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A JOURNEY TO EXCELLENCE IN TWO ORGANIZATIONS David Spong

A JOURNEY TO EXCELLENCE IN TWO ORGANIZATIONS David Spong. WHY AM I HERE?. MAYBE OUR APPROACH WORKS?. OUR QUALITY JOURNEY. 1991 – 2000 Boeing Airlift & Tanker Programs 1998 Baldrige Winner. 2000 to 2004 Boeing Aerospace Support 2003 Baldrige Winner. STARTING POINTS. Aerospace Support

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A JOURNEY TO EXCELLENCE IN TWO ORGANIZATIONS David Spong

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  1. A JOURNEY TO EXCELLENCE IN TWO ORGANIZATIONS David Spong

  2. WHY AM I HERE? MAYBE OUR APPROACH WORKS?

  3. OUR QUALITY JOURNEY 1991 – 2000 BoeingAirlift & Tanker Programs 1998 Baldrige Winner 2000 to 2004 BoeingAerospace Support 2003 Baldrige Winner

  4. STARTING POINTS Aerospace Support 2003 Recipient Manufacturing Service Primarily one program Complex: Bus./Sites/Functions Chaos Stable Yes Not recognized No Some None Yes Many Some Dispersed – 130+ locations Primarily one Turnaround Improvement Integrating existing approaches Overall business model

  5. Office of the Chairman Chairman Phil Condit President Harry Stonecipher Commercial Airplane Phantom Works People Space and Communications Military Aircraft & Missiles Airlift & Tanker Programs THE BOEING COMPANY

  6. AIRLIFT AND TANKER PROGRAMS LOCATIONS Manufacturing Organization Headquartered in Long Beach, CA 8,106 Employees in 7 States

  7. Quality Problems Lack of Confidence Cost Overruns Adversarial Relationships Late Deliveries 40 and No More … Unless We Perform 1992 FROM CRISIS TO SUCCESS

  8. Quality Problems Lack of Confidence Cost Overruns Adversarial Relationships Late Deliveries 40 and No More … Unless We Perform 1992 National Quality Award Winners 1998 FROM CRISIS TO SUCCESS

  9. The Law If you always do what you have always done you will get what you have always gotten! The Corollary If you want a different outcome, you must change either the process, the product, or both. “THE LAW OF CHANGE”

  10. ALIGNING THE FOCUS Tactical Direction Strategic Direction Work Group Individual (’91) (’93) (Summer ’95) Planned Journey 1000 Unaligned Projects Malcolm Baldrige Principles

  11. REINVENTED RELATIONSHIPS WITH CUSTOMERS On-Site Customer Oversight Airlift & Tanker External Customer One Team Committed to Program Excellence

  12. UNDERSTANDING CUSTOMER SATISFACTION CUSTOMER SATISFACTION Product and service excellence Relationship excellence • High quality, on time, at cost • Meet customer expectations • Timely and competent support • Anticipate demands • Sensitive to customer’s point of view • Understand customer expectations • Responsive to customer requests • Keep our commitments Delivering what the customer wants—flawlessly

  13. 1.0 Enterprise Management Program Core Process Family 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Support and Services Process Based Management 1 2 3 4 5 6 7 Closed Loop Quality Timeliness Efficiency Cycle Time PROCESS MANAGEMENT AN APPROACH TO. . . • Cover everything we do • Manage and improve through a single, disciplined approach • Empower Owners

  14. “Hold the Aircraft” CULTURAL CHANGE 1992 1993 1994 1995 1996 1997 1998 1999 2000 180 150 120 90 60 30 Days 0 -30 -60 -90 -120 -150 -180 P5 P10 P15 P20 P25 P30 P35 P40 P45 P50 P55 P60 Aircraft

