All entries for October 2009

October 25, 2009

The importance of cooperation

It is still really hard for me to realize the idea that cooperation is more beneficial than competition in organization. We always had to be told that competition is the crucial aspect and the more competitive you are the more chances you have to be successful. However, system approach reveals drawbacks to this way of thinking. Organizations are systems, which locate in broader systems such as industry, national economy and world economy. That is to say every organization is the subsystem or part of another system. All parts within a system need to be integrated in order to maintain normal condition of the system, therefore if one part of the system does not work properly overall system will be “ill”. Organizations competing within one industry can not be successful, because different part of one system do not allow system to develop and achieve goals, in the long run someone win, and someone lose, however the success of one part is not long-term. This is the case for competition within the organization. Competing departments are parts, which destroy the system and they never can achieve goals of organization. If someone lose you can not win, this is the important law of life, which can be seen everywhere – society, politics, economy, technology. So the cooperation within the organization, within industry etc. becomes crucial aspect for organizations. Moreover, the effect of synergy, which recognizes that system has new characteristics which are not just a summary of its individual part’s characteristics, encourages us to cooperate with departments (organization), organizations (industry) and people around (society, life).

Excellence models: comparison and relationship

There are number of models, which could help organizations in their journey to excellence - OL, TQ, MBNQA, Deming prize, Excellence model, ISO and other national awards. What is the relationship and difference of these models?

First of all they are based on the ideas of different countries and have different origin (TQ and Deming prize – Japan, MBNQA, LO – America, Excellence model, ISO – Europe).

Secondly, all of them are related to quality, however some of them are more focused on delivering quality of products (TQ, ISO), while others concerned with overall organizational performance (MBNQA, Deming prize, Excellence model). Almost all of them concentrated on importance of leadership, commitment and involvement of employees, as well as management based on processes and facts. Although they have many things in common, some models have broader scope. For example, ISO and TQ are more customer-oriented approaches, while other models admit the importance of all stakeholders of the organization (MBNQA, Deming prize, Excellence model). Moreover, Excellence model and MBNQA also have a social responsibility as a significant principle, which is not covered by other models.

As far as method of models is concerned, all of them are non-prescriptive, that is to say that models assume that ways of achieving excellence in business could be different, however many of them have the criteria or standard, compared to which they are assessed (ISO, MBNQA, Excellence model).

And what is the relationship of the models? It is important to say that each model admit continuous improvement as a significant aspect to achieve a sustainable excellence. That is to say in the long run all of the models are intended to build a learning organization. MBNQA, Deming prize, Excellence model and ISO are based on the ideas of TQ management. The relationship between models can be presented in the form of pyramid, where the peak is the learning organization, followed by TQ as the basis or philosophy and then the EFQM, MBNQA, Deming prize, ISO as different methods or approaches to achieve excellence and learning organization. It depends on the organizations what approach to choose, they are similar in the basis (TQ), have the same goal (LO), however different in the focus and scope.

Learning organization

Despite the fact that there is huge amount of research done on building and developing learning organization and numbers of advices, both theoretical and practical given what should be done in order to be a learning organization, managers usually do not use them because of their complexity (they do not know how to start and from what to start) or just because of misunderstanding of the importance of learning in organization. Managers often assume that instead of thinking about such ambiguous things as learning they need to do the real work and to achieve targets, budgets, plans, etc. Although this approach might be effective in the short-term, managers then start to understand that organization could work better and fully use its potential. Managers organize different training courses for their employees and spend a lot of money, hoping that it will result in improvements. But then they realize that benefits of this training less than costs and throw away the idea of learning, forcing employees work harder and harder.

Another example. Managers fully understand the significance of learning and try to follow the instructions of building learning organizations by creating environment, spending money and resources on training, providing employees with necessary equipment and facilities, encouraging their ideas. However, then they start to realize that it didn’t help and organization continues to work as it does before. They ask what is wrong, I did my best in order to improve the situation, I followed all the instructions I have read in the books?

In my opinion, building a learning organization is important, but not an easy task and it takes time for visible results. However, the most important thing that CEOs can not create the learning organization themselves, the learning organization is the process created by both managers and employees. Often in most of the organization we can see how managers and employees do different things: managers are responsible for strategy and directions of the organization and employees for real work, and it is the requirement for employees to do their work and do not interfere with work of managers. It seems that employees still remain just the factors of production in organization. Managers need to understand that in order to do the work better employees need to understand what for they work, they need guiding ideas and understanding what organization want to achieve and what is the directions and strategy of organization, what employees think about it and how they can contribute to it. Managers have to bring up interested employees which then will result in interest of learning and  innovations in organization. Different advices and instructions in books will not work without understanding the system and how important is to work in cooperation with employees.


October 18, 2009

Comparison or understanding variation?

