David Spong

Leading Organizations to Achieve:

Performance ExcellenceInspiring People to Take Actions for Success

David SpongPresident, Boeing Aerospace Support (Retired)

1998/2003 Baldrige Recipient

2

3

1991 – 2000

BoeingAirlift & Tanker

Programs

1998 Baldrige Winner

2000 to 2004

BoeingAerospace Support

2003 Baldrige Winner

Our Quality Journey

4

Starting PointsAirlift & Tanker

Programs 1998 Recipient

Organizational Type

Organizational Complexity

Starting PointCrisis

Documented ProcessesFrameworkInitiativesLocations

Reason for Baldrige

Approach to Baldrige

Aerospace Support2003 Recipient

Overall business model

Dispersed – 130+locations

Improvement

Service

Complex:Bus./Sites/Functions

Some

Yes

Some

Stable

Not recognized

Integrating existing approaches

Primarily one

Turnaround

Manufacturing

Primarily one program

No

None

Many

Chaos

Yes

5

40 and No More …Unless We Perform1992

Lack ofConfidence

QualityProblems

Late DeliveriesAdversarialRelationships

Cost Overruns

From Crisis to Success

6

40 and No More …Unless We Perform1992

Lack ofConfidence

QualityProblems

Late DeliveriesAdversarialRelationships

Cost Overruns

National QualityAward Winners1998

From Crisis to Success

7

“The Law of Change”

If you want a different outcome, you must change either the process, the product, or both.

The Corollary

If you always do what you have always done you will get what you have always gotten!

The Law

8

90

60

30

0

-90

-120

-150

-180

-30

-60

Day

s

120

AircraftP30P5 P10 P15 P20 P25 P35

1993 19941992 1995 1996 1997

P40

1998

P45

“Hold the Aircraft”

P50 P55

150

180

P60

20001999

Cultural Change

9

PlannedJourney

(’93) (Summer ’95)

1000 UnalignedProjects

(’91)

Strategic Direction

Work Group

Individual

Tactical Direction

Malcolm BaldrigePrinciples

Aligning the Focus

10

Airlift& TankerAirlift& Tanker

On-SiteCustomerOversight

On-SiteCustomerOversight

External CustomerExternal Customer

One Team Committed to Program ExcellenceOne Team Committed to Program Excellence

Reinvented Relationships with Customers

11

RelationshipExcellence

PerformanceExcellence

Customer Satisfaction Model

Customer Satisfaction

(Quality + Cost + Schedule) + Relationship = Satisfaction

12

Quality Timeliness

Efficiency Cycle Time

AN APPROACH TO. . .

• Cover everything we do

• Manage and improve through a single, disciplined approach

• Empower Owners

1.0 Enterprise Management

8.0 Support and Services

4.03.02.0 7.06.05.0

Program Core Process Family

Process Based Management

Closed Loop

321 4 5 6 7

Process Management

13

90

80

70

60

50

40

30

20

10

0Quality vs. cost Quality vs. schedule Schedule vs. cost

Perc

ent o

f em

ploy

ees

sele

ctin

g on

epr

iorit

y ov

er a

noth

er

100 1998 - 88%1999 - 95%2000 - 90%2001 - 93%

Percentageof Respondents

7370 70 72

2730 30 28

33 35 35 36

68 67 6568

32 3335

32

67 65 65 64

Employees Believe in Quality

14

Airlift & Tanker Improvements

200

300

400450

500550

600

0

100

200

300

400

500

600

700

1992 1993 1994 1995 1996 1997 1998

Bald

rige

Mid

-Ran

ge S

core

TQMS-IE Cal Qual MB

400 Points!

15

How Good You Think You Are

How GoodOthersThink YouAre

12

3

“Projects are most successful when top management takes ownership”

– Deming

Leadership Required

16

The Journey to a Zealot

1991… 1996…

John McDonnellCEO

Harry StonecipherCEO

LaunchedTQMS-IE

“Go For It”MBNQA

Baldrige Internal Assessment (TQMS-IE) … Tied to Exec Compensation … At each Business Unit

17

1991… 1996…

John McDonnellCEO

Harry StonecipherCEO

And Beyond

The Journey to a Zealot

LaunchedTQMS-IE

“Go For It”MBNQA

Baldrige Internal Assessment (TQMS-IE) … Tied to Exec Compensation … At each Business Unit

1998…

Award Ceremony

18

• Baldrige winning organizations have great cultures:– Collaborative

– Integrated

– Aligned

– Sharing

– Trusting

– Caring

• There are no ”Silver Bullets”

18

Observations

19

Accepted a New Job in 11/2000!

20

1991 – 2000

BoeingAirlift & Tanker

Programs

1998 Baldrige Winner

Our Quality Journey

2000 to 2004

BoeingAerospace Support

2003 Baldrige Winner

21

The Leader’s Role

Engines

Steering Communications Navigation Catering Entertainm

ent

Captain

The “Leader”

ManagementSet of processes used to keep people and technology running smoothly

LeadershipSet of processes that creates/adapts organizations to significantly change them

Uncharted Waters

22

Leadership Communication

The first time you say something, it’s heard

The second time it’s recognized

And the third time, it’s learned

William H Rastetter, CEO, Idec Pharmaceuticals Corp.

Relentless Repetition!

