE can give you the final prize you
are looking for.
Post millennium, we are seeing a convergence of pro-
cess management and financial management.
90 percent of the output from a process is a result of
the system in which it operates.
ISO 9000 brings our processes under control.
Six Sigma attacks and reduces process variation.
When change is outside the context of the system, this
is only temporary.
The Six Sigma approach follows these stages: assess-
ment of opportunity and ability, executive understand-
ing, development of infrastructure, project selection,
training of cadre, and implementation.
It is best to initially select projects with high customer
focus and significant payback.
Target between $50,000 and $200,000 per project.
The cadre of champions has become a classic symbol
of ISO 9000 and Six Sigma.
Many people engaged in quality want some kind of
tangible recognition for their achievements.
ISO 9000 is a prize. Baldrige may be called the
advanced prize.
REFERENCE
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H1320 Merrill.indd 336 3/13/09 4:58:10 PM
24
The New Organization
The future is very important . . . it is where we will spend the

rest of our lives.
Joel Arthur Barker
I
n the last 1000 years we have seen the widespread develop-
ment of urban civilization. In the last 100 years, the modern
business organization has developed, and its models have
been the organizations of government and the military. In the
last decade we have seen the emergence of a new virtual type of
organization. Over the last millennium, government organiza-
tions were developed to retain the status quo and not respond
to change. Military structure relied on death in battle as a way
of ensuring new opportunities for the survivors.
In the past twenty years, North America woke up to the
need to redesign the business organization as we have known
it. At the start of this book, I talked about the vision of the orga-
nization. As you worked through each of the things you must
do, you almost unconsciously developed your own picture of
what your organization should look like. You probably see that
we are now looping back to the vision chapter at the start of
this process, but with much more concrete ideas than we had
the first time. The word continuous has developed even greater
337
H1320 Merrill.indd 337 3/13/09 4:58:10 PM

meaning. You have to build continuation into your process, or it

will become just a one-shot project that fades into obscurity.
Philip Crosby and James Belasco both talk about celebra-
tion of the passing of the old ways and the welcoming of the
new as reinforcing the move forward or rite of passage that
has occurred. Organizations find that after 1824 months, the
enthusiasm can fade. Sometimes a major event, such as a CEO
change or a change in business direction, can leave the quality
process out on a limb. This underlines the importance of inte-
grating the quality plan with the business plan.
The new culture of the organization, the new way of doing
things, the changes that have occurred since the start of the pro-
cess: all of these things need to be identified, and the differences
from the old culture and methods need to be clearly shown. The
most successful way of doing this is by celebrating the change.
Philip Crosby called it Zero Defects Day. Organizations have
used names such as Milestone Day and Hearts and Minds Day.
A self-assessment along the lines of the Baldrige criteria
at the beginning of the process and every six to nine months
afterward will tell you how far you have actually progressed.
The ISO 9000 internal audit, which I described in Chapter 22,
will keep driving change if you set improvement goals.
What are the things you expect to have changed when you
successfully cross the finish line of the quality marathon?
THE NEW VISION

You will be much clearer on who your customers are and what
they need from you. Everyone in the organization will under-
stand who their internal and external customers are, and will
realize that success will come only when these customers are
happy. Negative customer feedback will be seen as an opportu-
nity, and it wont be dismissed or argued away as some special
case that wont recur.
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Chapter Twenty-Four: The New Organization 339
Your ever-developing vision will be shared by all the peo-

ple in the organization. Everyone at some time during the year
will look at another organization, either on video or in person,
and will benchmark against other best practices. You will have
become a learning organization, and books and CDs will rein-
force the knowledge people have about what your organization
should look like.
You will be able to define your culture and have a clear
sense of what the values are inside your organization. You will
recruit people whose values are your values. Your people will
strive to understand their customers requirements and will insist
on operating processes that do it right the first time. They will
always look for new ways to improve themselves and their pro-
cesses. You will understand how your culture compares with
that of your community and your nation. A statement of those
values will be built into your quality policy, which people will
take as a simple fact of life.
Change will be welcomed, and everyone will be a par-
ticipant in change. People wont change people; people will
change themselves because of the desire to do things faster,
simpler, and better. Your organization will invest a significant
proportion of its time in change and improvement.
Your change process will be well defined, and you will
measure success in each aspect of this process. Everyone will
understand that the balance of people (soft skills) and process
(hard skills) is essential for continuous improvement, and the
process will have been shared with everyone in the organiza-
tion. The management team will review progress in the quality
process every month, and the QMT decisions will be rapidly
deployed into the appropriate parts of the organization by the
team member who represents that part. People will feel empow-
ered, and quality champions who are not business leaders will
have become members of the QMT. This will not have been
forced; it will be a natural development.
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The leaders of the organization will participate in the qual-

ity process every bit as much as the rest of the people. The
leaders will routinely measure processes they personally own
in order to improve the delivery they give to their internal cus-
tomer, and their measurement efforts will be visible to all. The
self-esteem of the organization will be high, as will the self-
esteem of the individuals and especially the leaders. The con-
sequence is that the leaders will be open and honest. They will
certainly be improving their skills.
Your business processes will have been mapped, and you
will have mapped at each department level. Each individual will
be clear on their responsibilities, and they will know who their
internal and external customers are, along with the require-
ments of those customers. After two years, most people will
have worked on five or six process problems with their internal
customers and will have arrived at successful conclusions. You
will have redesigned many of your process flows and cut out
excessive communication in your organization.
Measurement will have become an integral part of the cul-
ture. It will be used at all external customer interfaces, and
measurement partnerships with external customers will
drive business process improvement. The interdepartmental
measures (the second level of measurement) will show teams
how well they deliver to the next team in the chain, and indi-
viduals within those teams will measure their personal pro-
cesses, which will contribute to the team process. The tools of
measurement will be understood by everyone, and the mea-
surement successes will be on record. SPC will have been used
at certain points of complexity in the organization, but you will
be ready to use it on a much wider basis.
All measurement data will be fed into your continuous cost
of quality collection, and you will show reductions in cost of
quality that will be three, five, or ten times the investment you
have made in the quality process. Cost of quality will be under-
H1320 Merrill.indd 340 3/13/09 4:58:10 PM

