Linking Strategy with Quality
By David Ramey, President
T H E
LEADING EDGE
A NEWSLETTER ON LEADERSHIP STRATEGY FOR A NEW CENTURY
A
Publication
of Strategic
Leadership
Associates,
Inc.
One of the fundamental challenges that most
organizations of any size face is linking the
organization’s strategy with its commitment to
quality. In many cases, organizational strategy is
set by a few high-level people in the organization,
but the responsibility for executing a quality service
or product remains with the workforce, who neither
understands nor is engaged in the process of
establishing the organization’s strategic position for
the future. This gap between how organizational
strategy is established and how organizational
quality is achieved creates a disconnect in the
organization which deprives it from needed
innovation and improvement.
Instead, the
organization often focuses on needed adaptations
in its internal environment and structures, missing
the needed external focus to enhance its long-term
quality and improve its strategy and success in the
future.
O
Our work with client organizations in the
process of linking strategy with quality has
yielded six best practices which distinguish
organizations that are able to involve the workforce
in achieving quality standards which continuously
improve its organizational strategy. The six linking
practices between organizational strategy and
quality include the ability to:
Focus on Contribution versus Capability
Simplify Work Processes and Structures
Establish Measurable Quality Standards
Which Are Employee-Driven
Systematically Evaluate, Reward, Promote,
and Recognize Group Achievement
Develop Strategic Alliances and
Partnerships
Involve the Client or Customer in the
Process of Evaluating Success
SUMMER 1993
Focus on Contribution versus
Capability
Most organizations of any size beyond an entrepreneurial team of five to ten people often begin to
rely quite heavily on specialization and the individual capabilities of the organization to improve its
long-term productivity. One client professional
service organization had grown rapidly from 10 to
23 employees. In the process, they developed
highly refined, technical specialties which began to
rob the client of needed flexibility and innovation.
One of the traps of larger organizations is the
tendency to focus upon “what we can do” or “what
we can produce.” This often means an over-reliance on capabilities and products rather than upon
integrated strategy.
From a client or customer perspective, it becomes
more important to identify the desired contribution
we intend to make to our clients based upon their
changing needs and environments and how we
need to reshape the organization and its strategy
to address these contributions. We suggest three
basic approaches to evaluating a client’s
contribution.
First, how does our product or service contribute to the client’s quality of life? In other words,
does it improve the work environment of the
client? Does it help contribute to the development
of their employees and their organization? Does it
help improve their organizational or personal
systems? And does it have a positive impact on
people’s attitudes and sense of human values and
meaning?
Secondly, how does our product or service
contribute to the quality of our client’s work?
Whether the work of our client is being a family,
being a business, or being an executive leader, it
is important that we focus our attention on facilitating and
the advent of new computer technology and an informasimplifying the work processes of our client. Our products
tion-based system of organizational management, it is
and services need to be redesigned and reengineered to
important for an organization to decide upon which
address the client’s needs for improved
information is useful for the organization
satisfaction,
service,
and
to function and how to use information
responsiveness in their personal and
to simplify work processes and
Organizational strategy
organizational settings.
structures. Simplification means shortening the communication and delivery
is set by a few high-level
Thirdly, how does our product or
system between those who produce the
people in the
service contribute to the public conservice or product and those who
organization, but the
tribution or society as a whole? This
actually use or receive it. The real issue
responsibility for
may seem to be a very lofty goal for a
in
organizational restructuring
is
business struggling day to day to make
simplification, not downsizing, nor
executing a quality
payroll and to provide a meaningful work
decentralization or centralization. The
service remains with
environment for its employees. But lifeneeds and circumstances of the
workforce.
sustaining organizations and long-term
situation may determine which of these
leaders design their products and
approaches is most appropriate. The
services to make a lasting impact on a
common
principle,
however,
is
social quality and the larger environment
simplification of work processes and
of society as a whole. Matsushita Electric, in developing
structures.
its mission statement in 1932, asserted that the prosperity
of society as a whole and the elimination of poverty
Establish Measurable Quality Standards
through the development of goods and materials to satisfy
Which Are Employee-Driven
human needs was the basic tenet of their organization’s
success. Today, Matsushita Electric is a primary high
Recently, we had the experience of working with a military
technology leader, unmatched by its competitors in
organization by interviewing over 200 employees regarding
developing electronic components and parts for the
the needed quality standards for the future of the
world’s rapidly growing electronic marketplace.
organization. This exercise assisted management in
gaining employee perspectives on the future organizaSimplify Work Processes and Structures
tional strategy to the year 2000. When we compared
employee lists of quality standards with management’s
One of the current buzz words in organizational strategy is
lists of quality standards, there was almost no similarity.
“downsizing,” or a popular euphemism often called
However, when we compared the list of quality standards
“rightsizing.” We find that these exercises often amount to
across over a dozen employee groups, it was interesting to
meaningless shifting of priorities and personnel within an
note the same perceptions of the real measures of quality
organization, with great frustration and lack of success.
were pervasive. Many people overlook the need for
The research on downsizing organizations indicates that
specific quality standards and measures in an organiafter about three years, the same organizations
zation; or, they get caught in a system of complicated
experience the same degree of frustration and inability to
metrics and measures that are projected by management
succeed that contributed to their need for downsizing in
onto the workforce. If one would do a careful review of
the first place. In other words, the real organizational
Edward Demming’s principles of total quality manageissues were not addressed. Additionally, organizations
ment, it would become apparent that employee work
which rapidly downsize often fail to take into account the
teams should be: responsible for determining their own
lack of productivity and morale among employees who
quality standards, responsible for the measurement
remain in the organization. Managers tend to believe that
systems of these quality standards, and responsible to
employees identify with and are grateful to the organization
report to management on the continuous progress of
that has saved their jobs. In fact, research indicates the
these quality standards.
opposite. Employees often identify with their colleagues
who have been forced out of the organization. They
recognize their own vulnerability in the fate of their peers.
