Transcript Six Sigma for Managers Introduction to SSFM (Module 1
A Strategic Look at Deming’s System of Profound Knowledge
ASQ Orange Empire November 1, 2013 Dr. Phillip R Rosenkrantz Professor Emeritus, Cal Poly Pomona
Quality Contributions to Strategic Planning
Leadership aspects (Deming SPK & Baldrige Award) Systems thinking (Not ingrained in strategic planning) Tools for analyzing SWOT and including VOC
Outline
Objective – Show how systems and stakeholder driven quality tools can be used in strategic planning
Part 1 Impact Overview of Dr. Deming’s Teachings and
Part 2 – Primer on Traditional Strategic Planning
Part 3 – Integration of Quality Tools with Examples
Ex. 1 - Affinity Process – SWOT Analysis Ex. 2 - Affinity Process – Plan Implementation Ex. 3 - Affinity Process – Trend Analysis Ex. 4 - Kaizen for Management – Marketing Campaign Ex. 5 - QFD – Stakeholder Review of Strategic Plan
Part 1 History of Quality and Overview of Dr. Deming’s Teachings and Impact -
Dr. W. Edwards Deming Is known as the Father of the Japanese Post-war Industrial revival and was regarded by many as the leading quality guru in the United States.
Dr. W. Edwards Deming
In addition to his other education, Dr. Deming studied under Walter Shewhart who introduced SPC. Dr. Deming worked with census data for the U.S. Government.
During WWII he was asked to implement SPC and Acceptance Sampling for the defense industry. After WWII American management went back to their former inspection-based methods.
Reviving Japan
Deming was invited to Japan around 1950 by Japanese industrial leaders and engineers. He guided them on how to implement quality control.
Awarded Second Order of the Sacred Treasure Japanese scientists and engineers named the famed Deming Prize after him.
Out of the Crisis
Due to popular demand Deming conducted an intensive four-day seminar for managers and educators across the country Deming published an explanation of his philosophies and concepts for managers in 1986 in his book:
Out of the Crisis
Deming’s first book expounded on some of these concepts as well titled:
The New Economics (1984, 2000)
Deming’s 14 points for Management
The 14 points are the basis for transformation of American industry. Not simply a matter of solving problems Management is responsible for creating the culture and improving the systems they operate with.
The 14 points apply to all organizations.
Deming’s
14 Points for Management
1. Create constancy of purpose 2. Adopt philosophy of prevention 3. Cease mass inspection 4. Select a few suppliers based on quality 5. Constantly improve system and workers 6. Institute worker training 7. Instill leadership among supervisors 8. Eliminate fear among employees 9. Eliminate barriers between departments 10. Eliminate slogans 11. Remove numerical quotas 12. Enhance worker pride 13. Institute vigorous training 14. Take action
Deming’s
Seven Deadly Diseases of Management
Lack of constancy of purpose Emphasis on short-term profits Evaluation by performance, merit rating, or annual review of performance Mobility of management Running a company on visible figures alone Excessive medical costs Excessive costs of warranty, fueled by lawyers who work for contingency fees
Deming’s System of Profound Knowledge
Deming advocated that all managers need to have what he called a System of Profound Knowledge, consisting of four parts:
Appreciation of a system
: understanding the overall processes involving suppliers, producers, and customers (or recipients) of goods and services.
Knowledge of variation
: the range and causes of variation in quality, and use of statistical sampling in measurements.
Theory of knowledge
: the concepts explaining knowledge and the limits of what can be known.
Knowledge of psychology
: concepts of human nature.
Essential Deming
It’s About Leadership & Transformation
Management is responsible for the system and for managing processes with continuous improvement. Manage change, not results.
Management needs to understand the difference between common cause variation and assignable cause variation and manage accordingly Best efforts are not good enough. Need continuous improvement based on theory and knowledge. Cooperation —not competition. Management needs to understand people and how to lead them.
What Does Strategic Planning Mean to You?