stood as widely as measurement, and you will use it routinely

to communicate the effects of nonconformance.
The cost of quality output will feed input to corrective
action and you will have cross-functional teams, which will
increase from the five or six teams two years ago to a num-
ber that includes every employee in the organization. The cor-
rective action system will also be driven by external customer
issues, and your external customers will all know how to raise
a nonconformance issue within your organization.
You will be very clear that your investment in education
and training will be one of the best investments you can make
in your people and your organization, and everyone in the
organization will be hungry to acquire the next piece of knowl-
edge. This will be skills and knowledge about their processes,
and about improving their processes. Team leaders will have
become coaches and will be constantly seeking to improve
their coaching skills.
Among the skills the people will have developed will be
their communication abilities. They will be able to communi-
cate with each other more effectively because of the increased
trust and respect between them. You will probably still be
investing in development of peoples communication skills and
investing in communication technology, but being careful not
to eliminate interpersonal contact. You will be much more care-
ful about avoiding information overload, and your organization
will have developed an effective internal communication sys-
tem for team briefing.
The relationships between people in the organization will
have changed to a point where mutual trust and respect will
have increased, so teams operate on a very different basis.
Trust and respect will show itself in the way people recog-
nize the achievements of others. Both the organization and the
individuals within it will have high self-esteem, and people
will not feel threatened by the success of others. Rather, they
H1320 Merrill.indd 341 3/13/09 4:58:10 PM

will see this as contributing to the greater good of everyone.

Recognition will be both systematic in the organization and
spontaneous among individuals.
The quality journey will be continuous, and people will
always be looking for a better way to operate their business
processes and the quality improvement process. Benchmarking
partners will drive the organization to seek ever better ways
of doing this. Regular assessment of the quality process and
business processes, along with comparison with the benchmark
partners, will drive continuous improvement.
Above all, everyone in the organization will have taken
responsibility for making quality happen and will assume
that responsibility as a member of a team and not as an
individual.
I encourage you to use one of the quality management sys-
tem frameworks, such as ISO 9000, Baldrige, or EFQM, so that
you dont reinvent the wheel. You are capturing the knowledge
that subject matter experts have developed over the years. The
benefit of the self-assessment, or internal audit, components
of these models strengthens the continuation that I have been
describing.
However, there is a great danger in many quality manage-
ment system models. We can become inwardly focused even
though we measure customer satisfaction, analyze our cus-
tomer complaints, and repeatedly say we are customer driven.
All those drivers make us look inside our organization to drive
out inefficiency.
INTEGRATED MANAGEMENT SYSTEMS

The move from process focus to system thinking and the
success of ISO 9000 as a management system have led to
the development of management systems for environment
(ISO 14000), health and safety (OHSAS 18000), social respon-
H1320 Merrill.indd 342 3/13/09 4:58:10 PM

sibility (ISO 26000), information security (ISO 27000), and the

list goes on. The commonality in these systems has led people to
try to avoid repetition. Activities such as document and record
control, and corrective and preventive action are common to all
these systems. Back in the 1980s, DuPont saw the linkage of
quality and safety with the common principle of prevention.
Certain industries, such as the nuclear industry, have
developed an integrated system (standard N286). The nuclear
industry, however, is one that can digest a system of this size.
Generally speaking, the experience has been to link these sys-
tems rather than just merge them. The risk is in creating a sys-
tem that is not agile.
EXTERNAL THREATS AND

OPPORTUNITIES
The dot com crash of 2000 and the financial meltdown of 2008
tell us that the secure feeling people had as they entered the
new millennium was definitely misplaced. At the time of the
millennium, the only nervousness was fueled by the Y2K scam,
but even that had an upside as we started to pay more attention
to business continuity. We have internal threats as well. The
huge amounts of knowledge we are now generating mean that
many organizations do not know what they know.
The threat of terrorism is a symptom of a much deeper
issue. The equalization of wealth on a global scale is the driver.
Wealth is not just financial, but is also wealth of opportunity.
War and evil have morphed into different forms.
Planet Earth is under severe threat as a result of the crimi-
nal behavior of my professionchemical engineering. When
my generation of chemical engineers was being educated, the
total lack of regard for the environment and the community was
ultimately the result of the criminal values of the organizations
H1320 Merrill.indd 343 3/13/09 4:58:10 PM

funding the universities. I have written in detail elsewhere on

this matter.
It is not the purpose of this book to fully define these prob-
lems, much less to solve them. My purpose is to draw your
attention to them. Being aware of these problems draws you
into recognizing the need for a flexible organization.
They used to say a week in politics is a long time. That
is becoming true of business. A ten-year business plan has no
meaning; on the other hand, a new product portfolio with ten-
year strategies is essential.
As Darwin said, It is not the strongest of the species that
survive, nor the most intelligent, but the one most responsive
to change. Then to be responsive to change, our organization
must be agile.
THE AGILE ORGANIZATION