Continued
Many of our clients often face the dilemma whether to
centralize or decentralize key functions.
One large
organization of 4,500 employees with which we are
working has been tugged in many directions by its various
constituencies to either centralize or decentralize the
operation. We suggest that the main purpose of an
organizational restructuring exercise is simplification. With
Systematically Reward, Promote, Recognize, and Evaluate Group Achievement
constellation of independent businesses which would work
together to provide integrated services to a regional base
of small businesses. All organizations simply must realize
that the needs of their clients often far
Almost universally in organizations,
transcend their ability to satisfy these
recognition and achievement programs
needs with their current unique specialfocus on individual achievement, with
ization. Consequently, linking with other
Organizational
rewards and standards set by manageorganizations to provide products and
ment. In a recent project for a large
restructuring is
services is an essential ingredient of
client organization, one of the questions
simplification, not downlong-term organizational strategy. One
we asked 180 employees was to
large, urban school district with which
sizing,
nor
evaluate the success of the organizawe have worked has successfully
decentralization or
tion’s current evaluation, recognition,
experimented with an in-school clinic,
and reward systems. Overwhelmingly,
Centralization.
providing mental health services, health
employees favored group reward
services, and educational diagnostic
programs
rather
than
individual
services within a school building.
incentive
programs.
Secondly,
Strategic alliances and partnerships are
employees strongly suggested that group reward
essential ingredients to long-term strategy and quality.
programs be managed by a panel of peers rather than
addressing the quality standards and performance
Involve the Client and Customer in
measures of management. These two principles are
Evaluating Success
important priorities in truly motivating an organization’s
workforce to succeed. Employees almost universally tend
Many organizational evaluation processes that we observe
to favor group versus individual incentive programs and a
peer system of review to evaluate and recognize
involve an internal management review of the
achievement. In this particular organization we were quite
organization’s success. If these processes are good, they
surprised at these results since employees receive large
also include involving employees in evaluating the
cash bonuses for individual technical achievement at the
organization’s long-term success. However, one fundaend of the year. Many of these awards amounted to
mental ingredient is often missing in evaluating an
several thousand dollars for a few technical leaders in the
organization’s strategy or success. Quite simply, it is to
organization. It was interesting that even these few
involve the client or customer in assessing past contribuleaders felt that behind every individual achievement was
tions and future strategy. It is interesting to note that in
a group effort. In this particular case, this individual
professional athletics, most management and organizaachievement program also served to isolate different
tional changes are driven by receipts in the box office.
levels of employment in the organization separating
This is a quick feedback system to the success of
technical workers from highly specialized researchers and
professional sports. I remember growing up as a young
scientists. This created for some uncomfortable dynamics
child in Boston, Massachusetts watching the dismal
in the organization and actually contributed to an absence
“failure” of the Boston Bruins to achieve any kind of
of teamwork.
successful season in terms of wins and losses. However,
the Bruins continuously outdrew the Boston Celtics, who
were then national champions at the box office because
Develop Strategic Alliances and
they satisfied a public need for excitement, unpredictability,
Partnerships
and enthusiasm in
the world of sports.
However one reads the future trends of organizations, it is
The Leading Edge ©1993
imperative that we recognize the common fundamental
What’s important to
Strategic Leadership Assoprinciples. We live in an interdependent world. No longer
organizational
ciates, Inc., Volume 2, No. 1.
can an organization — be it a small management
success from an
One time permission is granted
consulting firm or a large corporation — take on the chalinternal view may not
to subscribers who receive The
lenge of producing its products or services in isolation.
be
nearly
as
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Strategic partnerships and alliances are the new wave or
important to a client
article if it includes the name and
organizational change in the future. Very few organizain terms of their
address of this organization. We
tions can provide their product or service in isolation from
desired impact or
request a copy of your reprint for
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involving groups of
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counting, public relations, and marketing services in a
strategy is a healthy practice of closing the loop between
the internal and external quality standards. One humorous
example comes to mind in working with a school district to
project future needs for an inner city school. At the end of
a focus group with young students, a small seven-year-old
tugged at the sportcoat of one of our interviewers and
asked, “Hey, mister. I’m not sure what’s gonna’ happen to
our school, but would you please tell them to put softer
toilet paper in the bathrooms?” While this suggestion
about softer toilet paper did not make it to our final report,
it certainly did make it to the principal’s desk, because in
the end, the customer’s perspective of what’s valuable
may shed some light on what’s important in the entire
organization. It is interesting to note that in this individual
school, the insights of the small seven-year-old were much
more substantive in terms of the larger organization. One
of the important strategies for the future of that school was
to create a much softer environment for students with less
reliance on discipline and firm forms of punishment,
shifting a balance to more recognition and support of
student achievement. The simple analogy of softer toilet
paper became a theme for the needs of the organization’s
change process.
Assisting organizations to achieve their strategic goals in
the future almost always points out the need for expanding
these six principles in our organizational practices. They
are not very complicated; there is little magic to their
execution; and they do not require large amounts of
money or external assistance to make them happen.
They simply are a matter of gaining objectivity in our
perspective in moving our organizations forward. They
often include more involvement between our internal and
external stakeholders, which includes employees and
clients. They also focus on the contributions we desire to
make rather than upon the products and services we have
to offer. Linking organizational strategy to quality is
probably one of the most fundamental themes we
encounter in organizations with which we work day to day.
These six principles represent the best practices we have
observed and assisted organizations in implementing. We
hope they contribute to your mission as well.