Articulated Plan: Mission, Vision, SWOT (Strengths, Weaknesses, Opportunities, Threats), Goals, Plans Strategic Differentiation - Market data, Customer feedback, Environmental Scan (Internal & External) Three levels: Strategic, Tactical, Operational Organizational Engagement - Goals cascaded to operator level Organizational Transformation - Quarterly reviews and appropriate training
Environmental Scan
Complete prior to vision and mission objectives External Scan Threats and Opportunities Internal Scan Strengths and Weaknesses
Modifications and Improvements to SP Using Quality Tools
Baldrige Criteria Leadership, planning, process control, and customer satisfaction and feedback are evaluated and rated. The Learning Organization (Senge) Shared vision is crucial for long run success Affinity Diagram/Interrelationship Diagraph Use for problems, trends, SWOT analysis for root cause analysis, driving trends, strategic goals
Modifications and Improvements (cont’d)
Quality Function Deployment Ultimate approach for identifying the “voice of the customer” and designing an efficient system around their requirements. Many variations.
Lean/Six Sigma/Total Quality Management a.k.a. Continuous Quality Improvement.- Useful tools if leadership is supportive and understands what is going on.
CEO Attitudes and Motivations: Are they Different for High-Performing Organizations?
ASQ Journal of Quality Management, 2012 Milan D. Larson, John R. Latham, Charles A. Appleby, Carl L. Harshman
Introduction
Findings of an exploratory study that compared the motivations and attitudes of CEOs from MBNQA winning companies to: Successful CEO’s of non-MBNQA winners Average employees Is there a difference between Baldrige recipient leaders and non-Baldrige recipient leaders?
What are the most effective method to institutionalize leadership development?
Introduction (cont’d)
Other than anecdotal stories, not much is known about leading through a transformational process Employees become cynical and lose motivation because of inconsistencies with the top leaders’ behavior To sustain positive direction leaders must demonstrate consistent behaviors that will lead a successful transformation Study was aimed at understanding the attitudes and behaviors of successful transformation leaders
Research Questions
Do top leaders that achieve Baldrige Award Recognition somehow differ in motivation and attitudes than non-Baldrige transition leaders? (Early research on leadership was focused on traits and personality characteristics) Which factors are different compared to other effective leaders?
How do these motivational and attitude factors effect leading the journey to performance excellence?
Findings and Results
Identified 35 key variables from over 200 variables studied The 35 key variables were organized into five categories Leader behavior Leader approaches Forces of change Culture The individual leader
Findings and Results
Six areas where there was significant difference between Baldrige CEOs and non-Baldridge CEOs
Evolution
– more likely to drive continuous improvement
Focus on Systems
– strongly motivated to work on systems and processes
Sole Responsibility
– Less likely to think sole responsibility is important
Focus on the Past
– Studied the past to make better decisions in the future
Focus on Information
– strongly motivated to work with facts and knowledge
Tolerance
– More intolerant of people who are not on board with the transformation
Conclusions and Potential Applications
Strategic thinking permeates all the major differences Strong alignment and confirmation of Deming and the System of Profound Knowledge as well as other systems thinkers like Peter Senge Quality tools can be used to enhance the strategic planning process
Affinity Diagram and Interrelationship Diagraph (Cross Impact Matrix)
Very useful quality tool for root cause analysis during problem solving.
While not often taught, this process is very effective to use during strategic planning SWOT Analysis Underlying problems for implementing SP Underlying trends (from external scan?) that affect SP
Affinity/Interrelationship Process
Through stakeholders or research, identify problems and put on post-it notes. Organize notes into major categories and sub categories. Try to get the under 20 sub-categories. Under 15 is better.
With participation from stake holders, evaluate each pair of problems in the sub category to see how much one problem impacts or contributes to the other. Score impact using a rubric.
Affinity/Interrelationship Process (cont’d)
Row totals indicate degree to which a problem drives other problems Column totals indicate the degree to which a problem is influenced by other problems Row minus Column Totals are ranked from highest to lowest. Highest ranks suggest that the problem is a root cause problem. Lower rank indicates a resulting problem. Root cause problems are probably what should be addressed with the highest priority.
