Attitude toward Customers Organizational rites, rituals, and customs express the organization's unwritten rules about how things are done. How employees dress, interact with each other, and ap- proach their work are all part of this element of an organiza- tion's culture. Rites, rituals, and customs are enforced most employee to employee typically play a major role in the estab Operating Philosophy lishment and perpetuation of an organizationis culture. All of these factors can either help or hurt an organization. UNDERSTANDING WHAT A QUALITY CULTURE IS In an organization with a traditional culture, the primary If managers treat employees with trust, dignity, and re tocus is return on investment and short-term profits. Often spect, employees will be more likely to treat each other in the methods used to maximize profits in the short term this way, and trust, dignity, and respect in everyday interac- have a negative effect in the long run. In order to improve tion will become part of the organization's culture. On the the organization's bottom line on the next quarter's profit- other hand, if management treats employees poorly, employ. and-loss statement, executives might decide to "unload" a ces are likely to follow suit. Both situations, if not changed, defective product on customers, put off critical technology will become ingrained as traditions. These traditions will be upgrades, or eliminate training programs for employees. An perpetuated both by the behavior of employees and by the organization might cut back on equipment maintenance, stories they pass along to one another. This is why it is so im- employee benefits, or performance-incentive programs. All portant to establish a quality culture. If mistrust is part of the of these shortsighted methods are common in organizations organizational culture, it will be difficult to build partner- with traditional cultures, and while they might prop up the ships between internal and external customers. It will also be bottom line temporarily, they invariably lead to disaster in difficult to establish an environment of mutually supportive the long run. A short-term operating philosophy is the rea- teamwork. Organizations that have these problems are not son why traditional organizations often experience a large turnover at the top. The CEOS who apply this short-term Commitment to quality cannot be faked. Employees operating philosophy are often "cut-and-run" managers know when management is just going through the motions. who maximize short-term profits by eliminating essential Changing an organization's culture requires a total commit- functions, activities, and personnel. They then take their percentage of the resulting profits and leave, only to repeat Organizations with traditional cultures tend to look in- ward. They are more concerned about their needs than those of customers. Customer relations might actually be adversarial. Organizations with a quality culture are customer-focused. Customer satisfaction is the highest pri- ority and is the primary motivation driving continual im- provement efforts. To understand what a quality culture is, one must first un- derstand the concept of organizational culture. Every orga- nization has one. An organization's culture is the everyday effectively by peer pressure. manifestation of its underlying values and traditions, In shows up in how employees behave at work, what their ex- pectations are of the organization and each other, and what erations of employees. The grapevine in any organization is is considered normal in terms of how employees approach their jobs. Have you ever shopped at a store or eaten in a restaurant in which the service was poor and the employ- ces surly or disinterested? Such organizations have a cultural problem. Valuing the customer is not part of their culture. No matter what slogans or what advertising gimmicks they use, the behavior of their employees clearly says, "We don't care about customers." An organization's culture has the following elements: Cultural transmitters are the vehicles by which an or- ganization's culture is passed down through successive gen- a cultural transmitter, as are an organization's symbols, slo- gans, and recognition ceremonies. What an organization truly values will show up in behavior of its employees, and no amount of lip service or advertising to the contrary will change this. If an organiza- tion's culture is its value system as manifested in organiza- tional behavior, what is a quality culture? There is a lot of finger pointing in organizations with a traditional culture. When problems occur, decision mak- ers and employees tend to expend more energy on deflect- ing or assigning blame than on identifying the root cause of the problem, which must occur before the problem can be solved. Traditional organizations suffer from the "most valuable player (MVP)" syndrome, in which problem solv- ing is viewed as an individual undertaking wherein inde- pendent "heroes operating all alone jump into the breach to put things right just in the nick of time. At best, this ap- proach is erratic. Another phenomenon that occurs in traditional cul- tures is the "waiting game." With this strategy, decision makers hold back until someone appears to have the prob- lem almost solved; then they jump on board and act as if the idea was theirs all along. Such an approach encourages manipulation and subterfuge rather than innovation and creative thinking. When difficulties occur in organizations with a qual- ity culture, the focus is on identifying and isolating the root cause so that the problem, and not just its symptoms, can be eliminated. Problem solving is typically a systematic process undertaken by teams, with input solicited from all stake- holders. The goal is to create solutions, not "heroes." A quality culture is an organizational value system results in an environment that is conducive to the estab- likely to be world-class competitors. . Business environment - Organizational values lishment and continual improvement of quality: It consists of