The MN State Quality Program - Performance Excellence

In his April blog post ASQ CEO Paul Borawski asks for examples of national quality programs, and whether the program is growing in visibility and perceived value and creating capacity for organizational excellence.

The United States has the Malcolm Baldrige National Quality Program. I first became familiar with the Baldrige Criteria while an internal evaluator back in the late 1990's when 3M's Dental Products Division won the national quality award in 1997. The Baldrige Program is the USA's public-private partnership dedicated to performance excellence, administered by NIST and ASQ. Rather than focus on the national program, I wish to introduce my readers to the Minnesota state quality program. The Minnesota Council for Quality and Productivity was formed in 1987 as a part of the Department of Trade and Economic Development. The word “productivity” was later dropped from the name, and the organization was eventually spun off into an independent, private non-profit. The Council was one of the first state quality award programs modeled after the Malcolm Baldrige National Quality Award. In 2012 the MN Council for Quality was renamed to the Performance Excellence Network, or PEN for short. The primary goal of PEN organizational assessments is learning and improvement, but it also recognizes levels of performance excellence to eligible organizations through the Performance Excellence Award (formerly the Minnesota Quality Award). Per the PEN website, the Award Cycle - with its multiple levels of recognition - remains an important part of PEN’s offering. Since 1991 there have been nearly 100 MN State Award recipients, representing various industries, sizes, and communities throughout the region.

I have been a trained State Evaluator for four years and have participated in several assessments and site visits. The great thing about the MN State Award process is that, unlike the national program, EVERY applicant gets a site visit!  Brian Lassiter, President, and the PEN judges and evaluators have done a masterful job of building a program focused on learning and best practices sharing. My participation with PEN has also benefited from the knowledge and experiences shared by Mark Blazey, author of Insights to Performance Excellence, whom has been invited to teach every year of my PEN evaluator refresher training. Serving as a MN state evaluator has significantly strengthened my understanding of overall organizational performance excellence beyond traditional quality tools, methods, processes and systems, which has also benefited my employer and all with whom I correspond.

Quality in Local Government

Paul Borawski, in his latest ASQ blog, talks about quality improvement efforts in various city governments including Milwaukee, WI, Coral Springs, FL, and Irving, TX.

I have similar experience with the City of Hutchinson - a small town in central Minnesota - where the mayor and city council wanted to establish a "One Stop Shop" for licensing and permitting in the building/planning/zoning departments. A cross-functional team was assembled from across three different government entities: the State of MN, McLeod County, and City of Hutchinson. A problem statement was developed focusing on delivering constituent experience and satisfaction. The 'DMAIC' problem solving methodology was employed to define a new operating system. Quality tools used include surveys, fishbone diagrams, FMEAs, C&E, brainstorming, affinity diagrams, inter-relationship diagrams, experimentation, SPC and control plans.

A more detailed explanation of this example and other personal success stories using statistical thinking are available in the book, "Improving Performance Through Statistical Thinking" by Britz, et al (ASQ Quality Press, Item H0160).

Quality Tools in Forensics

In his March blog, ASQ CEO Paul Borawski asks if anyone had spotted a place where a quality tool would really come in handy. I am happy to announce that I am in the midst of a planned weight loss program. I lost 52 lbs during July-November to achieve my target weight, and have been in transition mode back to "normal" foods since December while maintaining my new weight.

During my weekly consulting sessions the weight loss coach would take my blood pressure, measure my weight and every few weeks conduct an "in-body" scan of muscle vs body fat. I continue to be amazed by the large variation between blood pressure monitors and the apparent lack of standardization between the different scales. Fortunately, these devices are not life critical in a weight loss program, but how often do you question whether the lab equipment at your clinic, in the dentist's office, or in the hospital are calibrated, or whether the test methods are validated and in a state of statistical control?

In a story making local and state headlines, the St Paul Police Crime Lab suspended its drug testing in July 2012 after public defenders challenged the reliability of the lab's work in court. The lab provides drug testing for Dakota, Ramsey and Washington counties. The problems at the crime lab have thrown thousands of past and pending cases into question. In a report from MPR News, "A senior lab employee also testified that the lab lacks written procedures for testing evidence for drugs and provides only informal training to new employees. The lab, which processes up to 50 cases per day, does not regularly review its work to check for errors, the employees said, and, like many other smaller crime labs in Minnesota, is not accredited by the American Society of Crime Laboratory Directors."

