Assessing Key Organizational Elements

Now that you have read the two case studies, pondered them, and discussed them with top management, you may be ready to address the following issues vis-à-vis your proposed DFTS initiative:

Leadership commitment
Understanding the leadership role
Understanding strategic linkage
Ensuring organization-wide participation
Understanding the need for customer focus
Current quality management capability

As mentioned in Chapter 5, DFTS requires strong leadership and infrastructural support to be successful. This chapter attempts to emphasize the critical importance of taking another look at the state of leadership commitment and capabilities. This involves assessing the following key organizational elements (see Table 20.2): creating leadership commitment, understanding the leadership role, assessing strategic linkages, ensuring organization-wide participation, understanding the need for customer focus, and assessing current quality management capability. These elements determine the degree of preparedness for a major intervention such as DFTS. You may either carry out a traditional assessment based on brainstorming or use AHP methodology (see Chapter 8) to assess overall preparedness. These elements are discussed in the following sections.

Table 20.2. Assessing Key Elements of Organizational Preparedness in a DFTS Initiative
Organizational Element	Assessment: Strong (S), Medium (M), or Weak (W)
Creating leadership commitment
Understanding the leadership role
Assessing strategic linkages
Ensuring organization-wide participation
Understanding the need for customer focus
Assessing current quality management capability

Creating Leadership Commitment

Genuine commitment and involvement of top executives, led by CEOs, are sine qua non for successful implementation of a DFTS initiative. Without these, such initiatives are doomed to failure. As Case Study 20.1 illustrates, Toyota's quality initiatives were driven by generations of successive chief executives over nine decades. In such rare cases, organizations develop strong beliefs, systems, procedures, and often their own lexicons and folklores. That is very powerful, cannot be easily taken away, and becomes a self-sustaining source of competitive advantage. Performance cultures based on positive beliefs and ideas can be bedrocks of quality and performance for long periods of time much beyond executive life spans. This is the nature of organizations with strong-performing cultures. For such cultures to be fostered, CEOs must leadthere is no substitute for that. Toyota's is a formidable case in that four generations of leaders have led the organization with a consistent message. The message has been based on customer focus, worker empowerment, waste elimination, and continuous improvement of products and processes. These now constitute Toyota's deep-rooted corporate philosophy and are manifested in its operations worldwide.

Organizational cultures based on transforming ideas become part of the institutionbuilding process and are central to an organization's core beliefs, whether stated or not. Although formative years provide great opportunities for fostering such ethos, strong cultures can also be cultivated by committed CEOs in companies without compelling histories, like Toyota's. The most celebrated quality management intervention in the West is GE's formidable Six Sigma initiative, led by Jack Welch (as discussed in Case Study 20.2).

Although GE's Six Sigma initiative is exemplary, the lesser-reported cases of Samsung, Hyundai, and Caterpillar are remarkable too. We have studied a number of major corporate initiatives across a variety of industries and cultures. We have found a common denominator in every case of successful deployment: the total commitment and involvement of the CEOs. We cannot overemphasize this simple fact.

Understanding the Leadership Role

The CEO and top managers must do a number of things. But the one thing they must never do is launch the initiative without adequate preparation and without understanding the challenges involved. Do we understand how it works? Is the CEO committed enough to bet his job on the initiative's resounding success? Are we ready collectively, and will we give it our emotional energy? Can we drive it collectively with enthusiasm and as a top priority for the next two to three years and support it much beyond that? All these questions are part of executive buy-in, discussed in Chapter 5. As stated throughout this book, DFTS is all about leading change. The CEO, together with top management, should be prepared for the following:

Change yourself: First and foremost, you must understand the need to change and be willing to do so elegantly. Top management must embrace change before asking anybody else to change. This means accepting new priorities, methods, systems, and processes as needed. In short, it's a new way of doing things.
Learn: Learning is crucial to improvement. In the absence of actually understanding how the initiative works, commitment and support will be phony, if they exist at all. The return on learning is highest at the top executive level in that it makes everything else possible. The state of mind that "learning is for the guys down the line" must be discarded.
Communicate: The CEO and his team must communicate their message clearly and enthusiastically with each other as well as others in the organization. A robust communication plan must be prepared. They should work diligently to share information and encourage empowerment down the organizational hierarchy. The people closest to the development process and to the customers must own and be able to influence the new development process.
Provide resources: DFTS requires human, technical, and financial resources. These must be planned and budgeted for. But the most important resource DFTS needs is top management's time, focus, and attention. That's a precious commodity and should be budgeted for too!
Initiate organization-wide learning: The initiative requires leadership as well as technical skills. These were introduced in Chapter 5 and are discussed further in Chapter 21.