Through the turn of the century, organizations moved from a
hierarchical structure to a process managed structure. Qual-
ity management was a major factor in this change. Process
mapping, or flowcharting, a technique borrowed from the
chemical or process industries, showed far better the flow
of activity in an organization. When properly executed, it
also showed process responsibilities. This horizontal, or
customer focused, structure cohabited with the traditional
hierarchy. Leaders instinctively felt imperfections. This pro-
cess approach treated an organization as if it were a chemi-
cal plant. A series of processes were linked by pipes through
which the chemical or product flowed. There is still an inher-
ent rigidity. The methodology does not address the flow of
information in an organization, or if it does, it does so in a
very simplistic way.
Our experiences with IT systems and the Internet are help-
ing us understand the network theory far better and to see that
H1320 Merrill.indd 344 3/13/09 4:58:10 PM

an agile organization is more akin to the human body than to

a chemical plant. We want our organizations to be able to sing
and dance. A chemical plant cant do that.
The networked organization is not just networked electron-
ically, it is networked physically. Most people do not spend
their entire day in a cubicle; they interact physically. At the
time of writing we do not yet have the ability to interact from
remote locations other than through verbal transfer, with limited
emotional transfer. Until that time arrives, physical networking
retains considerable power when compared with electronic net-
working. The nonverbal communication or signals transferred
are a major part of the communications between people, as evi-
denced by the research of Albert Mehrabian. I go much deeper
into the idea of the networked organization in my book Innova-
tion Generation (2008).
You can, if you wish, keep driving out that last percent-
age of inefficiency and make yourself even more consistent and
reliable than the competition. However, let me ask you what
will happen if the market changes. What if the product or ser-
vice you provide today becomes yesterdays offering?
What if your business was in the business of processing
photographic film, renting videos, or supplying parts to an
original equipment manufacturer that makes SUVs consuming
gasoline at 15 mpg?
The world is changing fast, and with an effective quality
system you have the ability to change fast. You need to ask
yourself what your customers will need tomorrow. You need
to be willing to change the product or service you provide
today.
This takes you into the world of innovation. The good news
is that innovation is a process that requires an effective qual-
ity management system in order to be successful. Innovation
means preparing yourself for the needs of tomorrows cus-
tomer. Figure 24.1 shows the flow of the innovation process.
H1320 Merrill.indd 345 3/13/09 4:58:10 PM

s'ENERATINGopportunities
NEEDSh#REATORSv Creator #ONNECTOR
s,INKINGOPPORTUNITIES
TOsolutionsNEEDS
h#ONNECTORSv
s-AKINGIDEASpractical
REQUIRESh$EVELOPERSvAND
s'ETTINGTOmarketIS $OER $EVELOPER

THEJOBOFh$OERSv
Figure 24.1 The innovation process.
YOUR QUALITY MANAGEMENT SYSTEM

AT THE NEXT LEVEL: INNOVATION
Plato said, Necessity is the mother of invention. Innovation
starts with identifying a customer or market need that is not
being fulfilled. Importantly for the innovator, neither the cus-
tomer nor the market recognizes that need. Henry Ford said, If
I had asked my customers what they wanted they would have
said Faster Horses. Creative thinking is usually required at
this first stage. I have had a fortune cookie note on my notice
board for years that says, The secret of a good opportunity is
recognizing it.
Once the customer opportunity has been created, the next
step is solutioning, where most people recognize innovation
as taking place. Breakthrough innovation comes from finding
radical solutions. This is where connecting a product or pro-
cess from a totally different environment often leads to that
aha moment. This is exciting! This is the application of new
knowledge. Henry Fords ideas for mass production came from
seeing a meat processing factory and applying the idea to pro-
duction of motor vehicles.
H1320 Merrill.indd 346 3/13/09 4:58:10 PM

However, after this second stage we have only a concept.

We now have to develop a working solution. This is where the
developers take over. The third stage in the process of making
the solution work is where so many organizations lose momen-
tum and lose the advantage they gained in stages one and two.
Speed to market is essential. Discipline becomes vital. The say-
ing, Innovation is one percent inspiration and ninety-nine per-
cent perspiration is appropriate at this stage. This is where an
effective quality management system becomes imperative.
Finally, getting to market is where far too many stumble.
Members from the production, service, delivery, and sales
departments need to have been involved in the earlier stages
if you want a long-term and continuous innovation process.
They now have to run for the line. Every advantage we can
give them, especially time and advance notice, is essential. Too
many companies wrap their development activity in exces-
sive secrecy, presenting the sales and operations people with
a challenge for which they have no previous knowledge.
So use your quality management system to improve your
external focus as well as your internal efficiency. My book
Innovation Generation (2008) will tell you how to develop the
innovation process and culture that I have just described, or
you can go to my Web site, http://www.petermerrill.com.
QUALITY MANAGEMENT AND

SELF-MANAGEMENT
One of the biggest reasons organizations have failed to do it
right the first time is that everyone thought someone else would
do it. Reading this book isnt doing it. Until you and every-
one you work with individually and together accept that you
must move forward, it wont happen.
Passion and commitment are essential. Measurement and
analysis are essential. The two sides of the quality brain must
H1320 Merrill.indd 347 3/13/09 4:58:10 PM

ultimately blend, and when that happens it may be hard for

you to describe to others what has happened. The effect will be
exciting, and you will find yourself ever hungry for knowledge
and forever wishing to share your revelations with others. You
will applaud excellent service and speak out against organiza-
tions that abuse your custom.
This is part of the personal side of quality. The other side
of the coin is that we must start to work on our own day-to-day
activities. How do we start to build quality in our own work
processes? I find that people who get into quality management
intuitively sense the need for self-management, and that the
starting point for any quality journey is always with yourself.
All of what we have talked about in this book applies to us
as individuals; we can apply the principles of leadership, pro-
cess improvement, and personal improvement to our own lives.
Youll find it works far more quickly and easily if you share the
experiences in a buddy systembetter still if you share with
the team you work with, and best of all if you share with your
organization as a whole.
The first step is self-management and the recognition that
in the last analysis, we ourselves are responsible for the results
of our own actions.
BROWSERS BRIEFING
Celebrating the passing of the old organization is

essential.
The quality plan and the business plan must become
one and the same.
The difference between the new and the old organiza-
tion must be clearly shown.
H1320 Merrill.indd 348 3/13/09 4:58:10 PM