Minnesota law does not require accreditation for crime labs, although evidence from these labs play an increasingly larger role in convicting people of drug possession, murder, and other crimes. Perhaps this case will cause the state government to reconsider the value of quality audits, equipment calibration, standard procedures, measurement quality assurance and operator training and certification.

Celebrate Failure As Learning, Leading to Growth

According to an ASQ survey conducted by Kelton Global, while 95 percent of teens agree that risk-taking is required for innovation in science, technology, engineering and mathematics - or STEM - careers, 46 percent say they are afraid to fail or uncomfortable taking risks to solve problems. Failing and trying again is key to problem-solving in STEM careers, including the field of quality. Fewer teens are pursuing STEM fields today because of the fear of bad grades. ASQ CEO, Paul Borawski, suggests that "We need to teach today’s students how to take risks and fail so they feel comfortable when faced with challenging work."

Changing this fear of failure - and the impact of bad grades - requires a culture change where failure is recognized and celebrated as learning; where taking a chance by enrolling in a difficult course that stretches one's ability and receiving a lower passing grade - is rewarded with some kind of bonus points. Not all risks are equal; not all "A's" or "D's" are the same. Formal learning and grading systems should consider the degree of difficulty when calculating the student's grade. Failure in the business world is ultimately evaluated from the perspective of dollars and sense. It has been my experience in business that "bad" financial results are much more palatable when the quality of the decison-making process was first-rate. Project Management Institute (PMI) tells us that minimizing the negative impact of risk can be accomplished by maximizing the expected monetary value of a decision. Expected Monetary Value (EMV) allows you to quantitatively prioritize risk: prioritize the risks with the highest probability of occurrence versus the risks with the greatest monetary impact. EMV Decision Trees help identify the set of options available to minimize risk and maximize opportunity. For example, a "make or buy" decision can be evaluated with knowledge of the probability of each risk along with the monetary value of each risk.

I have used EMV on occasion in my career when considering the cost vs benefit of alternatives impacting quality and reliability. An interesting exercise for the potential STEM student and mentor might be to construct an EMV decision tree to evaluate curriculum options (effort vs. expected grade) using the anticipated earnings of a STEM versus non-STEM career.

In today's fast changing world we must all become comfortable with the uncomfortable. However, that does not mean we should haphazardly make important decisions in the name of speed. According to a study reported in HBR, "...operational speed is quite different from strategic speed. Firms that 'slowed down to speed up' improved their top and bottom lines, averaging 40% higher sales and 52% higher operating profits over a three-year period... higher-performing companies with strategic speed made alignment a priority. They became more open to ideas and discussion. They encouraged innovative thinking. And they allowed time to reflect and learn."

Allowing mistakes and accepting failure as learning helps to encourage experimentation, potentially leading to breakthrough or even disruptive innovation resulting in personal growth and organizational success.

21st Century Quality

13 years into what Dr. Juran said would be the "Century of Quality", ASQ CEO Paul Borawski asks in his January 2013 blog post, "What do you use as the best, most inclusive, and illuminating definition of quality?" The 2011 Future of Quality Study defines Quality as a force of change, and introduces the concept of "21st Century Quality" - Quality is ultimately what the customer says it is, and what the customer is willing to pay for. Quality today is more than product quality. Perfect product is a given. Exceptional service and transactional quality are often powerful differentiators.

• Quality improvement is the process of managing variation around customers’ expectations.
• Quality processes deliver brand promise, protect the enterprise, improve operational excellence, enable customer-perceived value, increase customer satisfaction.
• Quality, then, in its simplest definition is "Total Customer Experience."

Total Customer Experience is the sum of all experiences a customer has with a supplier over the duration of their relationship with that supplier, from awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy. Superior Total Customer Experience delivers memorable, satisfying experiences in every transaction every time. Peter Drucker, a renowned Quality Management expert reminds us, “Quality in a service or product is not what you put into it. It is what the customer gets out of it.”