Typically managers use monthly or weekly reports to assess company’s performance and make decisions whether to change something in the process or leave it as it goes. Usually they compare two values: results of the period with results of previous period, results and targets, results of the period compared with the results of the same period in the last year. However, the comparison of two values can not give overall picture of the process, therefore, comparison is limited. Moreover, the comparison with the values of the previous period is weak, because previous period or last year can be different from the present, different external forces may affect previous period. Furthermore, the numbers and values are subjects to continual variation, they are not static, that is to say one weak you may be doing ok, but another you may be in trouble. If you follow the numbers and make decisions based on comparison of two values you probably take action when you are in mess and do nothing if you are ok. The period of active actions changes the periods of neglect, but is this the way to continual improvement? What should managers do in order to measure the performance in right way?

First of all it is understanding of the process and understanding what numbers are going to tell you about the process. Numbers should be presented in the broader context as it is a process. Data should be analyzed and interpret and variation should be taken into account. As D. Wheeler (2000) claimed, “before you can improve any system you must listen to the voice of the system”. (Wheller 2000, 21). Wheeler encourages to differentiate between the voice of the customer in the form of the targets, plans and the voice of the process. The comparison approach is to follow the voice of the customer and it does not give understanding how process works.

One of the alternative approaches to measure the company’s performance may be the Shewart’s behavior chart, which differentiate between types of variation and shows it in the graphic format using time series. By setting limitations chart filters out routine variation from exceptional variation and helps managers to see when actions and changes are needed. Also it helps to predict how process will behave in the future, because chart shows the behavior of the underlying process.  

The work of Wheeler throws lights upon the new ways of thinking about the data. It helps to understand that numbers, reflecting the company’s processes are dynamic, because process itself is not static, but changing. Managers should feel and deeply understand the company’s process and data and there are ways and tools exist to help managers to do it. While some of them focuses on financial data and statistical tools as Process behavior chart, others (for example Balanced scorecard) assess the work of the system not only focusing on financial results but also from different organizational perspectives.

Excellence models: ISO vs EFQM

What I have understood after reading articles and papers on the web-sites is that both ISO and EFQM are approaches or models to achieve quality or excellence in business. While ISO is presented as standard, that sets the requirements to achieve excellence, EFQM is non-prescriptive model, which recognizes that there are many ways to approach excellence. The basic focus of ISO is meeting customer needs and providing customer satisfaction trough effective system and process, whereas EFQM focuses on overall performance of the company and customer satisfaction is just part of it. This is, in my opinion, the main difference in the scope of the models. As far as scope of models is concerned it is important to mention the principles of the models. Each model has its own principles, most of which are the same. Despite the similarity of the principles, some of them are covered by each model in different scope.

ISO                                                                            EFQM                                                                            

Customer focus                                                    Customer focus

Leadership                                                            Leadership and constancy of Purpose

Involvement of people                                           People development and involvement

Process approach                                                    

System approach to management                            Management by process and facts

Factual approach to decision-making

Continual improvement                                          Continuous learning, innovation and improvement

Mutually beneficial supplier relationships                 Partnership development

                                                                            Public Responsibility

                                                                             Result orientation

Both of them have a customer focus, leadership and people involvement. However EFQM gives an emphasis not only on people’s involvement, but also on their development. Development and involvement of people is presented as non-separated process. The models also recognize the importance of the process and management of this process and that decision should be made on facts. Despite the fact that each model has continual improvement as a principle, the EFQM includes innovations and learning as principles to sustainable success. As far as partnership development is concerned ISO is limited only with beneficial relationships with the suppliers, while the EFQM focuses on satisfying the needs of all stakeholders, including shareholders, suppliers, customers and employees. Moreover, EFQM includes principles such as Public responsibility and Result orientation, which are not covered in ISO. Thus, the comparison of the principles shows that although ISO and EFQM have many common things, EFQM covers them in wider scope. However, this is just a comparison on the theoretical level.

The interesting thing that we discussed with our team is which model of comparison is right. At the beginning we thought that both of the models have similar scope, that they have things in common and aspects which ISO has and EFQM doesn’t have and vice versa, then after comparing the principles we understood that EFQM has a broader scope and understood that ISO may be part of EFQM, however we can't say it, because despite the fact that EFQM has a wider  approach,  ISO has aspects that EFQM does not cover.          

As far differences of the models are concerned, one of the significant differences is the way models measure and assess the performance of the organization. While ISO uses so called Quality Audit, EFQM uses Self-assessment approach.

