Hart Crowser Total Value Management

General TVM Principles

THE INSTITUTE FOR QUALITY SERVICE

1

HART CROWSER

GENERAL TVM PRINCIPLES

INTRODUCTION Senior Management team member

TRAINING EXPECTATIONS John Inman

EVENTS AND OPPORTUNITIES LEADING TO TRAINING

Vision and application of vision of Hart Crowser as an organization with a value based work

environment are inconsistent person to person, team to team, location to location.

Inconsistent focus of team members in Hart Crowser, person to person, team to team, location to

location.

Understanding of what value added service is differs from team member to team member as well

as differences in understanding what internal client service means to individual team members and

to Hart Crowser and its external clients.

Thoughts:

Provide Road-Map:

Interactive format (Non-Lecture):

Unconscious-competence to Conscious-competence:

Thoughts:



2

OBJECTIVES

By end of session:

John Inman's Objectives -

1) Every team member will share a common vision of the Hart Crowser value added work culture.

2) We will have created a better understanding of each other and each other's commitment to

TVM at Hart Crowser.

3) We will all be committed to shared results of the TVM process.

4) We will share a common understanding of the TVM process and what is necessary of each of

us to ensure its success.

Group's Objectives -

1) A better understanding of Hart Crowser's definition of TVM and how to implement it in

projects, in all team member's daily jobs, and in the regions.

2) Knowledge of faster, better ways to do things; plus opportunity to contribute ideas.

3) External input to show me what I am doing right and what I am doing wrong.

4) Effective management.

5) Better communication skills.

6) How to constructively educate the technical staff about drafting issues which make/break

drafting budgets.

7) Be a better team player and understand the need for process vs. expediency.

8) How to address difficult/strained relations with internal clients.

9) For this workshop to improve my marketability - both external and internal.

10) To get excited about TVM and learn what its all about.

Thoughts:



3

THE GURUS OF QUALITY

An overview of Deming, Juran, Crosby, and Taguchi

Dr. W. Edwards Deming - Setting The Standard For over 40 years, Dr. W. Edwards Deming has set the pace for the world-wide pursuit of quality in

products and service. His international practice of quality consultation includes railways,

telecommunications companies, census methods, hospitals, legal firms, government agencies, research

organizations, and many and varied manufacturing and service-oriented organizations.

Deming initially gained widespread acceptance in the early 1950's, when he traveled to Japan in the

aftermath of World War II, and helped industry rebuild after a devastating war. Many credit much of

Japan's industrial turnaround and phenomenal success to the quality principles Deming brought to Japan.

Since that time, Deming's accomplishments have reached extraordinary proportions. He has received

numerous science, technology, and engineering awards and recognition, been awarded honorary doctorates

from many distinguished universities, authored several books and published 170 papers, is a Distinguished

Lecturer for several universities, and has received awards of national and international recognition.

Deming may be best known as the namesake for the Deming Prize, an award developed by Japanese

manufacturers in 1951, and now an internationally coveted quality award signifying commitment to and

accomplishment of excellence in all aspects of organizational performance. In 1987, the President of the

United States awarded Deming with the National Medal of Technology.

A statistician with a Ph.D. from Yale, Deming built on statistical theories of quality control to transform

business so that goods and services could be produced and delivered in a highly quality conscious, client-

oriented manner. He developed a 14 point philosophy of management responsibility and quality assurance,

asserting that quality should be built into the processes rather than a result of inspection, detection, and

correction.

Industries around the world are paying attention to the Deming philosophy. The pentagon has tried to use

his ideas. The new General Motors Co. Saturn plant has been built with elements of Deming's philosophy

as a management foundation. Not everyone accepts every aspect of “the Deming way,” but the basics are

attracting a wide following.

What are those basics? First and foremost, there is the commitment to quality. Other aspects of the

philosophy include the following:

· Constant commitment to improvement

· A focus on behavioral issues such as leadership through action

· Positive environment, reinforcement, and reward systems

· Concentration on error prevention rather that detection

· Total involvement at all levels of management, production, and service delivery

· An obsession with, and constant attention to client needs



4

In meeting the needs of the client, Deming states, “Be obsessed with your clients' needs. And, the way that

works is the people who report to me are my internal clients. The people who report to them are their

internal clients. If something goes wrong, you don't attack the person, you attack the process, and if you

constantly attack the process, the people will help.”

