THE SIX VALUES
OF A QUALITY CULTURE
John A. Woods
from The Quality Yearbook, 1998 Edition
Copyright © 1996 by John A. Woods. All rights reserved. For permission to reprint, contact CWL Publishing Enterprises.
This article starts with a basic premise: All businesses are systems. A business system takes inputs from various suppliers and transforms these into outputs that customers will value. When your business does this well, your customers will want your company's outputs enough to purchase them at a price high enough for you to be profitable.
As a system, a business has a lot of interacting parts that transform inputs into outputs. The way these parts interact makes up the system's transformation processes. These parts are interdependent and affect one another. Figure 1 illustrates W. Edwards Deming's view of how an organization operates as a system. The arrows are the processes; touch one and it will inevitably affect another, and so on, in a chain reaction throughout the system.
Here is a crucial point for managing well: Always think about the whole system and its processes. What you will be managing are processes, and if you are not aware of it, you're likely to compromise your performance. You will cause waste and rework. You might make your employees unhappy and undermine their motivation to work hard. You will compromise the quality of your products and services to customers.
The best management practices have been articulated by people like W. Edwards Deming, Joseph Juran, Jim Harrington, and many others whose ideas are usually grouped under the term Total Quality Management. However, we should appreciate that the practices they suggest are not really about Total Quality Management. What they are about is smart management. They are the practices to adopt if you want to manage intelligently. Let's take an example:
to View a Company as a System
There is much information available about the best ways to manage a system. But to put any of these practices into place successfully, you need a foundation, a stable base of values on which to build. In this article I will examine the six values I have identified as forming the foundation of a company's culture once managers understand the idea that a business is a system. Culture provides the context for more readily adopting the practices that Deming and others have taught.
MORE ON CULTURE
Consider this story from a book entitled Making Quality Work (George Labovitz, Yu Sang Chang, and Victor Rosansky, New York: HarperBusiness, 1993, pp. 1-2):
We can think of values as a mental toolkit we use to understand how to relate to various circumstances and decide what action to take. All of us behave in ways that are consistent with our values. For example, people may say they value fair play, and by knowing this, we can understand that they will not do anything to deceive us in our dealings with them. Someone else may value "winning at any cost." These people are likely to do anything to come out on top in a deal, even if it means taking advantage of the person they are dealing with. In a business, employees will behave in ways that are consistent with the core values of the culture. And as a leader of your business, you are the one who establishes those values.
THE SIX VALUES OF A QUALITY CULTURE
In developing this list, I have reviewed many writers' ideas on what characterizes a culture that supports quality management practices. I have tried to distill the ideas I have discovered into this list. Like many other concepts in TQM and the systems view, each of these is really a logical extension of the others. The most important point here is that these values are based on a realistic understanding of what businesses are. I can't emphasize the word realistic strongly enough. Personally and in business, I have sought those values that are consistent with a realistic assessment of how businesses can operate most successfully.
The six values I have identified are:
Does it have to be this way? The answer is no. The six values for a quality culture can help you avoid or turn this unhappy and all too common situation around. While all six values seem idealistic, they are exactly the kind of values on which the actions of the most admired and successful companies are based. Why? They are simply more consistent in taking advantage of what each person has to offer as a full human being, and in understanding the organization as a system.
Now let's look more closely at the six values for creating a quality culture.
VALUE 1: WE'RE ALL IN THIS TOGETHER: COMPANY,
For this to happen, a company must be a place where people feel they are part of something bigger than themselves. Then they must identify their personal success on the job with that something. This can result in people understanding that by working hard for the company, they look out for themselves at the same time.
Personal Identification With the Company
Teams and Teamwork
The use of teams and the development of teamwork skills naturally emerges from Value 1. It reminds us that work gets done by team members mutually supporting each other. It affirms the idea that everyone in the company is both a customer and a supplier to other employees. When problems arise, people in teams operate together to better understand the processes and figure out together how to solve the problems. Managers do not just react to problems. Instead, they proactively search for ways to improve all the time to reduce the possibility of problems occurring in the first place.
The commitment to promoting teamwork will naturally extend to suppliers and to customers. Value 1 helps a company acknowledge its dependence on its suppliers and the need to view them as partners. Teamwork allows suppliers to expend their energy on delivering high quality goods to you as their customer. That translates into quality for your customers. This cooperation becomes the smart, logical, and appropriate approach with Value 1. The illogical and inappropriate approach, conversely, is working with suppliers as if they were adversaries--still standard practice in many companies.