Overlooking this rite of passage will cause you to hit

the wall in your change process after about 18 months.
You must build physical and psychological momentum
to run through this wall.
To build this momentum, you will have to have a clear
vision of the quality organization you want to be.
Your values and culture will be clearly defined.
Your people will work for the customer, and not for a
supervisor.
Change will be welcomed, and you will be measuring
the effectiveness of your own change process, which will
balance process improvement with people improvement.
The leaders and the people will have a high sense of
self-worth and will be open and honest with each other.
The business process will be clearly defined, and
measurement will have become an integral part of the
culture.
You will benchmark with other successful companies,
and you will be an outward-looking organization.
You will communicate with your suppliers as enthusi-
astically as you do with your customers.
You will move to the next level and think about innova-
tion and tomorrows customer.
REFERENCE
ity Press.
H1320 Merrill.indd 349 3/13/09 4:58:10 PM

H1320 Merrill.indd 350 3/13/09 4:58:10 PM
Index
Page numbers followed by f refer to planning phase of, 303312

figures. prioritizing departments for,
305307, 307f
A process, 302303
action lists, 314315 registration, 267
actions reporting phase of, 303, 314315
corrective, xxxi, 159180, 296 selecting teams for, 304305
preventive, 178179, 296297 structure of, 303
administrators team assignments for, 307
for corrective action, 169171 timelines for, 308, 308f
for QMT meetings, 96
agendas B
for employee quality training Baldrige, Malcolm, 249250, 323
course, 191f Baldrige Award, 249250
for QMT meetings, 93, 9596 criteria assessment, xxxiiixxxiv
agile organizations, 344345 criteria framework of, 250252,
AIG Consulting, 305 251f
Allied Signal, 22 criticism of, 260261
Aluma Systems, 157 Customer Focus category of, 254
American Express, 1920, 243 Leadership category of, 252253
American Society for Quality (ASQ), Measurement, Analysis, and
xxi, 33, 48, 210, 249, 250 Knowledge Management
analysis, measurement and, 347348 category of, 255256
Armstead, Chris, 78 principles of, 324
Ashton Brothers, 122123 Process Management category of,
audits 257259
department involvement in, 309 Results category of, 259260
customer feedback form for, 315, Strategic Planning category of,
316f 253254
follow-up phase of, 303, 315318 Workforce Focus category of,
internal, 267, 301319 256257
interview phase of, 303, 312313 Barclays, 20
interview sheets for, 309311, 311f Basic Beliefs, of IBM, xxvii, 40, 65
351
H1320 Merrill.indd 351 3/13/09 4:58:10 PM

352 Index
Bayette, Bob, 108, 214 communication

Belasco, James, 338 body language and, 80
beliefs, 38 depth of, 9091, 91f
Bell Mobility, xxxiii, 205, 227228, effective tools for, 204205
232 horizontal, 203204
benchmarking, 24 interpersonal, 198202
BF Goodrich, 131 levels of, 103, 103f
Billing, John, xxxiixxxiii oral, 200
body language, 80, 199, 200201 quality and, xxxii
Bravograms, 205, 232, 233f records as tool for, 293294
briefing, team, 202203 span of, 91f
budgets, waste and, 13 technology for, 200
bureaucracy, as barrier to change, 67 of values, 103
business descriptions, 270 vertical, 202203
business process maps, 267, 268, written, 200
269, 288. See also process communication stage, of people
mapping improvement, 80, 197206
business reengineering, 118 competence
buy-ins, 309 assessing, 193194
training and, 192193
C continual improvement, 267, 318
Cadet Uniform Services, xxvii, 7, continuation, 237247
2223, 135 continuing education, 190192
Canadian Award for Excellence continuous improvement, 44, 317318
(CAE), 323 integrating cost of waste and,
principles of, 324 151154
Carey, John, 305 Japanese companies and, 69
change, xxviiixxix, 6173 steps in, 151, 162
actions for encouraging, 6465 corrective action, xxxi, 159180, 296
balancing people and process for, addressing bigger problems first
xxix for, 163164
barriers to, 6667 administrators for, 169171
budgeting time for investing in, defined, 160162
6971 flowchart for, 168f
and clerical staff, 64 goal setting for, 162163
key components of, 77, 77f management review and, 171f
levels of resistance to, 6366 obstacles to, 161
measurement and, 134135 process diagram for, 149f
model for, 7778 progress logs for, 169, 170f
process improvement model of, request form for, 169f
77, 78f solutions, 161162
questionnaire for assessing system, 166169
capacity for, 71f corrective action stage, 7980
recognition and, 228230 corrective action teams, 170
stress of, 6869 cost of quality, xxx, 79, 145158. See
change process, xxix, 5657, 7584 also cost of waste
Christy Towels, 5152, 54 reasons for interest in, 147148
H1320 Merrill.indd 352 3/13/09 4:58:10 PM