By creating an environment where clients come first, internally and externally, Deming philosophy-centered

organizations discover how to maximize productivity, lead their industries in quality, make profits soar, and

have a happy, satisfied work-force all at the same time.

What did Deming teach the Japanese, which took them in one generation from a reputation of producing

shoddiness in mass quantities to the world leader in high tech and industrial quality? He taught them that

incorporating principles of quality puts an organization in a unique position of satisfying the demands of the

public, who will respond by demanding more product.

Deming's basic philosophy is that quality improves as variability decreases. To monitor variance, he

advocated a statistical method of quality control. That is, instead of inspecting products en masse for

defects after they have been produced, companies should strive for continuous improvement using statistical

methods and analysis to maintain quality.

Here's how it works. Analysts sample products during manufacturing to determine the product's deviation

from an accepted range. As the deviations are detected, the causes for the deviations are determined, and

systematically eliminated until the target is attained every time.

As Deming sees it, any deviation is the result of one of two kinds of variables - either a “special cause,”

stemming from fleeting random events, or a “common cause,” arising from faults in the system. Based on

his experience, special causes account for only 6% of all deviations, and 94% can be traced to common

causes. Deming's studies show that most companies spend too much time trying to determine the nature of

special cases rather than examining the system to discover the source of the common causes. Deming lays

the blame for these system-related problems directly on management - not the workers. Quite critical of

traditional American corporate management, he says the vast majority of problems are eliminated if

management takes responsibility for them and creates the right system for creating defect-free products.

Deming also advocates determining what the clients want before making a product, and taught the Japanese

how to conduct client surveys. John Langley, a professor of marketing and logistics at the University of

Tennessee, says, “A central theme (of Deming's work) is the focus on client satisfaction. He repeatedly

underscores the importance of determining who the clients are and what their needs are, then developing

strategies to meet those needs.”

THE OTHER QUALITY GURUS

Joseph Juran - Focus On The Basics Joseph Juran also traveled to Japan after World War II, and his ideas of implementing quality programs

were also warmly received by Japanese business. Like Deming, Juran strongly emphasizes the role of

management in the development of quality processes and systems.



5

For Juran, quality means fitness to serve, and has two basic attributes - 1) quality consists of those product

or service features which meet clients' needs, and 2) quality means freedom from deficiencies. He says the

client needs and expectations should be translated into operational measurements, and incorporated into the

process of product manufacturing and service delivery. Quality, he says, should be ranked alongside

financial considerations as an equal business objective.

To effect the desired changes, according to Juran, corporate executives must stress three managerial

processes, known as the “Juran Trilogy.”

1. Planning - Identifying clients, and their needs.

2. Control - Evaluating performance, comparing to company goals, acting on the differences.

3. Improvement - Upper management making quality a cornerstone of its business plan.

Philip B. Crosby - Doing The Job Right Crosby may be the best known quality guru, possibly because the emphasis is less on statistical analysis,

and more on what many consider common sense principles. He is also recognized as more motivational and

inspirational than other quality advocates.

Crosby is well known for famous business maxims such as “Quality is free,” and “Do it right the first time.”

He says that quality is achieved when you don't have to keep doing things over in order to get it right. To

accomplish that directive, management first must set the requirements, then supply the wherewithal for

employees to meet them, and finally encourage and help employees in that pursuit.

He refutes the idea that quality costs more money. Establishing systems that create quality the first time,

and teaching employees to do things right the first time is a money saver - not a business expense, especially

in the long run. Crosby's performance standard is “zero defects,” meaning no variations from the

requirements. Teach the employees, and keep management from placing obstacles in their way. He calls

quality improvement a process, not a program, adding “A process is never finished and requires constant

attention.”

Genichi Taguchi - An Emphasis On Design Quickly gaining in prominence is the fourth guru of quality - Genichi Taguchi. A 1960 Deming Award

winner in Japan, Taguchi became a consultant who takes issue with the concept of “Zero defects.” “Quality

is a virtue of design. The robustness of products is more a function of good design than on-line control,

however stringent, of manufacturing processes,” says Taguchi.

Taguchi contends that rather than establishing acceptable deviations from target, companies should

concentrate on hitting the target every time. The more a company deviates from targets the greater is losses

will be. He quantified this loss with a formula known as the “Quality Loss Function,” which calculates the

production cost plus quality loss.