The same is true with customers. Value 1 reminds us that the company's welfare is directly tied to its customers' welfare. Treating them as team members means that making them successful becomes part of your success.
VALUE 2: NO SUBORDINATES OR SUPERIORS
Now reflect on the times when you have had a manager who tried to assert his or her authority over you. Maybe this was in enforcing seemingly mindless policies without much thought as to their value or purpose for getting things done. You no doubt felt frustrated and limited in your ability to contribute. This latter scenario is standard operating procedure in many companies.
In traditional hierarchical management, companies become places where people feel they cannot take full advantage of their abilities. But in today's competitive marketplace, this just does not make sense. It's counterproductive to bringing out the best in yourself and others. The existence of superiors in a company creates the need for subordinates. In the same way, people who think of themselves as colleagues create other colleagues.
That is the rationale behind Value 2. Of the six values for a quality culture, this one may seem the most controversial, counterintuitive, and subject to misunderstanding. Nevertheless, it is consistent with Value 1. And it helps activate a culture where people go out of their way to work together for everyone's benefit.
This does not mean that some people do not have more responsibility than others. Nor does it mean that some people are not assigned to oversee processes on which several people are working. But Value 2 has everything to do with attitude and approach to this kind of responsibility. It suggests to everyone that the work of all members of the company is important and adds value to the final outputs. It says we are going to focus on the purpose for which we are all here: To get better and better at creating that mutually beneficial relationship between us and our customers. As a manager, your job is to use your authority to support the mutual interests of your team openly and conscientiously.
When a company culture eliminates the mentality behind superior-subordinate relationships, people more freely express what's on their minds. Of course, as with Value 1, this can only happen when you and everyone really believe that cooperation is what's most important. When everyone feels like a colleague and not just a cog in a machine controlled by someone else, people will experience this sense of cooperation. It then becomes a conscious driving force of behavior.
VALUE 3: OPEN, HONEST COMMUNICATION IS VITAL
Let's look at a situation of empathy in customer relations, where it can positively affect communication. Let's say you run an auto body shop and a customer arrives with a banged in fender. This person does not want you just to fix it; he wants it exactly like it was before the accident. He wants you to repair it so that no one would ever know it had ever been in the body shop. Without empathy, without an appreciation of how much that person identifies with his car, you are going to have problems with this customer. You won't be open to listening and communicating with this person. If you downplay the accident, when it is a big deal to the customer, it is not reassuring to him. The better alternative is to understand this person's concern. By making it your goal to deliver a great repair job, you create a talking billboard for your company.
That is what empathy is about and how it affects communication. This kind of empathy does not happen without valuing honest and open communication, which fosters the ability to see the world from the others' view.
However, if you can suspend judgment and turn down the filter, you create a situation where others do the same, as they naturally imitate your behavior. This is an important way that you, as a manager, can encourage open and honest communication. Turn down the filter by putting yourself in the other person's place and appreciate that the only way to find out what's on the mind of a colleague or a customer is to listen to him or her. When you start from the perspective of Value 1, where you identify with each other and with the company, listening makes more sense.
Best-selling author Peter Senge writes in his book The Fifth Discipline how some people may use communication to manipulate others for their personal ends. He shows how this is often to the detriment of the entire company. He suggests a simple way to avoid this: Tell the truth. Senge recommends having a deep commitment to the truth. This means "a relentless willingness to root out the ways we limit or deceive ourselves from seeing what is, and to continually challenge our theories of why things are the way they are." An important way to encourage truth-telling is by creating a culture where people listen to one another. This is a culture where open, honest communication is understood as necessary for people to function best.
VALUE 4: EVERYONE HAS ACCESS TO ALL THE
INFORMATION ON ALL OPERATIONS
Still we find companies retaining their hierarchies and chains of command. This happens despite the fact that it takes more energy to keep information flowing via these chains than the effort may be worth. Who needs a middle manager to dispense information when employees can punch a few buttons and find out what they need to know, whether from on-line files or directly from the person who has the information? Value 4 is an affirmation of this trend and is closely related to Value 3. Open communication and access to information about the company's sales, customer needs, orders, finances, delivery of parts, the activities of different people and teams, how the progress of your team is affecting other teams, and vice versa have become vital and are a source of potential competitive advantage.