Assessing Strategic Linkages

It is important to understand how the initiative supports the company's strategic objectives, such as growth, market share, and profitability, and how they are related to cost, quality, and customer satisfaction. At GE, Welch saw Six Sigma in the following three strategic contexts:

As a common learning system to prepare future leaders across the large, multibusiness, global organization
As a means to provide customer-focused products and services
As a way to improve cost and quality competitiveness

It is important to understand these in an organizational context and also vis-à-vis other initiatives and priorities. Doing so creates clarity as to whether, why, and when the organization should launch such an initiative.

Ensuring Organization-Wide Participation

The best solutions often come from the workersthe software developers in this context. Top management must involve them and make them enthusiastic. Doing so will ultimately determine whether the implementation succeeds. It is important to prepare the workers for the new process as well as provide them with the training they need to be active participants. Top management must address two additional issues to create credibility:

Willingness to take risks: More than anything else, this demonstrates management's commitment to the initiative. Occasional delays and even setbacks will occur. It is vital to impart an atmosphere that tolerates innovationeven if it is not always successful. Zero tolerance for failure and mistakes will shut down creativity.
Be realistic in setting targets: It is wise not to drive people crazy by setting impossible targets and schedules when DFTS is first implemented. Enthusiasm for learning is critical for successful deployment.

Understanding the Need for Customer Focus

DFTS is a customer-focused quality initiative. Therefore, it is important that the organization as a whole understand the business imperatives of being customer-focused. In absence of such clarity, it is likely to become a mere slogan. The top management team can help create such a milieu by doing things such as regularly visiting customers in their work environment.

Structured gemba visits are of immense value (see Chapter 11). The objective should be to obtain valid customer input for software design as well as enrich the customer experience during the software development cycle. Many managers visit customers only when prospecting business or fire-fighting. The best opportunities are provided when things are going fine, when the product is being conceived, and during all the upstream activities associated with the development process. Top management should have regular and structured interaction with the customers and expect the same from others. Simply calling customers regularly and responding honestly and adequately to their concerns cannot be overemphasized. Every meaningful customer interaction must be documented and disseminated. In the absence of such commitment to customers, the initiative may not go very far. Such cultural change must be initiated and sustained by the CEO and the top management team. A structured, customer-focused approach requires building competence in four areas:^[15]

Customer relationship management deals with building trust and expectations so that the customers call when they have a need.
Interaction management focuses on the interaction that takes place after the customer calls. Customers need to be assured that the firm is more interested in meeting their needs than just making a sale. The interaction should be hassle-free.
Diagnosis management focuses on best-practice guidelines for diagnosing customer needs when the customer contact person (CCP) interacts with the customers. This involves CCP experts developing methods for defining what the customer really wants.
Customer-service management consists of the ongoing dialogue that occurs when service is requested during and after delivery.

Assessing Current Quality Management Capability

You must assess the organization's quality capabilities as part of the preparatory steps. This can be linked with the assessment of training needs discussed in Chapters 21 and 22. An assessment of quality capability addresses the following:

Has the organization undertaken other quality initiatives in the past? What was the outcome? Why? What was learned? What can be done to improve the initiatives? How can DFTS be integrated with existing quality systems?
Does the organization have a quality system in place such as a Software Quality Metrics System (SQMS) or a Cost of Software Quality (CoSQ) system? If so, how have they helped? How can we improve them?
Do we have any CMM™ competencies?
What is our human resources inventory as far as quality management capability? How are individual (PSP™) and team software (TSPi™) competencies? How can we use these resources more effectively? How can we enhance these capabilities?
What are the organization's values regarding learning, customer focus, and quality? Have they been helpful in creating a quality-conducive culture? How can we reinforce our quality culture?

This chapter has presented two case studies, involving Toyota and GE, that indicate the enormity of leadership challenges in establishing sustainable quality leadership. They also indicate the sheer centrality of committed and consistent leadership. We have discussed organizational preparedness issues that need to be looked into and addressed before a formal launch. Such an assessment creates awareness of leadership and organizational challenges during preparatory stages. It is not about the decision to go ahead with the initiative or not because that would have been decided on at the "buy-in" stage. It is about when and how to best launch the initiative. Invariably, such an analysis leads to the identification of important organizational deficiencies that need to be addressed. The leadership asks the following questions at this stage: Are we ready to launch the DFTS initiative? If not, what needs to be addressed to prepare us to do so? Asking the right questions is the key.