People often ask, “How is Quality different than Lean Six Sigma?” It is my opinion that while Lean, Six Sigma, PDCA, etc. are all important problem solving and continuous methods in the Quality practitioner toolkit, Quality is much more than continuous improvement. A key role of the Quality function is to manage the organizational white spaces that exist between departments in cross-functional work systems and processes. Quality recognizes the importance of effective hand-offs between internal supplier and customers to meet and exceed end user requirements. The Baldrige Criteria offers an excellent framework that describes this holistic definition of Quality. I want you to visualize the hamburger. The bottom bun represents the organization's values and principles. The top bun symbolizes its mission, vision, strategies and plans. Lean, Six Sigma, CAPA, PDCA, PPU are the condiments. The meat, cheese and vegetables are the key business processes of leadership, strategic planning, customer focus, human capital, process management, and business results. Quality assures the alignment of these systems and processes to deliver a satisfying burger experience.

Winning in today’s highly competitive, global market requires flawless execution at the speed of the customer. Delivering Total Customer Experience requires stable and capable processes, with consistent flow, and an engaged, motivated and empowered workforce. To quote Ernst & Young, "There is little chance that your customers will be excited about your products or services unless your workers are."

Stating Your Case for a Raise

ASQ Quality Progress recently published its annual salary survey, which again confirms the value of professional certification. As we close out another year many U.S. companies are conducting annual workforce performance reviews attempting to quantify the relative value and merits of employee contributions. Given today's challenging economic environment confronting every employer what is your case for requesting a raise? Regardless whether you are an individual contributor or a supervisor/manager, how have you helped "move the needle" in terms of delivering organizational results?

ASQ CEO Paul Borawski summarizes that the Quality practitioner's primary impact to business results are typically achieved in the areas of "... Customers more satisfied, revenue enhanced, money saved, waste reduced, lives saved, or risks managed".  Personally speaking, quantifying my impact to business results is made more difficult because as the leader of a corporate staff function I do not have line operation responsibility. Any impact I have to drive business results is the measure of my ability to motivate, educate, engage and influence others. Indeed my role is primarily that of change agent, teacher/coach/consultant, project leader, mentor, cheerleader, customer advocate, and champion for performance excellence. "3M Quality" is a recognized value differentiator delivering customer-perceived best in class performance. Every 3M employee at every level of the organization is responsible for assuring Total Customer Experience.

I approach my role as a servant leader focused on helping my direct reports and business clients to succeed. The case for a raise in 2013 will be made by my clients. Here we use an appraisal process incorporating 360 degree feedback; I am perfectly comfortable letting my employees and clients judge whether I am adding business value while promoting 3M values:

• Act with uncompromising honesty and integrity in everything we do. 
• Satisfy our customers with innovative technology and superior quality, value and service.
• Provide our investors an attractive return through sustainable, global growth.
• Respect our social and physical environment around the world. 
• Earn the admiration of all those associated with 3M worldwide.

3M employees all across the globe are strengthening their operational excellence and continuous improvement skills and competencies through internal training offered by my group, supplemented with ASQ content thanks to 3M's enterprise membership. Many are pursuing ASQ professional certification for personal growth to the benefit of 3M and its customers.

Accelerating the Adoption of Quality

As we celebrate World Quality Month this November, ASQ CEO Paul Borawski asks the Quality community what can we do to accelerate the rate of adoption of quality? A big part of the solution, I believe, is to promote the broader role of "quality" in everyday life. This month the leaders of the MN Section of ASQ organized several community service projects partnering with the Twin Cities Habitat for Humanity to "build a House of Quality". We strategically chose two Saturdays in November with Habitat for Humanity to both recognize World Quality Month and to demonstrate the role of quality in design (e.g. environmentally friendly homes) while building stronger social communities. I am extremely proud of our MNASQ members who quickly filled both November dates to participate on indoor and outdoor new home construction projects. We also had a few members who could not physically participate, and chose instead to contribute via charitable donation towards community playground equipment. Habitat for Humanity was so pleased by the quality of our work and contributions that they asked us to sponsor a Saturday in December. Our members have asked the Section leaders to also consider sponsoring a community service project this spring.