Differences of QA and SA

-         QA – comparison of the organizational performance evidence with the standard to find out whether findings comply or not with the standard;

-         SA – identification of strengths, weaknesses and opportunities for further development of the organization in areas presented by EFQM criteria;

-         QA- comparison is made with the static standard;

-         SA- comparison in dynamic with the continually improving points of excellence;

-         QA-is implemented by qualified external auditor;

-         SA- is implemented by trained employees within the company

-         QA – function-based process and covers just one process in organization at one audit time

-         SA- covers all functions and processes in organization

-         QA- single procedure

-         SA – five different approaches depends on maturity of organization and effort put in the SA

Advantages of SA

-         measures both effectiveness and efficiency of the organization

-         involves people at all levels in process of self-assessment

-         internally motivated process, which helps to identify own strengths, weaknesses and opportunities

-         integrates the findings of assessment into business plans and operations

-         encourages the improvement within the organization

-         flexible and less formal approach

Disadvantages of SA

     - since SA involves it’s own people in the process of assessment subjectivity may negatively affect reliability of the findings

     - has different approaches for assessing the organization’s performance and none of them are universally applicable

Benefits of QA

-         single procedure for assessment

-         objective and independent process

Weaknesses of QA

-         is limited to looking for non-compliances with the standard and if the results comply with the standard there is no need for changes;

-         comparison is made with the static standards

-         findings often is not integrated in further plans and operations of the organization

-         often neither auditors nor managers are interested in usage of audit findings for improvements

-         often is used for external purposes such as reputation or ratings

-         independent process which is implemented by auditor and managers, restricted opportunities for participation of employees.

Thus, the comparison between QA and SA shows that both of the approaches have differences, advantages and weaknesses. However, the comparison helps to understand that SA has more advantages for the company’s development and improvement; it is more oriented towards people, their involvement and assessment of their own activities and therefore their development. As for the QA, despite the fact that findings of audit can be more reliable because of independent auditor, these findings often can not enable changes and improvement. However, I do not believe that the ISO do not have advantages more than I found out, so many companies nowadays uses ISO? Why? May be this is because EFQM is more reliable on the theoretical level, but it is not the case in practice, may be it is harder to use EFQM in real life than ISO? It is opportunity for further exploration))))

October 13, 2009

Introduction to MBE

Hello! This is my first experience in writing blogs. It is always hard to start, but I hope that I will like it soon. I have so many ideas in my mind, but the problem is how to organize my ideas in order you can understand it).

          First of all I want to tell you about my perception of the teaching and learning in WMG. Everything is so new to me, absence of standard lectures and seminars, new ways of learning such as blogging and participation in forums, emphasis on team-working, and all of these in English!! It is really challenge for me and it requires time to adapt and change. But in order to be a professionals and truly leaders we should face the difficulties and try to overcome, to seek new opportunities from these challenges and make it work for ourselves. One thing that I understand clearly no one here is interested in our learning more than us, no one will force us or judge, it is our decision how much we want to receive from our learning here, it’s up to us how we want to learn, what we want learn. Our academic tutors and staff provide us with facilities and opportunities for successful learning (learning environment) and our responsibility is to use it and explore the knowledge. There is a huge amount of knowledge out there, but our task to find useful and relevant knowledge for us, the knowledge we can use, develop and apply in our future jobs.

         The second thing I want to mention is the team-working, which becomes the essential part of our learning process. Group-work is not an easy task, because of different views and ideas, which may conflict with each other. Moreover as all of us want to be a leader, there may be some competition among us. Therefore, communicational and interpersonal skills become very important things we should develop throughout our learning process, the ability to understand each other, to find the balanced decision in problem-solving, to accept strengths and weaknesses of each other. By giving objective opinion about our weak points we can learn and help each other how to make things better and, of course, how to turn our strengths into competitive advantage of the group. We are going to work on our mini-projects. So, the first thing we should think about is to start to know more about each other, to make plan and think about the organization of the work. As a group we have aims and we should understand that all of us will work on these aims, and well be assessed as team, not as a group of individuals.

           Finally, as far as video we watched yesterday is concerned, what I understand is that knowledge is close and you just have to open your eyes and explore new opportunities and to be ready for changes. The example of America, having such scholar as E. Deming, who was the teacher for Japanese managers not for Americans and person, who contribute to business excellence of Japan’s organizations, show that desire to development and continuous improvement in organizations is the key to success. We can apply this knowledge in our own lives. People who are flexible and open for changes and ideas, seeking the ways of personal improvement tend to be more successful. This is true for the companies too.

           Another aspect of organizational success is its people. It’s the people who drives organizations forwards, it’s the people who create quality of products and services and therefore it should be people involved in continuous improvement. However, in order to use people’s potential the whole system have to work properly. Because organizations are the complex systems, all of its subsystems and parts should work normally and cooperate with each other in order to maintain overall condition of the system and achieve system’s goals.

P.S. Sorry for grammatical and structural mistakes.

October 2009

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  • Hi, Albina, I agree with your points. Organization has right culture is very important for people. I… by on this entry
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