Index 353
cost of quality workshops, 152154 data, 294

agenda for one-day, 153f data collection, 271
cost of waste, 147f Deal, T. E., 47
calculating, 150f de Bono, Edward, 9, 292
concept of, 148151 de Geus, Arie, 35, 4041, 183
integrating continuous Deming, W. Edwards, xxix, 39, 76,
improvement and, 151154 82, 131, 302, 322, 323, 327,
typical examples of, 147148 334
using, 154156 department heads
Courtaulds Group, 4850 implementing quality plans and,
crises, vs. prevention, 102 9293
Crosby, Philip, xxviixxviii, 34, 38, process mapping and, 127129
39, 42, 49, 51, 65, 79, 83, depth of communication, 9091, 91f
204205, 322, 323, 334, 338 desk study, 311312
culture, 4758. See also quality DiLiddo, Bart, xxx, 131
culture Drucker, Peter, 55, 197, 273
desire to change, 52 DuPont, 343
different generations and, 5253
goals for, 5456 E
national, 6768 Eamer, Brian, 137, 154, 155
quality, 41 education, 183195. See also
selecting type of, 54 training
shared values and, 4952 agenda for QMTs, 187188f
stereotypes, 68 continuing, 190192
values as foundation of, 3839 half-life of, xxxii, 67
culture clash, 5354 just-in-time, 67, 80, 185, 190, 240
customer feedback forms, for audits, making time for, 7071
315, 316f misuse of, 6667
Customer Focus category, of Baldrige people improvements and,
Award, 254 xxxixxxii
customer responsiveness, small promoting, in organizations,
companies and, 2324 189190, 191f
customers top management and quality,
defining, 1920 185186
determining needs of, 1920 value of, 4041
feedback from, 2021 education stage, of people
leaders and, 18 improvement, 80
measuring satisfaction of, 2122 employees, agenda for quality
success and, 69 training course for, 191f
successful companies and, 78 empowerment, 92, 166
surveying internal, 126127 equipment myth, 4344
customer service representatives Error Cause Removal memo, 204
(CSRs), 2223 escorts, interview, 313
European Federation of Quality
D Management (EFQM) Award,
Dalzell, Brian, 183184 41, 323
Darwin, Charles, 61, 344 principles of, 324
H1320 Merrill.indd 353 3/13/09 4:58:11 PM

354 Index
excellence, 48, 249252, 325, 333334 Honey, Peter, 215

external partnerships, 223225 horizontal communication, 202204
house rules, 111112
F Hull, Treat, xxxii, 185
face-to-face communication, 202 Human Factors in National
failure, avoiding, in measurement, Excellence Awards, 41
142143 Human Resources Canada, 117118,
failure modes and effects analysis 127, 128f
(FMEA), 171178 Husky, 268
chart, 172173f
health care rating scale, 177178f I
rating scale, 174175f IBM, 89, 19, 83, 249. See also Basic
feedback, customer, 2021 Beliefs, of IBM
improvement and, 2324 IBM Solution Delivery Services, 309
The Fifth Discipline (Senge), 35, 41, 55 ICI Paints, 108, 214
flowcharting, 344. See also process Imai, Masaaki, 44, 159, 184, 314
mapping implementation problems, of quality
follow-up phase, of audits, 303, management systems, 323324
315318 improvement cycle, 277, 278f, 305f,
Ford, Henry, 346 326, 327f
Ford Motor Company, 243 improvement process, xxxxxxi
forms, list of, 267 planning, 239242
Four Absolutes of Quality (Crosby), improvements. See also quality
xxviii, 38, 65 improvement
14 Points (Deming), 83 continuation of, xxxiiixxxv
continuous, 44
G people, xxxixxxiii
Independent Market Operator (IMO),
Galvin, Bob, 321
22
gap analysis, 38, 267
individual, respect for the, 40, 52
Gedmintas, Arnold, xxvii, 22
Industrial Society, 202
General Electric, 243
information, 294
General Motors, customers and, 89
innovation, quality management
generations, in workplace, 5253
systems and, 346
Generation X, 53
Innovation Generation (Merrill), 10,
Generation Y, 53
45, 204, 224, 345, 347
Gerstner, Lou, 52
innovation process, 346f
goal setting, for corrective action,
developing, 10
162163
intangible products, process mapping
Godfrey, Blanton, 23
of, 125126
Google, 5556
integrated management systems,
342343
H internal audits, 267, 301319
hard skills, xxix, 77 internal customers, 136. See also
balancing soft skills and, 8284 customers
Hathaway, Bruce, 309, 315 form for surveying, 110f
Hawthorne experiments, 75, 322 surveying, 126127
H1320 Merrill.indd 354 3/13/09 4:58:11 PM

