en FOUR PRACTICAL -J: "The methods developed by Professor Shoji Shiba and the Center for Quality of Management can only sharpen an executive's effectiveness in an increas Cl REVOLUTIONS ingly tumultuous business environment. The authors have produced a very )> readable perspective on contemporary management challenges while pre Qo senting a number of eminently helpful tools." IN MANAGEMENT - Louis Lataif, Dean of Boston University School of Business ~ "The authors of this book have a vivid understanding of what it takes to r- survive and compete in a rapidly changing world." c m SYSTEMS FOR CREATING - Bob Barbour, Director and Chief Executive, Centre for Competitiveness (former World-Wide Manufacturing Executive, Digital Equipment Corporation) z UNIQUE ORGANIZATIONAL CAPABILITY Four Practical Revolutions in Management is one of the most comprehen sive sources of information on leading management practices. Based on the work of Shoji Shiba and practitioners in many companies, the book is a significant revision of the authors' previous title-New American TQM (Productivity Press, 1993). Arranged around the four revolutions-customer focus, continuous improve ment, total participation, and societal networking-Four Practical Revolu tions in Management helps companies embrace cutting-edge management ideas. The techniques presented allow managers to design their own integrated management system and enable companies to create unique organizational capabilities. It features: • Hoshin management • Integrating methods, e.g., Six Sigma • Team-building tools • Mobilizing organizational change • 7 QC tools • Cycle-time reduction Filled with numerous case studies and examples, Four Practical Revolutions in Management helps companies organize a comprehensive management strategy that involves all employees. These principles have been successfully implemented at leading companies and non-profit institutions. ISBN 978·1·56327·388·9 0 90000 CRC Press 6000 Broken Sound Parkway, NW Suite 300, Boca Raton, FL 33487 Taylor & Francis Group 270 Madison Avenue an informa business New York, NY 10 01 6 SHOJI SHIBA DAVID WALDEN www.crcpress.com 2 Park Square, Milton Park Abingdon, Oxon OX14 4RN, UK PRODUCTIVITY PRESS I THE CENTER FOR QUALITY OF MANAGEMENT 8833116688..ccoovveerr..iinndddd 11 1122//1122//0088 1111::4444::1111 AAMMI I I I Four Practical Revolutions in Management Systems for Creating Unique Organizational Capability TThhiiss ppaaggee iinntteennttiioonnaallllyy lleefftt bbllaannkk Four Practical Revolutions in Management Systems for Creating Unique Organizational Capability Shoji Shiba David Walden With Contributions by Alan Graham, John Petrolini, and Many Others ~CRC 'e::J Press Taylor & Francis Group Boca Raton London New York CRC Press is an imprint of the Taylor &. Francis Group, an informa business CENTER FOR QUALITY OF MANAGEMENT Cambridge, Massachusetts CRC Press Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2007 by Taylor & Francis Group, LLC CRC Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Version Date: 20150112 International Standard Book Number-13: 978-1-4987-3192-8 (eBook - PDF) This book contains information obtained from authentic and highly regarded sources. Reason- able efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www. copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organiza- tion that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the CRC Press Web site at http://www.crcpress.com To Mieko and Sara and To the Memory of Our Dear Friend Tom Lee TThhiiss ppaaggee iinntteennttiioonnaallllyy lleefftt bbllaannkk Contents List of Cases xiii Preface XV Acknowledgments xxiii Introduction: BUSINESS EVOLUTION 1 1 The Evolution of the Customer Satisfaction Concept 3 1.1 What Is Customer Satisfaction? 