Members of a company decide what to do based on information and what that information implies about the situations in which they find themselves. Limited information means that decisions will be more speculative and thus more likely to introduce additional uncertainty into the company and its processes. Just think about when you or one of your employees made a poor decision. It probably happened because you did not have enough information. It's also likely that the information you needed was available but maybe you did not have access to it. If you want to reduce the likelihood of this happening, increase access to information for everyone.
Think about this: How can I (or anyone) identify with my fellow employees and best cooperate with them if I don't have access to the same information they have, or they don't have access to what I know? In other words, better cooperation results from implementing Value 4 in your company.
Today, more than ever, information and what people make of it--knowledge--are at the heart of the work we do. Each of us uses information to help us understand the current state of affairs in our companies. This information provides direction for what we will do next and, more importantly, direction for how to improve. The systems view reminds us of the interdependencies in a company. Since we are all members of the system, we all need information.
This not only includes information about processes and events that affect us directly but also those that affect us indirectly. Sales needs to know the current inventory of spare parts, and the warehouse needs to know about future orders. There is a dance going on among all the people, machines, customers, and suppliers that make up any company. This does not mean that all employees receive reports every week or month on all kinds of information they may or may not need. It does mean they have access to all information as they need it, and they are aware of what's available and are responsible for taking advantage of this information.
When there are no secrets, people don't have to wonder about things; they can go about doing their jobs in the most informed fashion possible. Isn't that what you would like to see happen in your company?
Of course the purpose for making this a cultural value is to encourage decisions based on sound and complete information. And as a cultural value, everyone understands that full access to information is just the way things are at your company. This reinforces and is part of all the other values we have covered so far.
Remember: You can never eliminate uncertainty in your business. However, you don't have to foster it by limiting access to information.
VALUE 5: FOCUS ON PROCESSES
At John Deere's Moline (Illinois) Harvester plant, the implementation of what was called Vision XXI helped the company make deep cultural changes and performance improvements in a division that was performing poorly. Before Vision XXI, if you asked an employee what he did he'd say "I run a drill," or "I run a punch press." In other words he would talk about work in terms of a generic skill and not the purpose to which that skill was put. After Vision XXI, an employee would say, "I build markers," "I build frames." What these statements mean is that the employee contributes to the processes by which markers or frames get built.
If you take a step back, you can see that employees' jobs wre the same before and after Vision XXI. However, before Vision XXI they somehow felt divorced from the processes they contributed to. Because of this, the processes were not working well. Now, with Vision XXI, everything is centered on processes. A supervisor is a "process leader," and employees are now "process team members." Those titles are not window dressing, they define a new understanding and approach to their tasks.
Just as importantly, Value 4 moves everyone away from a "blame the person" mentality to a "blame the process and let's fix it" approach to problems and improvement. Industrial culture is heavily oriented toward recognizing individual achievement and individual mistakes. However, the process orientation reminds us of the fallacy of that approach. Since 80 to 95 percent of all problems--the rate varies, depending on whether you believe Juran or Deming--are due to variation in processes, it does not make a lot of sense to blame individuals for problems.
Indeed, there is a double irony to blaming individuals. First, it is clearly incorrect. Blaming single employees for problems and replacing one person with another simply introduces another source of unpredictability and variation into a process and does nothing to reduce system-related sources of that variation. Putting another person in that position does nothing to help everyone understand and improve how the entire process operates. Yet in most companies this replace-the-person approach is what happens. Should we be surprised, therefore, when problems continue? The second irony is that blaming individuals for problems undermines the other values of a quality culture we have been discussing. How can you genuinely develop a "we're all in this together" set of values and behaviors when individuals are worried about their jobs? When you focus on individuals rather than processes, you create an environment where people look for scapegoats and hope they don't become one.
Let's look at the best reason for fostering a heavy process orientation: It is the most realistic position you can take. It affirms that improvement happens when people understand, measure, and reduce variation or reengineer those processes to be more efficient and effective at delivering value for customers.
It seems appropriate that we should focus on processes. They are how work gets done. Make focus on process one of the fundamental assumptions and values of your company's culture and operations and support it by setting up teams and providing the training and tools needed to continuously improve these processes to everyone's benefit.