Management should choose the precision level for a product that minimizes the total cost. On target, the

production should continue without adjustment. Outside the limit, the process should be adjusted before

production continues, Taguchi advocates.



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DETECTION VS. PREVENTION

Organizations that are moving into the world class arena understand that to compete in a world economy,

they must produce high value low cost products and services for their clients. To do this it is critical to

move from a philosophy of Detection to one of Prevention which leads into continuous improvement.

DETECTION SYSTEM As shown in the model below, in the Detection system once the product or service is produced, it is then

inspected to determine whether or not to ship, scrap, or rework. This is the traditional manufacturing

method used by most firms in the United States. The major problem with the system is the extremely high

cost of the system. Scrap and rework can easily amount to 33% of the cost of the product. This is a very

expensive luxury we no longer can afford if we are to be competitive in a world marketplace.

OPERATION

Does itmeet

specifications

OUTPUTDeliver

product orservice

IF YES

INPUT TAKE SAMPLE

Re-examine

or re-sample

Does itmeet

specifications

SCRAP

REWORK

WILL IT BE

BOUGHT

OFF?NO NO

NO

YESYES

MAN

MACHINERY

MATERIALS

METHODS

ENVIRONMENT

DETECTION SYSTEM



7

PREVENTION SYSTEM The Prevention System has some obvious advantages. First, it does a much better job of ensuring that the

client receives a product or service they desire. Second, the costs of producing bad products, inspecting for

defects, scrap and rework are reduced.

Probably the most important advantage of the Prevention System is that it moves an organization towards

continuous improvement. In the model below, Statistical Process Control is used to analyze the process

and make improvements so that the process can be continuously improved.

OPERATION

Deliverproduct or

serviceOUTPUT

INPUT

MAN

MACHINERY

MATERIALS

METHODS

ENVIRONMENT

PREVENTION SYSTEM

TAKE DATA AND

ANALYZE

AGAINST TARGET

TO MAKE

IMPROVEMENTS

TO THE PROCESS

REDUCE

VARIABILITY

SPC



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VALUE

Unfortunately, adding value is a very misunderstood concept. It is not adding cost to make a service or

product look better; it is the added value we personally bring into our relationships by adding integrity and a

true desire to serve. We add integrity by reducing the factors or behaviors that prevent us from hitting our

targets, or we add resources to help us hit our targets.

GROUP EXERCISE

As a group in a facilitated discussion, discuss value and what it means and how it relates to how we do

business at Hart Crowser.

OVERVIEW OF TVM

A CULTURE THAT RECOGNIZES QUALITY AS THE PRESENCE OF VALUE, RATHER THAN JUST THE

ABSENCE OF DEFECTS

A SYSTEM WHERE VALUE IS DEFINED BY THE FIRM'S USEFULNESS TO A CLIENT, NOT JUST TIME

EXPENDED

A SYSTEM WHERE VALUE IS MEASURED BY CLIENT SATISFACTION, CLIENT LOYALTY, REPEAT

BUSINESS, AND REFERRALS, WHICH MAINTAIN THE CORPORATION'S MARKET SHARE AND ENSURE

OUR FINANCIAL SUCCESS

A BELIEF THAT HART CROWSER'S SUCCESS IS BASED ON RECOGNIZING THAT CLIENTS INCLUDE BOTH

EXTERNAL CLIENTS AS WELL AS INTERNAL STAFF

A WORKING ENVIRONMENT WHERE ALL EMPLOYEES PROMOTE CONTINUOUS VALUE IMPROVEMENT

STAFF WHO TAKE PERSONAL RESPONSIBILITY FOR ADDING VALUE THROUGH THEIR ACTIONS

(BEHAVIOR) AT ALL TIMES

STAFF WHO PRO-ACTIVELY SEEK AND PROMOTE PROFESSIONAL GROWTH THROUGH TRAINING, SELF-

IMPROVEMENT, AND EXPANDING OPPORTUNITIES

GROUP EXERCISE

As a group, discuss TVM to insure there is a common understanding of what TVM is and how it is going to

work in Hart Crowser

Thoughts:



9

Value Target

-3 -2 -1 0 1 2 3

68.26%

95.44%

99.73%

Let's use the analogy of basketball. If the object of the game is to win, one of the targets would be to make

100% of the shots through the basket. All factors that prevent the ball from going into the basket would be

considered variation around the target. There are then actions that can be taken to reduce that variation

such as training, practice of basics, strategy, values, vision, mission, a clear game plan, all of which will

help us focus on making the basket. The better we are at reducing the factors that prevent us from making

the basket, variability, the better we will be at improving the percentage of baskets made which will help us

win. A target is not a goal. A target is a permanent target to shoot for. A goal is like the rings on the

target; it marks improvement towards the bull's eye.