3 1.2 Evolution of Customer Satisfaction Methods 11 1.3 Evolution of Company Integration 13 1.4 Continuing Evolution 15 2 Survival in a Rapidly Changing World 19 2.1 Practice Systematic Development of Skill 22 2.2 'freat Management as a Coherent System 28 2.3 Focus on People and Their Purposes 30 2.4 Integrate Best Practices 35 2.5 Financial Benefit 36 3 Developing a Unique Organizational Capabllity 41 3.1 Four Practical Revolutions in Management 41 3.2 Evolution of Our Understanding 43 3.3 Four Levels of Practice 47 The First Revolution: CUSTOMER FOCUS 49 4 Change in the Work Concept 51 4.1 Market-In 51 4.2 Customers 55 4.3 Philosophy-In and Philosophy-Out 56 5 Evolution of Customer Focus and Its Challenges 59 5.1 Three Stages of Customer Focus 59 5.2 Customer Concerns 60 5.3 Integration of Concerns 66 5.4 Individualizing Customers 69 vii viii FOUR PRACTICAL REVOLUTIONS IN MANAGEMENT The Second Revolution: CONTINUOUS IMPROVEMENT 71 PART 2A-INTRODUCTION: FUNDAMENTALS AND VOCABULARY 6 Improvement as a Problem-Solving Process 73 6.1 Management by Process 73 6.2 WV Model of Continuous Improvement 74 6.3 Continuous Improvement of Processes for AllJYpes of Work 84 6.4 Continuous Improvement and the Scientific Method 92 PART 2B-MANAGING EXISTING PROCESSES 7 Process Discovery and Management 95 7.1 Thinking in Terms of Process 95 7.2 Process Discovery 98 8 Process Control and Variation 107 8.1 A Typical Example of (Mishandling) Variation 108 8.2 Making the Most of Variation 109 8.3 Process Control and Process Improvement 117 8.4 Continuing the JYpical Example of Variation 118 9 Reactive Improvement and the 7 Steps Method 123 9.1 Identifying the Problem 125 9.2 Standard Steps and Tools 131 9.3 The 7 Steps: A Case Study 133 9.4 The 7 QC Tools 145 10 Management Diagnosis of the 7 Steps of Reactive Improvement 149 10.1 General Guidelines for Managers Diagnosing a Ql Story 149 10.2 Step-by-Step Guidelines for Managers Diagnosing a QI Story 152 10.3 Case Study for Diagnosis of the 7 Steps 163 10.4 Run PDCA and Develop Skill 173 11 Process Management Mobilization Case Study-Teradyne 175 11.1 Introduction to the Teradyne Mobilization Story 175 11.2 Introduction of the 7 Steps 175 11.3 Experience Using the 7 Steps 177 11.4 Improving Mobilization 178 11.5 Process Discovery and Process Control 181 PART 2C-ONE-TIME EFFORTS 12 Planning Projects or Tasks 183 12.1 The 9 Steps Compared with the 7 Steps 184 12.2 The 9 Steps Mobilization at Teradyne 185 12.3 A Teradyne Illustration of the 9 Steps Use 186 12.4 Relationship of the 9 Steps to Other Methods 196 Contents ix PART 20-FINDING NEW DIRECTIONS 13 Proactive Improvement 199 13.1 Collecting Data for Proactive Improvement 201 13.2 Language Data and Use of Semantics 204 13.3 Toward Standard Tools and Steps for Proactive Improvement 211 13.4 Customer Visitation as a Method of Collecting Proactive Improvement Data 221 14 Applying Proactive Improvement to Develop New Products 235 14.1 Stage 1: Develop Understanding of Customers' Needs and Environment 239 14.2 Stage 2: Convert Understanding into Requirements 248 14.3 Stage 3: Operationally Define Requirements for Downstream Development 260 14.4 Stages 4 and 5: Generating Concepts and Selecting the Concept 272 14.5 Expanding View of WV Model and Proactive Improvement 278 The Third Revolution: TOTAL PARTICIPATION 283 PART 3A-INTRODUCTION 15 Engagement and Alignment of Organization Members 285 15.1 Engaged Employees for a Rapidly Changing World 285 15.2 Explicit Joining of Improvement and Routine Work 287 15.3 Processes and People 291 PART 3B-INDIVIDUAL SKILL DEVELOPMENT 16 Coordinating Behavior 297 16.1 Societal Networking Case Study of the CQM Study Group on Conversation 299 16.2 Expansion of the Principles of Semantics 302 16.3 Some '!Ypes and Models of Conversations 305 16.4 Burchill Case Study from the Navy 323 17 Leading Change 329 17.1 Technical Skill 331 17.2 Human Skill 332 17.3 Conceptual Skill 333 18 Self-Development 341 18.1 Lessons from the Non-Business World 342 18.2 Local Improvement in Absence of a Supportive Environment 347 18.3 The Bottom Line 358