Three Recent Developments
in Quality Management
• ISO 9000 (-2000)
• EFQM Model
• Quality Improvement and
Six Sigma Programs
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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ISO 9000
• Proponents claim that ISO 9000 is a
general system for Quality Management
• The de facto applications seem to be
– an excessive emphasis on Quality Assurance,
and
– standardization of already existing systems
with little attention to Quality Improvement
• It would have been better if improvement
efforts had preceded standardization
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Critique of ISO 9000
• Bureaucratic, large scale
• Focus on satisfying auditors, not customers
• Certification is the goal; the job is done when
certified
• Little emphasis on improvement
• The return on investment is not transparent
• Main driver is:
– We need ISO 9000 to become a certified supplier,
– Not “we need to be the best and most cost effective
supplier to win our customer’s business”
• Corrupting influence on the quality profession
Copyright © 2000 by Søren Bisgaard. All rights reserved.
3
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EFQM Model
• A tool for assessment: Can measure where we
are and how well we are doing
• Assessment is a small piece of the bigger
scheme of Quality Management:
– Planning
– Control
– Improvement
• EFQM provides a tool for assessment, but no
tools, training, concepts and managerial
approaches for improvement and planning
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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The EFQM Excellence
Model*
Results
Enablers
Leadership
People
People
Results
Policy &
Strategy
Customer
Results
Processes
Partnerships
& Resources
Key
Performance
Results
Society
Results
Innovation and Learning
*) adapted from official EFQM publications
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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The “Success” of Change
Programs?
“Performance improvement efforts …
have as much impact on
operational and financial results as a
ceremonial rain dance has on the weather”
Schaffer and Thomson,
Harvard Business Review (1992)
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Change Management:
Two Alternative Approaches
Activity Based
Programs
Change
Management
Result Oriented
Programs
Reference: Schaffer and Thomson, HBR, Jan-Feb. 1992
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Activity Centered Programs
• Activity Centered Programs: The pursuit
of activities that sound good, but contribute
little to the bottom line
• Assumption: If we carry out enough of the
“right” activities, performance
improvements will follow
– This many people have been trained
– This many companies have been certified
• Bias Towards Orthodoxy: Weak or no
empirical evidence to assess the
relationship between efforts and results
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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An Alternative: Result-Driven
Improvement Programs
• Result-Driven Programs: Focus on
achieving specific, measurable, operational
improvements within a few months
• Examples of specific measurable goals:
–
–
–
–
–
Increase yield
Reduce delivery time
Increase inventory turns
Improved customer satisfaction
Reduce product development time
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Result Oriented Programs:
•
•
•
•
•
•
Project based
Experimental
Guided by empirical evidence
Measurable results
Easier to assess cause and effect
Cascading strategy
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Why Transformation
Efforts Fail!
•
John Kotter, Professor, Harvard Business
School
• Leading scholar on Change Management
• Lists 8 common errors in managing
change, two of which are:
1. Not establishing a sense of urgency
2. Not systematically planning for and
creating short term wins
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Six Sigma: What is it?
• A successful program spearheaded by
companies such as General Electric and
Allied Signal (Honeywell) in the US
• Originated at Motorola as their quality
improvement program
• Different from traditional TQM, ISO
9000, and EFQM
• Statistical, data oriented and result driven
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Six Sigma Demystified*
Six Sigma is TQM in disguise, but this
time the focus is:
– Alignment of customers, strategy, process
and people
– Significant measurable business results
– Large scale deployment of advanced
quality and statistical tools
– Data based, quantitative
*Adapted from Zinkgraf (1999), Sigma Breakthrough
Technologies Inc., Austin, TX.
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Keys to Success*
• Set clear expectations for
results
• Measure the progress (metrics)
• Manage for results
*Adapted from Zinkgraf (1999), Sigma Breakthrough
Technologies Inc., Austin, TX.
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Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Six Sigma
• The precise definition of Six Sigma is
not important; the content of the
program is
• A disciplined quantitative approach
for improvement of defined metrics
• Can be applied to all business
processes, manufacturing, finance and
services
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Focus of Six Sigma*
• Accelerating fast breakthrough
performance
• Significant financial results in 4-8
months
• Ensuring Six Sigma is an extension of
the Corporate culture, not the program
of the month
• Results first, then culture change!
*Adapted from Zinkgraf (1999), Sigma Breakthrough
Technologies Inc., Austin, TX.
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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GE Examples
•
•
•
•
•
•
•
•
Approving a credit card application
Installing a turbine
Lending money
Servicing an aircraft engine
Answering a service call for an appliance
Underwriting an insurance policy
Developing software for a new CAT product
Overhauling a locomotive
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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Six Sigma: Reasons for Success
• The Success at Motorola, GE and
AlliedSignal has been attributed to:
– Strong leadership (Jack Welch, Larry
Bossidy and Bob Galvin personally
involved)
– Initial focus on operations
– Aggressive project selection (potential
savings in cost of poor quality >
$50,000/year)
– Training the right people
Copyright © 2000 by Søren Bisgaard. All rights reserved.
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