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FILTER

THROUGH

VALUE

TARGETS

EVERYDAY

DECISIONS

IS DECISION

MOVING ME

CLOSER TO

TARGETS?

REEVALUATE

DECISION,

DECIDE TO GO

AHEAD OR NOT

NO

IMPLEMENT

DECISION

YES

DO NOT

IMPLEMENT

DECISION

NO

YES

OBSERVE

RESULTS AND

ADJUST

ACTIONS AS

NEEDED TO

DRIVE TO

TARGETS

Value Target Decision Making Process



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VALUE TARGETS

1) 100% Client Satisfaction

Where client satisfaction -- the most important value target -- is defined as adding client-

perceived value to all relationships inside and outside the organization by meeting or

exceeding client expectations in a cost-effective manner. Value can be added by:

probing to determine client needs and expectations regarding scope, schedule, and cost;

negotiating agreement among the available options; and then ensuring that all

commitments are met.

2) Reward the Pursuit of the Best Interests of Hart Crowser as a Whole

Where the best interests of Hart Crowser are embodied in the Unifying Principles,

strategic direction, business plan, and budget, and recognizing and rewarding those who

promote the interest in the organization as a whole, rather than serve the self interest of

individuals, groups, divisions, or regional offices.

3) Eliminate Waste and Rework by Doing the Job Right the First Time

Where all team members take the appropriate amount of time to do the job right and

accept personal responsibility, and continuously seek and promote opportunities, for

eliminating waste and rework through sufficient planning and personal endeavor.

4) Make Decisions at the Lowest Responsible Level

Where delegation to the lowest responsible and appropriate level empowers individuals

and facilitates teamwork, participation, and ownership of the decisions being make.

5) Optimize Return on Investment

Where optimization of return on investment balances Hart Crowser's risks and rewards.

GROUP EXERCISE

Break into groups. Each group pick a decision, large or small, that has been made or could be made, then

discuss how that decision might be made by screening it through the value targets. Each group will then

share the process and results with the group as a whole.

Thoughts:



12

Process Improvement Exercise

Instructions:

Notes:



13

Value Council

The first step in establishing consistency in applying value improvement principles, is the formation of a

Value Council. The Value Council is an appointed steering body that oversees the value improvement

process and makes sure that all value efforts are focused and aligned with the value targets. The

membership of the Value Council will rotate every 6 months or so. Broad representation from all ranks of

the organization is critical to ensure team cooperation and support. As decisions are implemented by the

committee, higher levels of value will be achieved, and the team will witness an increase in commitment to

each other and to the team as a unit. The Value Council reports to John Crowser and recommendations

made by the Value Improvement Teams through the Value Council will be made to John Crowser and the

senior management team. Recommendations will be implemented on approval of John Crowser and the

senior management team.

The present composition of the value council is:

_ Greg Both _ Arlene Brooks _ Denise Brown

_ Linda Dahlin _ Bill Downs _ Garry Horvitz

_ Allen Jones _ Ken Kaufmann _ Jim Rybock

_ One representative from each region

To keep the team effective, it is best to limit full time council members to 10 people. It is not necessary to

have all team members be devote full time to team efforts. In fact, some Value Council members can even

be clients or suppliers. The key is to steer the process in the right direction.

Value Council's Role

_ Establish strategies for continuing improvement

_ Guide special project selection

_ Provide resources to support value improvement efforts

_ Remove road-blocks to value improvement efforts

_ Communicate and market the results of the Value Improvement Process

To guide the committee's actions and decisions, the following are necessary to ensure effectiveness of the

committee:

_ Clear Mission

_ Clear Vision

_ Clear Values

_ Clear Value Targets

_ Clear Objectives

_ Create measurements to gage progress toward targets

_ Clear boundaries over which the committee cannot extend

Thoughts:



14

VALUE ACTION TEAMS

A value action team is created to address a specific issue or problem. It has a clear mission and a clear

vision of its intended outcome. It is the responsibility of the team or Value Council to leader provide clear

parameters for the team to work within. An analogy for this might be a road-map to a destination. First, the

destination is specified. Then, costs, impassable roads, time limits and other factors that might limit or steer

the team are outlined. At this point, the value action team is given the responsibility and the authority to act

within the guidelines.

