Driving Quality Transformation & Organizational Change

Posted on Aug 6, 2025 in Industrial Design Engineering

Understanding Organizational Change

Strategic Change

Strategic change is broad in scope and stems from strategic objectives, which are generally externally focused and relate to significant customer, market, product/service, or technological opportunities and challenges. It rolls into plans and policy, broader, relating to markets.

Process Change

Process change is narrow in scope and deals with the operations of an organization. An accumulation of continuously improving process changes can lead to positive and sustainable cultural change. This primarily involves internal processes, aiming to improve customer satisfaction.

Foundations of Quality Transformation

Key Factors for Quality Transformation

Key factors for a quality transformation include:

  • Committed leadership
  • Top talent
  • Culture based on customers, continuous improvement, and teamwork
  • Supporting infrastructure

Guiding Transformation Principles

Guiding principles for transformation:

  • Establish and communicate a clear guiding platform.
  • Engage as leaders and build local ownership.
  • Identify, train, and support the right people.
  • Tie the initiative to business results and strategy.
  • Focus on the ‘soft’ side as well as the ‘hard’ side.
  • Establish an infrastructure to manage the initiative and track performance.
  • Actively manage and communicate change.

Cultural Change

A quality transformation—or really any transformation—requires cultural change. Culture is the set of beliefs and values shared by people in the organization, reflected in management policies and actions, guiding behavior, and informing decision-making.

The Change Equation

The Change Equation is represented as: D x V x P > R

Where:

  • D = Dissatisfaction with the Status Quo
  • V = Vision for Change
  • P = Process for Change
  • R = Resistance to Change

Navigating Change Implementation

Addressing Dissatisfaction with Status Quo

Demonstrate to stakeholders that they should be dissatisfied with the status quo by articulating why the change should be made. Two potential strategies include highlighting the current state as ‘sinking’ and the future state as ‘brighter’. This often involves illustrating immediate and long-term issues that necessitate change.

Common Implementation Mistakes

Common mistakes during implementation include:

  • Effort is regarded as a short-term program, despite rhetoric to the contrary.
  • Compelling results are not obtained quickly.
  • Process is not driven by a focus on the customer, strategic business issues, and senior management.
  • Training is not properly addressed.
  • The organizational culture remains one of command and control, driven by fear, game-playing, budgets, schedules, or bureaucracy.
  • Structural elements in the organization block change (e.g., compensation systems, policies, and procedures).

Life Cycle of Quality Initiatives

Quality initiatives typically progress through the following life cycle stages:

  • Adaptation: The initial implementation of a new quality initiative.
  • Regeneration: When a new quality initiative is used to generate new energy and impact from an existing one.
  • Energizing: When an existing quality initiative is refocused and given new resources.
  • Maturation: When quality is strategically aligned and deployed across the organization.
  • Limitation or Stagnation: When quality has not been strategically driven or aligned.
  • Decline: When a quality initiative has had limited impact, is failing, and is awaiting termination.

Assessment and Learning

Self-Assessment: Where Are We?

Periodic self-assessment can help determine where organizations are in the life cycle of any business initiative—including quality—to identify strengths and Opportunities for Improvement (OFIs), and to determine what is working.

Evaluations should cover:

  • Management and leadership
  • Product and process design
  • Product control
  • Customer and supplier communications
  • Quality improvement
  • Employee participation
  • Education and training
  • Quality information and results

Knowledge Management & Organizational Learning

  • Knowledge Assets: Refer to the accumulated intellectual resources that an organization possesses.
    • Explicit Knowledge: Information stored in documents or other forms of media.
    • Tacit Knowledge: Information formed around intangible factors, resulting from an individual’s experience.
  • Knowledge Management: Involves the process of identifying, capturing, organizing, and using knowledge assets to create and sustain competitive advantage. It requires a systems approach, a common framework, and a supporting culture and values.

Principles and Practices for Change

Core Principles for Managing Change

Key principles for managing change effectively:

  • Unfreeze people’s attitudes and behavior before they can change.
  • Change can only succeed with effective leadership.
  • Change agents must manage interdependence.
  • Effective change must involve the people whose jobs are being changed.
  • Refreezing is needed to make gains permanent.

Effective Change Management Strategies

Effective change management involves:

  • Gaining buy-in from employees.
  • Assessing risks involved with change.
  • Understanding the current state and reactions to past change initiatives.
  • Providing motivation beyond the ‘carrot and stick’ approach.
  • Utilizing tools to make meetings efficient.

Insights from Quality Leaders

Global State of Quality Takeaways

According to the Global State of Quality 2 report, if you want world-class quality in your organization, there are ten essential actions:

  1. Evaluate how quality is understood.
  2. Assess the organization’s culture.
  3. Inventory quality and continuous improvement measures.
  4. Highlight your cost savings.
  5. Review incentives used to encourage quality.
  6. Create plans for knowledge transfer.
  7. Review how employees are trained in quality.
  8. Assess how customer quality needs are shared.
  9. Assess the quality process throughout the supply chain.
  10. Identify gaps to a world-class profile.

Measuring Quality Impact

A significant finding is that 60% of organizations do not know or do not measure the impact of quality. A proposal based on Six Sigma programs suggests that instead of tracking overall program savings, organizations should track:

  • Savings as a percentage of revenues.
  • Return on Investment (ROI = Benefits / Costs).
  • Savings-to-costs ratios.

Case Study: Momentum Group (Baldrige Recipient)

The Momentum Group, a contract textile company, was a 2016 Baldrige Award recipient, recognized for:

  • Being the first to introduce reduced environmental impact fabrics.
  • Reduced sample production time.
  • Establishing a foundation for quality improvement and cost reduction.
  • Having a dedicated Quality Leadership Team.
  • Implementing an annual self-assessment process.
  • Fostering strong employee engagement and retention.
  • Utilizing a reward and recognition program, supporting long-tenured employees, and offering job rotations into development roles to enhance employee skills, broaden influence, and enrich their careers, demonstrating significant investment in employees.
  • Leveraging senior leaders as coaches.

Case Study: Caterpillar

Caterpillar’s transformation highlights:

  • Successful Six Sigma process improvement and people engagement.
  • A leadership team committed to embedding Six Sigma into Caterpillar’s DNA, extending deployment to dealers and suppliers.
  • The Caterpillar Production System, powered by Six Sigma, which integrated lean initiatives, safety, quality, and embraced continuous improvement.
  • An exemplary application of Caterpillar’s PDCA (Plan-Do-Check-Act) model.