23

Culture – A Set of Shared Vision/Values/Beliefs/Goals

CorporateCitizen

Innovation

Teamwork

Agility

Sharing &Supportive

Learning

Diversity

Quality

CustomerSatisfaction

Integrity

StakeholderRequirements& Expectations

Safety

The Organization

Shared Value Filter

The Leader establishes the culture to be shared by his/her behavior

24

State of the Inherited Leadership Team

• Prior Leader Autocratic

• Un-empowered

• Dispirited/untrusting

• Mostly Non-believers

• Did not understand my Leadership style

25

I Did All the Usual Stuff!• Met with each member of the Leadership Team

• Met with the Customers

• Held meetings with the People

• Tried to understand the Business

Launched Continuous Improvement!PLUS

26

Plus!

• Personal Commitment• Knowledgeable• Staffed BE Office with:

•Believers•Experts•Consultants

• Lot’s of personal time• Dealt with non-believers

Consistent & Persistent with Passion

27

BusinessExcellenceDebbie Collard

Business Excellence Office

Businesses

FunctionsSites

Initiatives Deployment

AS

Business Excellence OrganizationReporting to the Office of the President

28

• 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

Operating Principles

Have Fun. . . Enjoy the journey and each other

29

Spong

SLT

Bus & Site LT’s

All the way to the people who do real work!

Convert Direct Reports

30

A person who believes that using the

Malcolm Baldrige Criteria will drive an

organization to achieve world class

business results…

…and will lead their organization

in its use

Definition of a Zealot

31

“Conversion” to Zealots

Let’s use our future leaders!

Percent

0

20

40

60

80

100

Day 1 The Journey

“Sign on”(10)

“OMDB”(0)

We’reFrom Missouri

“Show Me”(compliant)(5)”

+5.8

Day N

Bye Bye !(0)

Zealots (10)(commitment)

32

• 2x4’s ?

• Leadership Passion ?

• Start the Journey ?

• Have a Plan ?

• Get Trained ? • Quest for Excellence ?• Positive Results ?• Go for an award

Yes to all of the above, except no 2x4’s and especially go for an award to get Feedback

How best to achieve conversion to Zealots

Employee Involvement (EI) Is it a Culture?

Is it a Belief?

Is it a Way of Life?"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

Is it Teams?

Is it Belonging?

Is it a Process?

34

Leadership Drives the Employee Satisfaction Index

Leadership Effectiveness Deciles

10987654321

ES

I Per

cent

Pos

itive

90

80

70

60

50

40

30

78

7371

6662

6058

52

47

39

Poor Leadership Results in Low Satisfaction

Great Leadership Results in Top Quartile Satisfaction

Good Leadership Results in Okay Satisfaction

35

Executive Champion Requirements

• Learn & understand the criteria for your assigned element

• Identify needed improvements

• Work with Business Excellence Office to drive improvements

• Communicate throughout the organization

• Champion world-class approaches & lead by example

• Make a personal commitment to the Leadership Team for the

improvement of your element

36

• Not a Business Performance Review• Business Model• Internal Assessment• Gaps• Process to close gaps• Progress

Focused Offsites

37

Focused SurveyIDS– 58 Questions–1 Narrative question

– Results to only the Business,Function, Department? Level

– Results not actionable

Aerospace Support– 58 Questions– 3 Narrative questions

+ – 28 Focused questions

– Results to the Business, Program,Function, Site, to the manager levelwith 5 or more D/R

– Results actionableSummary for 17 key issuesExec summaries for each Bus,Site, & Function

38

0100

200

300

400

500

600

700

2001 20032002

AS Baldrige-based Assessment ScoreState/Local/Baldrige-based Score by Major SiteAward Recipient

Bald

rige

Mid

-Ran

ge S

core

Phila

delp

hia

Okl

ahom

a C

ity

St L

Wic

hita BA

L

Mes

a

So C

al

Ft W

alto

n Be

ach

BASC

Aero

spac

e Su

ppor

t Bal

drig

e W

in

400 Points!

Okl

ahom

a C

ity BASC

BASC

Aerospace Support Improvements

39

We Did It Again!

40

Boeing Aerospace Support’sRevenue Performance

2000 2001 2002 2003

PLAN ACTUALS AVG GROWTH

Started Baldrige

41

Boeing Aerospace Support’sEarnings Performance

2000 2001 2002 2003

PLAN ACTUALS

Started Baldrige

42

50%

50

54

58

62

66

1999 2000 2002 20032001

EI

ESIStarted Baldrige

Boeing Aerospace Support’sEmployees are more Motivated

43

Summary

44

Don’t study it long – Don’t change it! – Just Do it!

CC40170002.ppt

Summary

45

The Making of a World-Class OrganizationE. David Spong and Debbie J. Collard

Using a unique blend of stories, tips, charts, and tables that can be adapted to any organization, this book shares the stories, wisdom, and “silver bullets” gained by two divisions of the Boeing Corporation as they won the Malcolm Baldrige Quality Award. The “silver bullets” are the kernels of management wisdom that set this book apart and provide the simple insights that anyone can adopt. This book uses a systems perspective to provide solutions that will inspire leaders to champion such approaches, while also providing tried and true details and “how-to” applications to the in-house practitioners and consultants. Whether you are looking for tools and techniques to make your organization and processes more effective, or you are starting from scratch, this book provides you with a set of proven approaches to achieving excellence. The insights into excellence and the Baldrige journey that Spong and Collard have mastered have allowed their organizations to celebrate with great processes, loyal customers, engaged employees, high quality products and services, and significant profitability.

Where Do You Go from Here ?

46

QUESTIONS?

Thank You for Listening