Sponsoring community service projects is just one tactic the MNASQ section is using to define and promote quality as "Total Customer Experience" (TCE).  Total Customer Experience is defined as the overall customer impression based on perceptions and experiences of a company's products, services, people, partners and solutions at every touchpoint. Regardless of whether one subscribes to the notion that the U.S. is shifting from a manufacturing economy to a service economy, fewer people involved in continuous improvement today align themselves with traditional 'Quality'. Hence, one explanation of the decline in ASQ membership since its peak in the late 1980's (Total Quality movement). Today's continuous improvement practitioners are organized around such labels and efforts as process improvement, operational excellence, customer satisfaction, patient safety, etc. Early adoption of quality principles in manufacturing made intuitive sense -  it is much easier to view work as a process in the manufacturing environment where supplier-customer interactions are obvious, requirements are generally known, defects are understood, and data are frequent and numerous. Contrast the manufacturing environment to the transactional world where process thinking is not intuitive, the customer is not always identified, the "product" may not be well understood, defects may not be defined, and data are not systematically collected.

Following the "Diffusion of Innovation" model, (Everett Rogers, 1962), service and transactional quality may be regarded as laggards in the quality improvement journey yet hold great potential to delivering significant gains in performance excellence and business success.

In today's difficult economy with increasingly global competition and sophisticated customers, excellent product quality is a given. Dr. Joseph Juran defined quality along three key attributes: free from defects, features, and reliability.  Following that definition, competitive advantage today is achieved through superior, consistent, reliable product and service performance that delivers unmatched Total Customer Experience... every transaction, every touchpoint, every time.

To help activate the adoption of quality in transactional processes it helps to visualize the cross-functional nature of most business processes. Whereas most functions are defined as silos, most processes are cross-functional. Keys to transactional process improvement are recognize where the  internal supplier-customer hand-offs occur and fully understand the internal customer requirements. A critical role of Quality in transactional processes is to manage the organizational white spaces within each cross-functional process.  Many organizations today are applying lean tools and concepts to help them drive speed and improve efficiency through the elimination of waste and non value-added activity.

Dr. Deming is quoted to having said, "Change is not necessary. Survival is optional". Lean, Six Sigma, PDCA, CAPA, etc. are all valuable methods of problem solving and continuous improvement to help assure competitiveness of the enterprise. But I define Quality much broader than continuous improvement alone.
Quality is the intentional alignment of mission, vision, values, leadership, planning, customer focus, work systems, workforce and continual improvement for organizational success. I prescribe to the "hamburger" model of the Baldrige Criteria where continuous improvement is just one crucial ingredient to performance excellence of the organization.



Quality is achieved by flawless execution at the speed of the customer. So how do we measure flawless execution? The Cost of Poor Quality (COPQ) metric and a measure of customer satisfaction (or even better - customer loyalty) are two key indicators.

COPQ Iceberg illustration from Free-Six-Sigma.com

Traditional measures of COPQ track the measures that are relatively easy to observe, such as waste, scrap, rework, inspection costs, disposal costs, warranty and complaints costs, etc. Though these measures are relatively easy to obtain (i.e. "Visible" costs), more often the greater opportunity for operational excellence and customer experience is in the "hidden costs" of excess inventory, numerous engineering change orders, lost sales, costs to expedite shipments, limited product availability caused by the lack of speed, flow and synchronization of one's key value streams, etc.

Illustration from SixSigmaTraining.org

As quality costs are reduced, profits are increased.  As value streams are optimized to increase velocity and flow, customer satisfaction is increased due to improved "product" quality and availability.

So, back to Paul Borawski's question of how can the quality professional accelerate the adoption of quality... Quality must be defined much more broadly than product or service quality. Competitive advantage today is achieved by a relentless focus on delivering Total Customer Experience including exceptional product/service/transactional quality, consistently good customer service, a warm, inviting customer experience, a commitment to environmental stewardship and social responsibility. Politics aside, I like Chick-fil-A and Caribou Coffee as two role model organizations in this regard.