Index 355
interpersonal communication, 198 Kennedy, A. A., 47

202. See also communication King, Martin Luther, Jr., 37
interviewing, tips for, 313 KISS (keep it supremely simple)
interview phase, of audits, 303, principle, 133134, 138
312313 knowledge, xix, xxviii, 7, 49, 142,
interview sheets, for audits, 309311, 294, 295, 328
311f acquiring for improvement, 185
intuition, 201202 application of new, 346
The Intuitive Manager (Rowan), 201 as Bandwidth, 222
Investors in People standard, 41 as a product, 125126, 125f
Ishikawa, Ichiro, xvii, 82 training as application of,
ISO 9000, xxxiv, xxxv, 251252, 192193
263282, 322323, 325326 Kotter, John, 84
attraction of, 324 Kouzes, James, 104105, 201
consequences of, 284286
critical success factors for, 332 L
failure of, 324 Lafley, A. G., 52
measurement and, 325328 Lao-Tzu, 99, 100
plan-do-check-act (PDCA) cycle Latham, Bob, xxxiii, 205, 227228,
in, 264265, 265f, 326f 232
preventive action and, 178179 law of ten (Juran), 149150
principles of, 264, 279280, 324 leaders
as prize, 332333 common fundamental practices of
Six Sigma and, 329 successful, 104106
ISO 9001, xxxiv, 264 communicating values and, 103
requirements, 266f feedback from customers and,
setting objectives requirement of, 2021
273274 meaningful measurement and,
ISO 26000 (Social Responsibility), 107111
41, 55 meetings and, 106
personal characteristics admired
J in, 105
Johnson, Gordon, 5152, 54 quality education and, 185186
Juran, Joseph, xxviii, 39, 76, 79, 82, role of, in PDCA cycle, 272273
88, 145, 149150, 323, 334 showing quality leadership to
Juran Institute, 249 teams and, 111113
just-in-time education, 67, 80, 185, surveying internal customers and
190, 240 suppliers and, 110111, 110f
talking to customers and, 18
K teams and, 106107
kaizen, 323, 325, 328, 333 leadership, xxviiixxix, 99114
Six Sigma and, 331332 excellence and, 333334
Kaizen (Imai), 44, 314 showing, to teams, 111113
Kanter, Rosabeth Moss, 227, 229, 231 time management and, 108109,
Kearton, Frank, 49, 51 109f
keep it supremely simple (KISS) Leadership category, of Baldrige
principle, 133134, 138 Award, 252253
H1320 Merrill.indd 355 3/13/09 4:58:11 PM

356 Index
The Leadership Challenge (Kouzes Measurement, Analysis, and

and Posner), 104105 Knowledge Management
leadership commitment, xxviii category, of Baldrige Award,
Leading Change (Kotter), 84 255256
Legal & General, 157 measurement champions,
LePage Adhesives, 19, 242 implementing quality plans
L.L. Bean, 243 and, 9293
lower control limits (LCLs), 139 measurement check sheets, 136, 136f
Luke, David, 210 meetings. See also quality
management team (QMT)
M meetings
Maier, Norman, 100 as barrier to change, 66
management review, 277279, evaluation questionnaire for, 224f
315318 obstacles to effective, 219221
for corrective action, 171f team effectiveness and, 106
management systems, integrated, teams and, 213221
342343 virtual, 221223
Mancusi, Joe, 201 Mehrabian, Albert, 80, 199, 345
manuals middle managers, change and, 64
objectives, 267 Milliken, Roger, xxi, 4344
policy, 267 Mitel, 155, 156, 157
quality, 270, 289290 moment of truth matrix, 242, 243f
Martell, John, 313 monitoring, 203, 326
Maschmeyer, Dennis, 108 internal audit and, 315, 317
Mayo, Elton, xxix, 75, 82, 322 measurement and, 138, 266f, 275,
McGill, Marion, 317 276277, 278f, 305f
measurement, xxx, 7879,131143
analysis and, 347348 N
avoiding failure in, 142143 national culture, 6768
changing behavior and, 134135 National Institute of Standards and
checksheet for, 108, 109f Technology, 250
creating partnerships of, 135136 national quality awards, 323
ISO 9000 and, 325328 networked organizations, 345
leaders and, 107111 networking, 203204
matrix, 132, 133f neuro-linguistic programming (NLP),
meaningful, xxx 198199
monitoring and, 138, 266f, 275, Nightingale, Alan, xxi
276277, 278f, 305f NLP Institute, 198
plan, 133f, 276f nonverbal signals, 199
planning, 132
Six Sigma and, 140142 O
stages to, 132134 objectives, 268
statistical process control for, levels of, 268, 270f
138140 setting, 273275
teamwork in, 137138 timeline, 274
tools, 136 objectives manuals, 267
H1320 Merrill.indd 356 3/13/09 4:58:11 PM

Index 357
Ontario Hydro, 81 receiving feedback in, 276277

Ontario Power Generation (OPG), 22 role of leaders in, 272273
operating procedures, 267, 270271 planning phase, of audits, 303312
operational staff, change and, 64 policy manuals, 267
oral communication, 200 Posner, Barry, 104105, 201
organizations The Practice of Management
agile, 344345 (Drucker), 55, 273
Baldrige Award for assessing, prevention
249250 vs. crises, 102
ISO 9000 for assessing, 251252 taking time for, 43
networked, 345 team values and, 102
promoting education in, 189190, time and, 42
191f value of, 4142
reactive, xxxiv preventive action, 178179, 296297
renovating, 31 problem solving
thinking-learning, xxxiv QMTs and, 94
ownership, process, xxx steps in, 164166
procedures
P operating, 267, 270271
partnerships quality system, 291293
external, 223225 process audits, 302303
for measurement, 135136 process improvements, 78f, 7880,
PDCA cycle. See plan-do-check-act 267
(PDCA) cycle corrective actions and, xxxi, 7980
peer pressure, 93 cost of quality and, xxxxxxi, 79
people measurement and, xxx, 7879
investment in, 41 process ownership and, xxx, 78
valuing, 41 process management, 76
people improvements Process Management category, of
communication and, xxxii Baldrige Award, 257259
communication stage of, 8081 process mapping, 120122, 268, 344
education and, xxxixxxii department heads and, 127129
education stage of, 80 example of, 124f
recognition and, xxxiii golden rules for, 122123
recognition stage of, 8182 instructions for, 121f
teamwork and, xxxii internal customers and, 126127
teamwork stage of, 81 methodology, 123125
performance management, 193194 for tangible and intangible
performance reviews, 193194 products, 125126
Philip Crosby Associates, 249 process ownership, xxx, 78, 117130
plan-do-check-act (PDCA) cycle, building foundation for, 118119
264265, 265f, 325, 326f establishing, with process
elements of, 286288 mapping, 120122
making resources available in, 275 most common example of lack of,
management review in, 277279 119120
planning role in, 273 Procter & Gamble, 52
H1320 Merrill.indd 357 3/13/09 4:58:11 PM