The team manager or Value Council should review and authorize whatever plans and/or solutions are

developed. An effective method is to provide the decision makers with a set of three alternatives, and a

recommended choice with a thorough explanation. Make sure that all questions, concerns, and options are

adequately explored. This makes it easier for a planned implementation to be justified.

A value action team can be formed at the direction of the department manager or Value Council, or it can

be the brain child of any member of the team. Any qualified team member can lead the value action team.

If a team is to be formed, it is critical to inform the department manager or Value Council of the intent to

form a team. Value action teams do take valuable resources, and it is critical to prioritize the mission of the

team relative to the other tasks at hand.

It is critical that we understand that in no way is the Value Council and Value Improvement Team to take

the place of decisions that can be effectively made and implemented at the lowest responsible level using

the Value Targets to screen the decisions through.

GROUP EXERCISE

As a group in a facilitated format, discuss the role of the value council, value improvement teams and your

role in Hart Crowsers value improvement process.

Thoughts:



15

VALUE

COUNCIL

SPECIAL

PROJECT

SELECTION

PROJECT

EVALUATION

IMPLEMENT

PROJECT

CONTINUOUS

IMPROVEMENT

STRATEGY

ASSIGNMENT TO

VALUE

IMPROVEMENT

TEAM

Special Project Value Improvement Process

Individuals

Suggest Projects

for Process

Improvement

Senior

Management

Team authorizes

project

SENIOR

MANAGEMENT TEAM

AUTHORIZES

IMPLEMENTATION

COMMUNICATE

PROGRESS TO

SENIOR

MANAGEMENT AND

TEAM MEMBERS



16

The success of the adoption of value added principles in Hart Crowser depends on all of us working on the

same agenda. We must have shared vision, shared values, and a shared set of assumptions on which we

base our actions and decisions. The process we will continuously go through is based on an underlying set

of assumptions. These assumptions are necessary for the process to work!

GROUP EXERCISE

Break into teams of 5 or 6 and discuss the underlying assumptions listed below. Where is your comfort

level with the assumptions? Do you agree? Do you disagree? Can you accept the foundation for the value

added work environment?

UNDERLYING ASSUMPTIONS (Key assumptions on which value improvement process is based)

a) A logical argument can be developed for any conclusion. To change the conclusion, the

underlying assumptions change.

b) If we have a desired result, there are not only components necessary to get that result, (the

content) there is a process or road map (the context) in which those components must be executed to

get the desired result. (Chemistry)

For example: In chemistry, if you have a desired result, it is not enough to define the chemicals

(content). The order, amounts and the way those chemicals are combined as well as the environment

for reaction (context) are critical to define if you hope to create the desired result.

c) TVM, more than anything else, is about driving to target by using the value targets as criteria for

all decisions made in the organization and then working to continuously improve the process. We

will turn these actions (behaviors) into the clear vision of what Hart Crowser looks like if we execute

and implement the necessary road map effectively.

d) Everyone in this room is highly dedicated, highly intelligent and is committed to fulfill Hart

Crowser's mission.

e) Confrontation is healthy if based on:

Accepting someone's point of view does not mean you agree with them. It means you allow the

space for differences. People have different points of view because they base their opinions on

different sets of assumptions. A point of view is not good or bad, just different. Healthy

confrontation, therefore, states "I accept your point of view. I have a different point of view."

Arguments occur when I say you are wrong.