VALUE 6: THERE ARE NO SUCCESSES OR FAILURES,
JUST LEARNING EXPERIENCES
We might like what happens; we might be disappointed. But in either case, it's a temporary situation, another experience in our lives that we can take note of and learn from. Success and failure are stops along the road for any business.
Let's look in greater detail at the ideas of success and failure to better understand Value 6. First, it's important to appreciate that success has to do with creating mutually profitable relationships between the company and its customers. Failure, conversely, has to do with unprofitable relationships between the company and its customers. In both cases, these experiences can help us learn something about that relationship, where it now stands, and how we can make it thrive. As employees or managers of a company, our successes and our failures show us how well we are using our current capabilities to serve some group of customers and other stakeholders. They are short-term situations that we can learn from.
Now, what about doing away with the labels "success" and "failure" and focus instead on the learning going on? Why is this the best approach? Because it puts our experience in the most realistic light. For example, companies that have a success in the marketplace may become seduced into believing they can do no wrong. They become complacent. They might think they can put their businesses, at least temporarily, on cruise control. However, the seeds of failure are planted in our successes.
Anytime you have a successful product or service, your customers always learn at least two things about it: how well it works and how well it does not work. You raise their expectations, and you teach your competitors something about the market you share with them. If you do not continue to make improvements that customers value, and even to find replacements for what you offer, you open the door to other companies taking your customers away from you. Therefore, look on your successes (and mistakes) as temporary. Look on them for what they are: valuable experiments that helped you learn something about your customers and what they consider of value. You've gained information that can help you continue to succeed, and you've gained more of the financial resources you need to continue in business.
Successes are especially valuable in helping you learn what your strengths are. You can leverage off these strengths to continue to succeed. But you need to pay careful attention to what you learn. I have seen company managers who take a few successes as a sign that they are invulnerable. Then they introduce all kinds of new products, some of which may appeal to the market, and some of which will not. Some companies that seem to be making lots of money may relax and become inefficient, making them vulnerable to other companies with leaner operations. Clearly these managers did not learn the right lessons from their experience. They did not appreciate that success is always short-term. You have to pay close attention to the lessons from that experience and what they tell you about what customers value.
Companies can also learn when their offerings fail to attract customers. Like the lessons learned from success, those learned from failure are useful as well. If your company has had marketplace failures, or at least disappointments, you need to look at them carefully. They can help you figure out where you have fallen down in delivering outputs that customers will want. It may not be the physical product itself, but your price. If you have to charge a high price to cover costs, you may find that customers will not value your product or service enough to pay that price. If that is the case, you must make changes that will bring your prices down to a level that customers are willing to pay. Or you must get out of that business.
The important point here has to do with instilling the value that everything that happens is a chance to learn. Learn what? You can learn how to use the resources you manage to the benefit of customer and company. If you don't do this, you leave yourself at the mercy of others who will.
This does not mean you don't celebrate your successes, nor does it mean that you don't feel disappointment when things don't work out as well as you hoped. What it does mean is that after your celebration or your disappointment, you look at the experience for what it is--an insight into your relationship with your customers. This insight can help you figure out how to add more value to what you sell to customers and to improve the processes you employ to deliver that value.
There is no particular point on the business journey when you can say you are a success. The demise of many one-time "successful" companies attests to this, but Value 6 makes clear that learning from your experiences is its own success. Further, that success incorporates improving your ability to serve customers.
Here's one other thing about this value: It keeps company employees and managers from taking themselves too seriously. It reminds people not to think of themselves as omnipotent. In other words, it keeps people open, humble, and focused on what they should care about--figuring out how to do better and better by their customers. Further, it emphasizes a fundamental reality of our lives: we are always learning something. So it might as well as be something that is for the mutual good of ourselves and our customers.
LEADING THE CHANGE TO A QUALITY CULTURE
If you have a cynical or close-minded attitude, your employees will come to believe that such an attitude is appropriate when they are on the job. This does not mean that your attitude is the best way to get things done and please customers. It just means that most employees will adopt it because they will believe that because it is the boss's attitude, it's what he or she expects.