Sample Problem related to Team Projects: Major Category External Factors
Physical Issues
Other pressing issues Other class needs Restricted access to resources Inadequate/Non-working software No way for multiple people to input Meeting place
Instructor
Too picky Not enough instructions Guidelines unclear Impractical expectations
Problems with Team Projects: Major Category People
Personal issues
Lack of knowledge/ understanding Absenteeism Surface learning Not working on weaknesses Mental problems Physical problems/illness Lifestyle issues Procrastination
Motivation
Lack of respect for each other Members failing to perform Blame game Unequal motivation/dedication People not “on-board” Apathy/lack of interest
Compatibility
Differing opinions Personality conflicts Closed-minded members Personal relationships interfering with professionalism Misunderstanding of team roles Knowledge not uniform Too many team members
Communications
Failure to communicate Team doesn’t prioritize Not rehearsing as a whole team Work not checked What did professor want?
Final product that is legitimate Time not used constructively Schedule conflicts for meeting together Lack of concentration during meetings Forgetting meeting info People who don’t speak up
Problems with Team Projects: Major Category Organizing
Leadership
Lack of a good team leader No leader to control the quality of work People just following one person Someone takes over and does too much Missing/bad leadership
Final Project
Inadequate research Not enough data Working too fast and making errors Not enough collaboration Last minute work going unchecked Slides have too much information Not enough information/examples Material does not relate to project Too many details in presentation Spelling errors Not practicing Not reviewing work prior to submission
Completing Work
Disorganized Wrong objective Equal distribution of work Record keeping is minimal/missing Not enough time Not scheduling Not following the schedule Poor time management Bad training Individuals not prepared Distractions/downtime Being stuck on one part Bad data collection Tampering with data Underutilizing strengths Not following procedures
Example of problems inhibiting success of student projects
Spring 10 1. Physical Issues 2. Instructor 3. Personal Issues 4. Motivation 5. Compatibility 6. Communications 7. Leadership 8. Completing Work 9. Final Project Col Tot
Example 1
Private School Strategic Planning Developed lists of: Strengths Weaknesses Opportunities Threats Took top 5 or so of each and developed cross-impact matrix for affinity process Assessed impact of each SWOT item on all others Ranked Row-Column Totals to illuminate critical Threats and Weaknesses or Highest Potential Strengths & Opportunities
Example 1 – Cross Impact Matric used for SWOT Analysis
no Item 18 New facilites 13 Leased facilities 20 Staff Devel.
7 Facilities 9 Cash 17 Fin Aid 22 World View 6 Technology 4 Safe Environ.
21 Build Board 8 Academics 12 Transition 16 Comm Outreach 3 Teachers 14 Competiton 1 Staff 19 Advancement 2 Atmosphere 11 Tuition Cost 5 Accred/Reputation 15 PR & Comm 10 9-12 Enroll 1 2 1 1 1 2 1 2 1 1 1 2 2 2 1 2 1 2 2 2 1 1 1 1 1 3 1 1 1 2 1 2 1 2 4 1 2 1 5 2 2 2 2 1 1 1 1 2 1 1 2 1 2 1 2 2 2 2 2 1 2 2 1 2 1 1 1 2
21
1 2 1
17 19 7
2
25
6 1 1 1 1 1 1 2 1 1
9
7 2 2 2 1 1 1 1 2 1 1
12
8 1 1 2 1 1 2 1 2 1 2 1 1 1 1
17
9 2 1 10 2 2 2 2 1 2 1 11 1 2 1 2 2 2 12 2 13 2 14 2 1 2 1 2 2 1 1 1 1 15 2 1 1 1 1 2 2 16 2 1 2 17 1 18 2 19 2 2 1 2 2 2 1 1 20 2 21 2 2 1 22 1 2 1 2 2 2
10
1 2 2 2 2 1 2 2 1 1 2
28
1 2 1 2 1 2 2
20
1 2 2 1 1 1 2
14
2 1 1 1
7
1 1 1
9
2 1 2 2 2 1 1 2 2 1 2 1
27
1 1
5
2 2
5
1 2 1 1 2 2 2
13
2 2 1 1 1 2
20
2 2 2 2 1 1
12
1 1 1
8
1 1 2 1
6 21 19 9 10 22 5 17 2 7 11 14 12 13 16
9 11 18 15 7 19 11 22 19 14 13 14 14 11 R 30 21 19 21 19 11 11 12
Rk
C
6 18 20 15 1 4 8 3
R-C 12 5 5 8 13 17 9 12 10 14 9 7 7 6 6 4 6 8 16 14 6 19 11 23 21 17 21 -1 -2 -3 -8 25 -11 27 -13 29 -18 1 0 0 3 3 2 1
Rk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Use Results to Develop Strategic Goals
Top four driving SWOT items New facilities (Opportunity) Leased facilities (Threat of loss) Staff development (Opportunity) Facilities (Weakness)
Strategic Goal #1 - Facilities
Short-term goals:
Plan for separate sites for K-6 and 7-12 grades. Develop system for maintenance and repair of the facilities
Long-term goals:
Provide grass fields for the students. Create an on-site gymnasium for both K-6 and 7-12 sites
Recommendations:
Develop a Facilities committee. This committee will address maintenance, repairs, and expansion issues under the direction of the Superintendent.