Thoughts:



17

Underlying assumptions cont.

f) "If you always do what you have always done, you will always get what you always got." Larry

Wilson To expect a different result from the same behavior is a good definition of insanity.

g) I cannot change your beliefs or attitudes. I will not tell you that your beliefs will positively or

negatively affect the desired result you envision. What I will tell you is your expressed behaviors

have a profound affect on the desired result you envision.

h) You are totally responsible for the affects of your behaviors on those around you and totally

accountable to those around you for the affects of your behavior.

i) "What you are speaks so loudly I can't hear what you say." Emerson "You can't give away what

you don't own anymore than you can come from where you haven't been." Larry Wilson You must

model the behaviors discussed or the envisioned results "will not" materialize.

j) 90% of organizations that introduce a quality process fail in that introduction. They introduce

new processes, teams, education, and knowledge. They do not make the personal changes in

behavior necessary to model the work environment (results) they envision. They implement the new

process with the same style that they used in the past, i.e., same behaviors expecting new results

(insane).

k) If we model the behaviors (road map) defined in this process, we will build the self-esteem of our

team members. As self-esteem is re-enforced, personal, team and organizational productivity will

increase. The higher the individual self-esteem, the stronger the ego. The stronger the ego, the more

comfortable one is accepting opposing points of view. The more comfortable accepting opposing

points of view, the better the relationships and understanding. The better the relationships and

understanding, the better the organization is able to create the results envisioned.

l) The chain of events (the reaction) in this process does not happen in a vacuum, it is totally

dependent on the type of relationships we develop. You have the choice to either be a buffer to the

process or a catalyst.

m) In statistical process control we improve value by removing the variability in the process. We

define what we want (the value targets) then introduce a process to start eliminating those things

keeping us from hitting those targets (road blocks) or we introduce resources to help us hit the targets

(i.e., training, practice, etc.). We must provide consistency to improve value. If we define our

mission, values (unifying principles), vision and key management issues (value targets) and then

remove roadblocks and/or add results to help us bring our performance (behavior) in line with the

mission, values, vision, value targets, we build integrity into the organization. Integrity is defined

simply as walking your talk. People are attracted to people and organizations with high integrity.

n) Success is gauged by movement, not absolute shift in behavior.

MISSION



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Hart Crowser is dedicated to providing responsive, technically innovative yet practical and cost effective

solutions to complex problems within the applied earth and environmental sciences. We are committed to

mutual respect and the pursuit of value -- the fulfillment of needs and expectations -- in every encounter

with our external and internal clients.

As a comparison, the Mission of this training follows so that we have a clear purpose for this process.

PURPOSE OF TRAINING PROCESS

To create a work environment where all team members share a common vision of Hart Crowser, base their

actions on the same unifying principles (values), and base their decisions on the same criteria, the value

targets of Hart Crowser.

UNIFYING PRINCIPLES

We are committed to a responsive, quality product for all clients, both external and internal

We will provide a safe and enjoyable work environment of mutual respect

We will encourage open and honest communications including recognition of successes and

productive criticism of failures

We will encourage a realistic and progressive approach to our projects in a team environment

We will maintain a highly qualified and motivated staff while providing all staff members to the

greatest extent possible with the opportunities for professional growth

We will encourage all staff to develop a balance between their professional and personal lives

We will continuously and objectively evaluate performance data, with the goal of increasing the

value of our services

We will transfer ownership in the firm to its staff and are committed to maximizing the financial

value of Hart Crowser stock

We are committed to controlled growth and a reasonable profit

We are committed to maintaining, restoring, and enhancing the quality of both the natural

environment and the communities in which we work and live

INTERNAL CLIENT RELATIONS

Thoughts:



19

The best way to define your client, whether that client is inside or outside the organization, is to define the

people or groups to whom you supply a product or service. Once you have defined to whom you are

supplying products or services, you have defined your clients. It is important to note that a person or group

may be at the same time a client and a supplier to you.

As we explore providing high levels of client service, we are adding value to all of our relationships. This

does not mean adding costs, extras, or efforts. The common perception of adding value is doing just that.

The only way we can insure high levels of client satisfaction is by showing that we truly care about our

client and treat him or her with courtesy and respect.

Questioning

People trust you and order from you ( buy your ideas, services, information or products, follow and support

you) when they feel you understand them: you can understand them by asking questions.

The bottom line in communications is to understand and reach agreements. Regardless of the service or

product you are trying to create, your performance will be impaired if you can not gain the full cooperation

of those who can be a benefit to you. You can gain the full cooperation of those who can be a benefit to

you by showing that you care by asking questions.

There are two basic types of questions. Open ended and closed They are used for different reasons.

Closed Questions

A closed question is generally used to gain information of a specific kind. What is your budget? When do

you need this? When are you going to get this done? How long are you going to take? Are you going to

make your budget?

Open Ended Questions

Open ended questions are used to encourage conversation and build rapport. How would you improve this

process? What can I do to support you? What are some of the challenges you face? An alternative form of

an open ended question can be in the form of a softened demand. Tell me how you would improve this

process.