358 Index
products, tangible and intangible, roles and responsibilities

125126 document for, 95, 95f
progress logs, for corrective action, setting standards and, 96
169, 170f quality manuals, 270, 289290
quality plans, 267, 268, 288289
Q implementing, 90
QMT. See quality management team supporting implementation of,
(QMT) meetings; quality 9296
management teams (QMTs) timelines for, 8890
quality quality policies, 4445
cost of, xxxxxxi, 79 quality process, sales staff and, 43
defining, 3940 quality statements, 4445, 267,
poor communication and, 80 268269
quality awards, national, 323 quality system procedures, 291293
quality culture, 41, 45, 4749 quality systems, successful, common
quality improvement, 12. See also factors of, xxvi
improvements quality training course agenda, for
quality improvement plans, driving, employees, 191f
242243 Quality Trilogy (Juran), 83
quality initiatives, xxv quality values. See values
common factors of successful,
xxvi R
success and failure rates of, xxv Rayfield, David, xxx, 155, 157158
Quality Is Free (Crosby), xxvii, 34, reactive organizations, xxxiv
322 recognition, xxxiii
quality management systems change and, 228230
developing, 267270 developing a system for, 230233
implementation problems of, recognition stage, of people
323324 improvement, 8182, 227234
innovation and, 346347 records, 295
planning phase of, 266270 as communication tool, 293294
self-management and, 347348 defined, 293
system assessment for, 267, list of, 267
272 mandatory, 295f
system development for, 267, references, defined, 293
270271 registration audits, 267
quality management team (QMT) reporting phase, of audits, 303,
meetings. See also meetings 314315
administrators for, 96 respect, 210
agendas for, 93, 95 activity-oriented approach to, 210,
conducting, 9396 211213
quality management teams (QMTs), exploratory approach to, 210211
89, 92 for individuals, 40, 52
education agenda for, 187188f Results category, of Baldrige Award,
modus operandi for, 93, 94f 259260
problem solving and, 94 retreats, for visioning process, 31
H1320 Merrill.indd 358 3/13/09 4:58:11 PM

Index 359
reviews, performance, 193194 stereotypes, cultural, 68

RHM, 157 Strategic Planning category, of
Rizzo, Paul, 83 Baldrige Award, 253254
Robinson, Peter, 102 success, 45
Romark Logistics, 277 barriers to, 1011
Ronaldo, Cristiano, 193 customers and, 69
routines, 292 process of, 56
successful companies, customers and,
S 79
sales staff, quality process and, 43 Sullivan, Sondra, 118
Sarbanes Oxley legislation, 55 Sun Tzu, 71
satisfaction, measuring customer, supervisors, change and, 64
2122 Sur Petition (de Bono), 9
Savage, Peter, 215 Swain, Bob, 277
Sayer, Brian, 8788 SWAT team traps, 166
school paradigm, xxxi swim lane technique, of mapping,
Sears, xxxiv 123124
Sears Supplier Quality Partnership,
xxxiv T
self-management, quality tangible products, process mapping
management and, 347348 of, 125126
Senge, Peter, 35, 41, 55, 263 Tansey, Deborah, 277278
Sherritt Gordon, 107108 Taylor, Martin, 20
Shewhart, Walter, xxix, 7576, 82, team briefing, 202203
322 teams
simplicity, xix assigning, for audits, 307
Simplicity (de Bono), 292 audit, selecting, 304305
Six Sigma, 140142, 323, 328330 core activities of, 106107
ISO 9000 and, 329 foundations of, 209213
kaizen and, 331332 meetings and, 106, 213221
project teams and, 330 mothering of, 215
stages of, 330 questionnaire for members of,
sixth sense, 199 215219, 216218f
small companies, customer scoring key for, 220f
responsiveness and, 2324 showing quality leadership to,
soft skills, xxix, 76, 77 111113
balancing hard skills and, 8284 Six Sigma and, 330
Solcz, Michael, Sr., 23 team values, 101103
Solectron, 313 prevention and, 102
span of communication, 91f teamwork, xxxii, 81, 207226
SPC. See statistical process control in measurement, 137138
(SPC) questionnaire, 216220f
State Farm Insurance, 910 teamwork stage, of people
statistical process control (SPC), 76, improvement, 81
138140 thank-you letters, 232
charts, 139, 139f thinking-learning organizations, xxxiv
H1320 Merrill.indd 359 3/13/09 4:58:11 PM