Strategic Goal #5 – Faculty & Staff Development
Short-term goals:
Develop strong relationships with local college teacher programs. Continue to nurture the supportive relationship between the Administration and the staff.
Intermediate goal: M
entoring/coaching for newly hired teachers
Long-term goal:
Endowment finance faculty/staff development
Recommendations:
Institute on-site, biannual, faculty development training and annual, staff training. Invite faculty to apply for additional off-site training opportunities through applying for Faculty Development Grant funds.
Example 2 – Strategic Plan Implementation
Small produce company had just completed a week long off-site retreat with executive team to update their strategic plan I was asked to help them determine what problems they might have in implementing their plan Used the affinity process and identified 14 problem areas (sub-categories) Used a matrix to determine the top-two problems that could prevent them from implementing their SP
Example 2 – Strategic Plan Implementation Affinity Results
Ranked Item #1 – Language barrier between workers and management (would inhibit the ability of management and workers to communicate, work on problem solving teams, etc.) Ranked Item #2 – Lack of mathematical skills of workforce (inhibit use of SPC and other tools for process improvement) Executive team agreed the results were valid and confirmed what many had suspected all along.
Example 2 – Strategic Plan Implementation Action Plans
Language barrier – Immediately started Berlitz classes two mornings per week for management. Planned to offer English classes for operators. Math skills – Tested workers who believed they had good math skills. Promoted three to in-process-monitors in the quality department to develop them. Planned to hire a community college instructor to teach math to employees.
Example 3 – Trend Analysis for Strategic Planning in Higher Ed
Trend Analysis Top 20 Trends in Higher Education Cross Impact Matrix Driving Trends Resulting Trends Root Cause Trends
Cross Impact Matrix Development
Research produced trends common to higher education. Cross impact matrix would produce information that could be used by each institution depending on vision, mission, and institutional external and internal scan data.
Cross Impact Matrix of Trends
A cross impact matrix was constructed using the top twenty trends from six major areas. Some trends are positive and some trends are negative Each trend was paired with every other trend to assess whether or not that trend had positive or negative impact, as viewed by the participaing group. A 20x20 matrix was created.
Matrix Scoring
Scoring was based on the following (row trend impact on column trend): +2 +1 Major Positive impact Positive impact 0 Negligible impact -1 -2 Negative impact Major Negative impact
Matrix Summary
Row totals
and
column totals
were computed from the matrix and rankings determined. The interpretations are very helpful in assessing the impact of trends for SWOT analysis, needs analysis, and other aspects of strategic planning.
Top 20 Trends in Higher Education
Increasingly unprepared students
Increase adult learners / professional programs
Expanded learning environment / partnerships
Increase in computer technology
Increase distance learning
Increase demand for computer literacy
Outcomes assessment
Decreasing funding
Affirmative action
Increase competition from private sector
Top 20 Trends in Higher Education (cont’d)
Increase in immigration/demand
Increase of language diversity
Increase of ethnic diversity
Increasing demand for higher education
Increase in class disparity
Increasing demands on curriculum
Increasing criticism of tenure
Increase in attack on shared governance
Aging faculty/ increasing retirement age
Decrease in liberal studies
Row Totals – Trend drivers
Strong Positive -
Trend has a strong positive multiplying effect on other trends. Consideration should be given to proactive strategies and support
:
Outcomes Assessment (18)
Expanded Learning Environment / Partnerships (17)
Increased use of Distance Learning (8)
Row Totals – Trend drivers
Strong Negative: S
trong negative multiplying effect. Consider strategies to protect against or eliminate effects.