GROUP EXERCISE

Communication exercise:



20

Identify Your Customers



21

Identify Your Suppliers



22

Managing Expectations

Each time you have contact with a supplier or client, there is a set of expectations that must be fulfilled to

insure a high degree of client satisfaction. Being able to manage those expectations is the most critical

competency necessary to work effectively in a value added work culture.

To manage expectations, every individual in the organization must ask effective questions and be provided

the space to ask effective questions. This ability is critical for both the supplier of the product or service

and the client receiving the product or service.

GROUP EXERCISE

Break into groups of 5 to 6 and discuss the communications involved in managing expectations as

represented in the flow chart on the next page. How would you use effective questioning and listening skills

to improve your ability to manage expectations? How will managing expectations help move TVM into

the organization as a whole? How will managing expectations help build a cost effective, profitable long

term force in the marketplace?

Thoughts:



23

Managing Expectations

Customer requests a

product or service

Supplier receives

request for the

product or service

Request

Supplier questions

customer to insure

understanding of

request

Customer clarifies

request for product

or service

Understanding

Supplier uses

knowledge and

experience to

strategically look at

the request

Supplier

recommends a

strategic solution

that customer had

not recognized

Supplier agrees that

the request is in the

best long term

interest of the

customer

Customer and

supplier agree on

course of action

Supplier analyzes

whether or not there

is capacity to supply

the expectation

There is not a

capacity to supply

the expectation as

agreed

No

There is capacity to

supply and meet or

exceed the

customer's

expectations

Yes

An agreement is

reached and supplier

proceeds to supply

the product or

service

The capacity to

supply is adjusted or

the expectation is

renegotiated

Supplier and

customer agree not

to come to

agreement and

supply is canceled



24

TEAM MEMBER COMPETENCIES

There are six core competencies necessary to effectively integrate all of the necessary pieces to work

together to build a value added work environment.

1. MANAGING EXPECTATIONS

Asking questions, listening

Negotiation

Making agreements

Keeping commitments

There must be a work environment that encourages and rewards team members for asking effective

questions. This is the foundation of managing expectations.

2. LEADS BY EXAMPLE

Lives values, both personal and organizational, good role model.

Adds value to all relationships

Proactive and adaptable

Self motivated

Invests in others

Integrity is living personal and organizational values and vision. If there is low integrity, the behaviors

needed to model a value added life-style and organizational style will not be present.

3. FORMS COALITIONS AND STRONG WORKING RELATIONSHIPS

Builds cooperation, partnerships, and win-win agreements

Accepts delegation effectively

Adapts as organizational structure changes to meet new challenges

To work together in a team, first we must be able to accept differences. Acceptance of "what is", is

necessary before we can move ahead and create change of what we do not like.

4. ENERGIZES THE ORGANIZATION

Improves the system as a whole

Utilizes facts and analysis to guide decisions

Each team member must be able to look at the organization as a whole rather than concentrate only on

individual wants. Use of good problem solving and decision making tools is critical to insuring an effective

process.

5. FOCUSES ON THE ORGANIZATION

Strives to improve customer satisfaction

Strives to increase profitability

Team members must act in the best interest of the organization. If a team member does not feel that he or

she can do so, that individual has an obligation to attempt a change in the direction of the organization or

choose not to participate in the activity.

6. PROFESSIONAL CURIOSITY

Seeks opportunities to learn about Hart Crowser

Seeks opportunities to expand technical excellence

Seeks opportunities to learn about clients and markets that Hart Crowser Serves

Seeks opportunities to improve personally



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LEADERSHIP COMPETENCIES

There are five core leadership competencies necessary to effectively integrate all of the necessary pieces to

build a value added work environment.

1. INSPIRES THROUGH EXAMPLE

Reflects, takes action and adapts

Models leadership values and qualities

Invests in others, acts as a mentor

Shows patience, sense of humor, trust and mutual respect

Modeling the values and behaviors is the only way this process will work. If the leadership team does not

model the value added work environment, it will never happen.

2. CREATES OPPORTUNITIES TO LEARN AND IMPROVE

Connects team members to the results of their work

Commits to and creates continuous improvement

Managing expectations helps connect team members to the results of their work. Management must have

full understanding of reducing the variability around the value targets and screen all decisions through the

targets.