  15. EMPLOYEES BELIEVE IN QUALITY Percentage of Respondents 100 1998 - 88% 1999 - 95% 2000 - 90% 2001 - 93% 90 80 73 72 70 70 70 68 68 67 67 65 65 65 64 60 Percent of employees selecting one priority over another 50 40 36 35 35 35 33 33 32 32 30 30 30 28 27 20 10 0 Quality vs. cost Quality vs. schedule Schedule vs. cost

  16. 700 600 500 400 300 200 100 0 AIRLIFT &TANKER IMPROVEMENTS 600 550 500 450 TQMS-IE Cal Qual MB 400 400 Points! Baldrige Mid-Range Score 300 200 1992 1993 1994 1995 1996 1997 1998

  17. “Projects are most successful when top management takes ownership” – Deming LEADERSHIP REQUIRED How Good Others Think You Are 3 2 1 How Good You Think You Are

  18. Launched TQMS-IE “Go For It” MBNQA Baldrige Internal Assessment (TQMS-IE) … Tied to Exec Compensation … At each Business Unit THE JOURNEY TO A ZEOLOT 1991… 1996… Harry Stonecipher CEO John McDonnell CEO

  19. 1998… Award Ceremony Launched TQMS-IE “Go For It” MBNQA Baldrige Internal Assessment (TQMS-IE) … Tied to Exec Compensation … At each Business Unit THE JOURNEY TO A ZEOLOT 1991… 1996… Harry Stonecipher CEO John McDonnell CEO And Beyond

  20. OUR QUALITY JOURNEY 1991 – 2000 BoeingAirlift & Tanker Programs 1998 Baldrige Winner 2000 to 2004 BoeingAerospace Support 2003 Baldrige Winner

  21. Integrated Defense Systems Integrated Defense Systems Commercial Airplanes Boeing Capital Air Force Systems Army Systems Naval Systems Air Traffic Management Connexion By Boeing Phantom Works Shared Systems Group Aerospace Support Integrated Defense Adv Systems Homeland Security and Services Space and Intelligence Systems NASA Systems Missile Defense Systems Strategic Architecture ORGANIZATIONAL ALIGNMENT The Boeing Company Aerospace Support

  22. STARTING POINTS Aerospace Support 2003 Recipient Manufacturing Service Primarily one program Complex: Bus./Sites/Functions Chaos Stable Yes Not recognized No Some None Yes Many Some Dispersed – 130+ locations Primarily one Turnaround Improvement Integrating existing approaches Overall business model

  23. Japan Malaysia Kuwait TheNetherlands Saudi Arabia UnitedKingdom Germany AEROSPACE SUPPORT PRESENCE 12,303 Employees in 131 Locations

  24. Running the Business Growing the Business DUAL BUSINESS IMPERITIVE Aerospace Support is a fairly new organization with a focus on both running and growing the business

  25. INITIAL FOCUS • Created a Leadership System and Operating Principles • Identified and Deployed Overall Initiatives • Employee Involvement • Process Based Management • Management by Information • Assigned Executive Champions • Adopted Baldrige Criteria as the Business Model • Assessed the organization by sites and overall • Customer Satisfaction • Enterprise Planning Process Established a culture of excellence and continuous improvement

  26. OUR LEADERSHIP SYSTEM Set and Communicate Direction Continuously Improve Be Role Models Vision & Values Integrity Learning Organizational & Employee Learning Quality Corporate Citizen Stakeholder Requirements & Expectations Organize, Plan, and Align • Customer • Work force • Suppliers • Community • Shareholders INVOLVE AND COMMUNICATE Diversity Teamwork Safety Motivate Employees Empower Teams Sharing & Supportive Innovation Customer Satisfaction Agility Reward & Recognize Perform to Plan Analyze & Compare

  27. OUR MISSION, VISION, AND VALUES Values Leadership Integrity Quality Customer satisfaction People working together A diverse & involved team Good corporate citizenship Enhancing shareholdervalue Mission Provide world-class sustainment solutions to our aerospace customers Vision People working together as the world’s number one provider of innovative sustainment solutions 10 Year Objective We will be a recognized world-class, global business, providing sustainment solutions aligned with our customers’ evolving needs