values, traditions, procedures, and expectations that promote quality. ment and a sustained effort at all levels of the organization. . Cultural role models . Organizational rites, rituals, and customs . Cultural transmitters the charade at another organization. How do you recognize an organization with a quality culture? It is actually easier to recognize a quality culture than to define one. Organizations with a quality culture, QUALITY CULTURE VERSUS regardless of the products or services they provide, share a TRADITIONAL CULTURES number of common characteristics, presented in Figure 6.1. The business environment in which an organiza- tion must operate is a critical determinant of its culture. Organizations that operate in a highly competitive business environment that changes rapidly and continually are likely How Are Organizational Cultures Created? to develop a change-oriented culture. Organizations that op- erate in a stable market in which competition is limited may develop a don't-rock-the-boat culture. Organizational values descrihe whar the organization thinks is important. Adherence to these values is synony. mous with success. Consequently, an organization's values are the heart and soul of its culture. Cultural role models are employees at any level who personify the organization's values. When cultural role mod- els retire or die, they typically become legends in their orga- nizations. While still active, they serve as living examples of what the organization wants its employees to be. In an organization with a quality culture, the core of the operating philosophy is customer satisfaction. Quality organizations focus on doing what is necessary to exceed the reasonable expectations of customers. Such an approach Organizations that develop and maintain a quality culture can lower profits in the short run but is the key to long- will differ significantly from those with a traditional culture. term survival and prosperity. For example, making a major The differences will be most noticeable in the following areas investment in an expensive technology upgrade can cause the next quarter's profit-and-loss statement to be flat. Over time, however, the benefits of the new technology will take hold and will be reflected in profit-and-loss statements for years to come. Organizations that adopt a quality culture typically have less turnover at the top. This is because such a philosophy encourages decision makers to stay in their positions long enough to either enjoy or suffer the conse- Many factors contribute to the creation of an organization's culture. The value systems of executive-level decision makers are often reflected in their organization's culture. How manag- ers treat employees and how employees at all levels interact on a personal basis also contribute to the organizational culture. Expectations are important determinants of organizational culture. What management expects of employees and what employees, in turn, expect of management both contribute to an organization's culture. The stories passed along from • Operating philosophy . Objectives . Management approach - Attitude toward customers . Problem-solving approach . Supplier relationships . Performance-improvement approach quences of their decisions. Supplier Relationships In organizations with a traditional culture, suppliers are kept at armis length in relationships that are often adversarial. The maximum possible pressure is exerted on suppliers to bring down prices and speed up delivery, even when such an approach is likely to drive the supplier out of business. In organizations with a quality culture, suppliers are viewed as partners. Supplier and customers work together cooper- atively for the good of both. Each gets to know the other's processes, problems, strengths, and weaknesses, and they collaborate, using this information to continually improve the relationship and the performance of both. Objectives - Behavior matches slogars. L Customer input is actively sought and used to continually improve quality. L Employees are both involved and empowered. Work is done in teams. Organizations with traditional cultures typically adopt short-term objectives. The focus is on what the organization should accomplish over the next several weeks and months. Organizations that adopt a quality culture plan strategically. They develop both long- and short-term objectives, and they do so within the context of an organizational vision. - Executive-level managers are both committed and involved; responsibility for quality is NOT delegated. Sufficient resources are made available where and when they are needed to Management Approach ensure the continuous improvement of quality - Education and training are provided to ensure that employees at all levels have the knowledge and skils needed to continuously improve quality. Reward and promotion systems are based on contributions to the continual improvement of quality. Fellow employees are viewed as internal customers. In organizations with traditional cultures, managers think and employees do. In fact, employees don't just do; they do Performance-Improvement Approach what they are told. Managers are seen as "bosses" who give orders and enforce policies, procedures, and rules. In orga- nizations with quality cultures, managers are seen as coaches of the team. They communicate the vision, mission, and goals; provide resources; remove barriers; seek employee input and feedback; build trust; provide training and reward and recognize performance. In organizations with a traditional culture, performance im- provement is an erratic, reactive undertaking that is typically triggered by problems. In organizations with a quality cul ture, continual improvement of processes, people, products, the working environment, and every other factor that affects performance is at the very core of the operating philosophy. - Suppliers are treated as partners - Peak performance of people, processes, and products is a top priority. FIGURE 6.1 Characteristics Shared by Organizations with a Quality Culture.