Decrease in funding (-23)
Increase in unprepared students (-20)
Increased immigration/demand (-13)
Increase in ethnic diversity (-12)
Aging faculty/Incr. retirement age (-10)
Summary of Trend Driver Analysis
Decreased funding and more students with special needs will tax higher education.
An aging faculty will continue to tie up funds that could be used for younger faculty.
Outcomes assessment will help streamline delivery of education, improve quality, and address the needs of a more diverse clientele.
Small gains will be made with strategic partners.
Row minus Column Totals – Root Cause Trends
A measure of the root cause or underlying effect of the trend. Be proactive in planning for negative trends.
Taking advantage of positive trends to the extent possible.
Root Cause Trends (Row – Column)
High Negative
Increasing immigration/demand (-13)
Increase in unprepared students (-11)
Increasing ethnic diversity (-10)
Aging Faculty/Increasing retirement age (-9)
Root Cause Trends (Row – Column)
High Positive
Outcomes assessment (15)
Increasing demand for computer literacy (14)
Expanded learning environment / partnerships (11)
Summary of Root Cause Analysis
Demographic trends will tax resources.
Major expense - high seniority faculty. Outcomes assessment - positive impact. Increasing computer literacy and expanding the learning environment will be favored strategies. Sizable gains would result from more prepared incoming students.
Overall Summary #1
Demographic changes and an aging faculty will have major impacts on the cost of higher education and tax resources — resources that could otherwise be spent on technology and improved curriculum to meet the needs increasing numbers of students, adult learners, and those seeking professional education.
New ways of efficiently and effectively dealing with unprepared and non-English proficient students must be devised.
Overall Summary #2
Consideration should be given to offering faculty golden-handshake packages and other incentives to retire.
Surprisingly, faculty related trends (other than aging) did not measure up in impact to the demographic trends. Not that faculty issues are not relevant, just not as significant in the total scheme.
Unfortunately , most trends are on the “negative” side of the slate. Higher education is in for a rough ride.
Overall Summary #3
Institutions that plan carefully for these trends may survive as the rest struggle to maintain some measure of quality. Opportunities will emerge for alternate providers who take advantage.
California Assessment
Community Colleges
- Having difficulty redefining their mission. Faculty are on record stating trends will not affect them.
CSU
– Some system-wide initiatives are addressing these trends with faculty participation
UC
- Growth plans insufficient to meet states demands for grad programs and research. (UC Merced - 2005). Budget low.
Privates -
Inroads in graduate degree programs.
Example 4 – Kaizen for Management – Marketing Campaign
We know what a Kaizen event is at the operational level. Is there something that can be used to develop a strategic action plan at the system level?
“Kaizen for Management” uses Deming and Juran concepts to produce a system level action plan in one or two days
Learned from consultant from the Professional Coaches and Mentors Association
Example is for a strategic problem
Kaizen for Management
For middle and executive level managers familiar with the day-to-day operations of the organization CEO not involved Focus is on identifying systems that are broken and coming up with an action plan Can be completed in two days
1. Gather people in one room
Example – Private school enrollment was not growing. Private school needed to increase enrollment to stay above breakeven and increase resources Economy was affecting recruitment Attrition was higher than historical rate Efforts in this are were not working Gathered all management personnel together plus a few stakeholders For industrial setting the CEO should be excluded
2. Brainstorm goals
Brainstorm goals of the process. Purpose is to get juices flowing and have something to compare to
3. Identify major tasks by function
Using chart pad, make a list of responsibilities by functional area. These are usually cross functional.
Management team identified the following functional areas: Advertising Marketing Publicity Recruiting Retention Advancement
4. Identify functional tasks and evaluate
Participants identified up to 22 tasks per functional group. Then evaluate each task using colored dots Green – task is important and working well Yellow – Task is important but not working well Red – Task is not working and/or not important
Advertising
Advertising appears to be one of the least effective functions
Marketing
Can clearly see how stakeholders view the success and importance of functions. Website and business relations are broken.