Whether you like it or not, you have a major part in shaping a culture that's best for your company, your employees, and your customers. You have to be aware of your influence and consciously use it to instill values that result in efficiently and effectively delivering quality outputs to customers. The six values for a quality culture reviewed in this article will do this for you. I have put my own interpretation on them based on my understanding, experience, and reading. You should do the same. When you read about the best companies, you will see these values, in one form or another, at their base. Why? Because they work.
Making Your Culture Special
The plan that will work for you is yours, not mine or anyone else's. However, you also need to appreciate that values like those covered here are at the heart of companies that are great places to work and companies that keep getting better at serving customers. If I have succeeded in convincing you of this, then take ownership of these ideas and make them your own. Work with others in your company to express them in ways that are consistent with your personality and the needs of your company. Following are some suggestions for doing this.
Steps for Cultural Change
To get started, you may want to make some dramatic gestures. One such action is to eliminate most rules concerning time clocks. When people recognize that others depend on them, they will be there. Another is to eliminate assigned parking places or have everyone, from top to bottom, eat together in the company cafeteria. Remember, what you are looking for from people is not compliance with some imposed programs but commitment to the company, which comes with the trust shown when you minimize rules.
You know better than I what kinds of rules and policies get in the way of people's performance in your company. Use a team to study them and figure out what behaviors and actions will be most consistent with the cultural values you develop. These values will naturally suggest appropriate programs and policies to establish or eliminate.
Training in communication, teamwork, the tools of TQM, and ongoing skill development are all vital in this transformation process. You need to be an enthusiastic member of the class, as well as a formal and informal teacher.
Set up recognition programs for people and teams. Most such recognition should be more symbolic than material. It should reward behaviors and actions that support the cultural values of "we're all in this together" or open communication or process improvement and so on.
Other ways to introduce and reinforce culture include legends and symbols. Legends are stories that capture the culture in the acts of certain people that demonstrate a commitment to the company's cultural values. These may be formal or informal stories passed around the company. Whichever they are, they help people understand what the company is about and what they are supposed to do. Symbols are like a brand name. In one way or another they say what the company is all about.
Legends are found in every company. However, it is important to appreciate that legends illustrate the values of a traditional command and control company as much as they do the kinds of values covered in this article. For example, there might be a story of how the boss got mad one day and fired Harry for coming in ten minutes late without a good excuse. You can be sure that such a story captures the essence of that culture as much as the one I am about to relate.
When Stanley Gault, longtime head of Rubbermaid, took on the chairmanship of Goodyear, he instituted the title of "associate" for all employees. At one company function, a longtime factory worker approached Gault with apprehension, asking if he, too, was an "associate." Gault assured him that he was one. A few weeks later Gault made a special point of visiting his associate on the factory floor. As Gault relates it, this is the kind of story that would be on the Goodyear grapevine within a few days. It becomes a kind of legend that reinforces the cultural values that Gault is working with others to instill as Goodyear turns itself around.
Be aware of special efforts that people take to make your values real, and share those stories with others. They have the potential to become a legend. Take note of special acts of various employees that you might recognize to reinforce cultural values. This is how legends start.
Symbols for a culture can be an animal, a phrase, anything that people can use to represent the culture. One travel agency has adopted the salmon as their corporate symbol, because of its can-do behavior, famous for swimming upstream. They have salmon awards and use this symbol in many different contexts to reinforce their values. You can work with others in your company to come up with one that exemplifies what makes your culture special.
The Commitment of Top Management
Managers are the role model, and when they (and you) walk the talk long enough, pretty soon these values, these ways of operating and viewing the world become standard procedure, no longer dependent on any single
person for their vitality. Top management must make that its objective. When it does, managers, as well as their employees and customers, won't regret it.
Peter M. Senge, The Fifth Discipline: The Art & Practice of the Learning Organization (New York: Doubleday Currency Books, 1990).
Brian L. Joiner, Fourth Generation Management: The New Business Consciousness (New York: McGraw-Hill, 1994).
Hal F. Rosenbluth and Diane McFerrin Peters, The Customer Comes Second (New York: William Morrow, 1992).
James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies (New York: HarperCollins, 1994).
Charles C. Manz and Henry P. Sims, Jr., Business Without Bosses (New York: John Wiley & Sons, 1993).
William Lareau, American Samurai (New York: Warner Books, 1991).
John A. Woods and James W. Cortada, QualiTrends: 7 Quality Secrets that Will Change Your Life (New York: McGraw-Hill, 1996)
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