  28. OPERATING PRINCIPLES • We insist on integrity, first and foremost • We tell it like it is • We communicate openly and candidly in all our dealings • We respect, honor, and trust one another • We work toward consensus • Disagreement is healthy and encouraged, but once a decision is made,we proactively support it • We have one conversation at a time • Our silence is consent • We focus on issues and ideas rather than titles or personalities • We actively listen and question to understand • We do not attack the messenger • We identify clear objectives and expectations for our meetings • We start on time, observe time limits, and end on time • We praise in public, we coach in private • We have a bias for velocity Have Fun. . . Enjoy the journey and each other

  29. EMPLOYEE INVOLVEMENT (EI) • Is it a Culture? • Is it a Belief? • Is it a Way of Life? • Is it Teams? • Is it Belonging? • Is it a Process? "It is not a new program, project or process. EI is a cultural change in the way we treat each other and work together. It is a journey in which people apply their skills to improve individual, team and organizational performance continuously. This leads to employee satisfaction and improved business results.“ Raj Kanungo

  30. Motivated Employees “Smells Good” Business Results “Taste Great” Recognition Ethics Operating Principles Diversity “Open Door” Empowerment Employee Involvement Vision & Values EMPLOYEE INVOLVEMENT LEADS TO MOTIVATED EMPLOYEES

  31. EMPLOYEES ARE MORE MOTIVATED Started Baldrige 66 ESI 62 EI 50% 58 54 50 2003 2001 2002 1999 2000

  32. Business Results Business Results Process Management HR Focus Data and Information Management Customer and Market Focus Strategic Planning Leadership BALDRIGE AS OUR BUSINESS MODEL

  33. 1 4 5 6 8 7 3 9 2 13 10 11 12 APPROACH Improvement Initiatives Baldrige Award! Deployed Needed Approaches Assigned People To Lead Approaches Site Visit National Baldrige Application Prepared AS-wide Assessment Document Internal Assessment & Feedback Assigned Executive Champions Internal Assessment & Feedback Received Awards in : Kansas Missouri Arizona Australia California Florida Oklahoma Macro-level Internal Assessment Tasked Sites To Submit State Award Applications Created a Business Excellence Organization 2003 2002 2000 2001

  34. AEROSPACE SUPPORT IMPROVEMENTS 700 AS Baldrige-based Assessment Score State/Local/Baldrige-based Score by Major Site Award Recipient BAL St L 600 Wichita So Cal 500 Aerospace Support Baldrige Win Ft Walton Beach Mesa Oklahoma City 400 Baldrige Mid-Range Score BASC 300 400 Points! Philadelphia 200 Oklahoma City 0 100 2001 2002 2003

  35. AS EARNINGS PERFORMANCE Started Baldrige 2000 2001 2002 2003 PLAN ACTUALS

  36. AS REVENUE PERFORMANCE Started Baldrige 2000 2001 2002 2003 PLAN ACTUALS AVG GROWTH

  37. WHAT DOES BALDRIGE DO FOR YOU? • Ensures continuous improvement Across the Board • “Forces” a collaborative enterprise • Common language • Integration between Businesses, Sites & Functions • Knowledge Sharing • Common processes, where appropriate • Motivates employees • Enables “breakthrough” improvements • Improves business results

  38. LEADERSHIP COMMITMENT AND LESSONS LEARNED • Develop vision & values and a system for leading • Accept & actively support change • Align vision, strategies, goals, and measures • Institutionalize priorities of Quality, Schedule and Cost • Reinvent relationships with all stakeholder groups: • Understand customers & commit to customer satisfaction • Empower teams to optimize results • Manage through systematic processes • Assess the organization using the MB Criteria Leadership Commitment in All Things

  39. OUR JOURNEY CONTINUES It starts with leadership Great people keep it going!

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