Publicity
Color and quantity of dots give some indication of the value and status of the function
Recruiting – Page 1
Lots of yellow dots indicate a broken system that needs fixing
Recruiting – Page 2
Lots of green dots indicate highly successful functions
Retention 1
Notice attitudinal item #8. Willingness for staff to improve is questioned.
Retention 2
Retention 3
Process identified a lot of weaknesses in the retention area
5. Use visual data to identify system-wide problem themes
Seven potential underlying system-wide problem themes were identified. Each participant was given 3 dots and asked to prioritize. The Top four were selected for action: 1. Communications with parents/community 2. Facilities 3. Marketing Strategy 4. Support Staff
6. Form Self Selected Teams to Develop Action Plans for Each System wide theme
Self-selected teams enthusiastically formed and presented action plans. One team started implementing their plan before reporting back.
Kaizan for Management Summary
Can be applied to the entire organization. Day 1 – Steps 1, 2, 3 & 4. Facilitator forms the system wide themes from the first day results Day 2 – Finalize and select themes for action items. Teams prepare action plans and present to CEO for final approval If approved, action plans can be implemented without a lot of consensus building
Example 5 - QFD – Stakeholder Review of Strategic Plan
QFD emphasizes stakeholder involvement in development of user requirements for product or service development Use stakeholders to help assess a strategic plan. Get stakeholder feedback on whether or not the strategic plan will provide the products and/or services they desire.
College of Engineering Strategic Plan
Six major areas. Several dozen objectives in each area 1. BS and MS degree programs that meet societal and workforce needs 2. Successful students 3. Outstanding faculty and staff dedicated to student success 4. State-of-the-art facilities 5. Sustainable financial resources 6. Strong ties with external constituencies and the community
Invited 20+ CEOs a retreat
CEOs were asked to help critique the strategic plan Green, Yellow, and Red dots were used on charts around the room Dot patterns were used to generate discussion
2. Successful Students – Graduate Programs
Strong bias among stakeholders against MS programs. Want to put resources toward our great BS programs. They consider other schools for MS programs.
2. Successful Students – Diversity
Strong aversion to using “programs” to teach diversity (too passive).
Participants felt very strongly they learned by working on engineering projects with diverse teams and my visiting, working, and living in other countries/cultures.
3. Faculty & Staff
Not as supportive of tenured faculty as expected. Strong support for use of lecturers who were professionals with current work experience.
4. State-of-the art Facilities
Probably the most surprising findings: Lack luster support of this goal Strong belief that you don’t need state-of-the-art for most teaching.
Emphasis should be on getting good faculty who will know what facilities are needed for the program.
Six Levels of Quality System Implementation (Hayes, ASTD Handbook)
1 No quality system 2 Realization of the need to change 3 4 In the process of developing a top down policy/ strategy Quality system in place to react to customer needs 5 6 Proactive quality system in place to prevent quality problems Fully integrated system
(c) 2008, Dr. Phillip R. Rosenkrantz
customer-focused quality
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Transactional vs. Transformational Leadership
1 2 None Realization Transactional Leadership productivity. Non-threatening.
(Frederick Taylor) – Hierarchical management with focus on individual performance, how work is done, and problem solving. Incremental improvements in work methods and 3 Strategy 4 5 Customer Proactive 6 Integrated
(c) 2008, Dr. Phillip R. Rosenkrantz
Transformational Leadership (Deming, Senge, and others)– Emphasis on empowerment and how people think about work. System thinking, team learning, and major culture change. Policy Deployment.
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Leadership Roadmap
1 None 2 Realization 3 Strategy 4 Customer 5 Proactive 6 Integrated
Realization Phase
targets.
–
Leadership transformation. Training on values, communications. Basic tools. “Low hanging fruit”. Build Trust. Shift emphasis away from
Transition Phase –
Strategic planning & systems thinking. Department level teams. Quality tools. Int/Ext customer focus.
Performance Phase
Redesign.
–
Alignment. Empowerment. Process improvement. High performance teams. Variation reduction tools.