360 Index
time, 243246 communication of, 34

investing in, for corrective action, development of, 3334
161 reading books for, 3435
investing in change and, 6971 retreat approach to, 31
prevention and, 42 shared, 30
timelines in stages, 32
for audits, 308, 308f
objectives, 274 W
time logs, for leaders, 108109, 109f
Wahl, Quentin, xxvixxvii
Townsend, Bruce, 122123, 232
Wallace, C. S., Jr., xxv, 24
training, 185. See also education
Wallace Company, 260
competence and, 192193
waste, 1112. See also cost of
Tremaine, Howard, xxxiv
waste
trust, 210
budgets and, 13
eliminating, 1415
U finding, 1214
upper control limits (UCLs), 139 Watson, Thomas, Sr., xxvii, 38, 39,
U.S. National Quality Award, 249 40, 52, 65
Welch, Jack, 321
V Who Cares Wins (Savage), 215
Valiant Machine and Tool, 23 Workforce Category, of Baldrige
values, 3746 Award, 256257
building, 5657 workplaces, generations in, 5253
communicating, leaders and, 103 workshops
defining quality as basic, 3940 cost of quality, 152154, 153f
education and, 4041 in QMT education agenda,
as foundation of culture, 3839 187188f
prevention and, 4142 in quality training course agenda,
respect for education as, 40 191f
shared, culture and, 4952 written communication, 200
statement, 4445
team, 101103 X
vertical communication, 202203 Xerox Corporation, 243, 249
veteran generation, 5253
vice presidents, change and, 63 Y
Viceroy Homes, 317
virtual meetings, 221223 Yurek Pharmacy, 176
vision/visioning, 2936, 338342
activities for, 3435 Z
building for, 5657 Zero Defects Day, 338
H1320 Merrill.indd 360 3/13/09 4:58:11 PM

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Merrill, Peter Do It Right The Second Time, Second Edition Benchmarking Best Practices in The Quality Change Process

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Do It Right the

H1320 Merrill.indd i 3/13/09 4:57:54 PM

Innovation Generation: Creating an Innovation Process and an Innovative

The Making of a World-Class Organization

How Organizations Learn: Investigate, Identify, Institutionalize

Executive Focus: Your Life and Career

ISO 9001:2008 Explained, Third Edition

Root Cause Analysis: Simplified Tools and Techniques, Second Edition

The Certified Manager of Quality/Organizational Excellence Handbook:

Enabling Excellence: The Seven Elements Essential to Achieving

The Certified Six Sigma Black Belt Handbook, Second Edition

Process Improvement Using Six Sigma: A DMAIC Guide

To request a complimentary catalog of ASQ Quality Press publications,

H1320 Merrill.indd ii 3/13/09 4:57:54 PM

ASQ Quality Press

H1320 Merrill.indd iii 3/13/09 4:57:54 PM

Printed on acid-free paper

H1320 Merrill.indd iv 3/13/09 4:57:54 PM

H1320 Merrill.indd v 3/13/09 4:57:55 PM

PART I THE REASON . . . . . . . . . . . . . . . . . . . . 1

Chapter 1 Why Are We Doing This? . . . . . . . . . . . 3

Chapter 2 The Customer . . . . . . . . . . . . . . . . . . . . . 17

H1320 Merrill.indd vii 3/13/09 4:57:55 PM

Measuring Customer Satisfaction . . . . . . 21

PART II THE FOUNDATION . . . . . . . . . . . . . . . 27

Chapter 3 The Vision . . . . . . . . . . . . . . . . . . . . . . . . 29

Chapter 4 Quality Values. . . . . . . . . . . . . . . . . . . . . 37

H1320 Merrill.indd viii 3/13/09 4:57:55 PM

PART III THE CHANGE. . . . . . . . . . . . . . . . . . . . 59

Chapter 6 Resistance to Change . . . . . . . . . . . . . . . 61

Chapter 7 The Change Process . . . . . . . . . . . . . . . . 75

Chapter 8 The Quality Management Team:

H1320 Merrill.indd ix 3/13/09 4:57:55 PM

The Teams Core Activity . . . . . . . . . . . . 106

PART IV THE PROCESSES . . . . . . . . . . . . . . . . . 115

Chapter 10 Process Ownership . . . . . . . . . . . . . . . . . 117

Chapter 11 Measurement . . . . . . . . . . . . . . . . . . . . . 131

Chapter 12 Cost of Quality . . . . . . . . . . . . . . . . . . . . 145

H1320 Merrill.indd x 3/13/09 4:57:55 PM

Integrating Cost of Waste and Continuous

Chapter 13 Corrective Action . . . . . . . . . . . . . . . . . . 159

PART V THE PEOPLE . . . . . . . . . . . . . . . . . . . . 181

Chapter 14 Education . . . . . . . . . . . . . . . . . . . . . . . . 183

Chapter 15 Communication . . . . . . . . . . . . . . . . . . . 197

H1320 Merrill.indd xi 3/13/09 4:57:55 PM

Horizontal Communication . . . . . . . . . . . 203

Chapter 16 Teamwork . . . . . . . . . . . . . . . . . . . . . . . . 207

Chapter 17 Recognition . . . . . . . . . . . . . . . . . . . . . . . 227

PART VI THE CONTINUITY . . . . . . . . . . . . . . . 235

Chapter 18 Continuation . . . . . . . . . . . . . . . . . . . . . . 237

Chapter 19 Using the Baldrige Criteria to Assess

Chapter 20 ISO 9000: How to Make It Happen . . . 263

H1320 Merrill.indd xii 3/13/09 4:57:55 PM

If You Dont Keep Score, Its Only

Chapter 21 ISO 9000: Less Procedures, More

Chapter 22 Internal AuditInvolve People,

H1320 Merrill.indd xiii 3/13/09 4:57:55 PM

Reporting Findings (Phase 3). . . . . . . . . . 314

Chapter 23 Choosing from the Menu . . . . . . . . . . . . 321

Chapter 24 The New Organization . . . . . . . . . . . . . . 337

H1320 Merrill.indd xiv 3/13/09 4:57:55 PM

Figure 6.1 How do we handle change? . . . . . . . . . . . . . . . . . . . 71

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