3. BUILDS TEAMWORK

Delegates effectively

Cultivates team capabilities

Coaches and actively builds trust

Effective delegation can not exist without effectively managing expectations. As team members understand

that leadership removes roadblocks and adds resources to help them better perform their jobs, they excel in

capabilities.

4. ENERGIZES THE ORGANIZATION

Improves the system as a whole

Utilizes facts and analysis to guide decisions

Leadership must look at the good of the whole rather than sub-optimize an individual project, department or

region. Use of good problem solving and decision making tools is critical to insure an effective process.

5. GUIDES WITH VISION

Communicates and clarifies company goals

Focuses on satisfying clients

Ensures team member satisfaction

Increases profitability

Management must share a common vision and be able to paint a picture of the Hart Crowser envisioned.

The is the act of facilitation. Facilitator is the role of the manager in Hart Crowser.

GROUP EXERCISE



26

Break into groups of 5 to 6 and discuss how the team member competencies and the leadership

competencies differ what personal changes in behavior are necessary to model the leadership competencies

necessary to sustain and build a value added work environment.

Thoughts:



27

DEVIATION ANALYSIS AND DECISION MAKING

Not only do we need to relate effectively at all levels of the organization, we must talk the same language

when defining deviations and making decisions. As we build integrity into Hart Crowser, we begin to

eliminate the road-blocks to adding value or we add resources to add value. There is a process to go

through to make sure we stay on target, i.e., we are basing our decisions and the priority of those decisions

on the key management issues for Hart Crowser, the value targets.

DEVIATION ANALYSIS

A deviation is the visible effect of a cause that resides

somewhere in the past.

A deviation represents a deviation between expected

and actual performance that is of an unknown cause.

Deviation Analysis is a systematic deviation-solving process.

A deviation always requires an answer to the question -- Why?

REWARDS

People enjoy both the rewards of success

and the process that leads to success.

People seek deviation-solving opportunities as long as four conditions exist:

1. They possess skills needed to solve deviations on the job.

2. They experience success in using those skills.

3. They are rewarded for successfully resolving deviations.

4. They must not fear failure.



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STRUCTURE OF A DEVIATION

PAST PRESENT

SHOULDSHOULD

performance performance

CHANGE

DE

VIA

TIO

N

STRUCTURE OF A DAY ONE DEVIATION

performance

SHOULD

performance

ACTUAL

PAST PRESENTDAY ONE

DE

VIA

TIO

N

SHOULD NEVER HAVE

EXISTED or NEVER HAS

FUNCTIONED

CORRECTLY

performance

ACTUAL

CHANGE



29

CAUSE AND EFFECT

The cause and effect diagram is an excellent tool to determine what the causes of a deviation are. It is very

helpful in defining where to gather data and what kind of data to gather, as well as being one of the best

deviation solving tools available.

Once the current situation and target situation are clearly defined, the team members identify the possible

causes. Brainstorming is used to generate possible solutions.

EFFECTENVIRONMENT

MATERIALS MACHINES

WORKFORCEMETHOD

CAUSE AND EFFECT DIAGRAM

Thoughts:



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DESCRIPTION OF THE DEVIATION

Deviation Statement: Specifying Questions Performance Deviation Closest Logical Comparison IDENTITY What is......? Is.....? Could be but is not.....? What is.....? Is......? Could be but is not.....? LOCATION Where is.....? Is observed.......? Could be but is not observed......? Where on.....? Is observed.......? Could be but is not observed......? TIMING When was......? Is first observed......? Could be but is not observed......? When has.......? Is observed continually.......? Could be but is not observed......? When in the operating cycle..? Is first observed as soon as......? Could be but isn't first observed...? MAGNITUDE What is the extent.....? Is.....? Could be but is not......? How many....? Is.....? Could be but is not......?

How much.....? Is.....? Could be but is not......?



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DESCRIPTION OF THE DEVIATION

Deviation Statement:

Specifying

Questions

Performance

Deviation

Closest Logical

Comparison

What is Distinctive

About

Does the Distinction

Suggest a Change?

IDENTITY

LOCATION

TIMING

MAGNITUDE



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PARETO ANALYSIS

CLIENT COMPLAINTS FREQUENCY CUMULATIVE PERCENT

Confusing billing statement 27 27 64

Calls not returned on time 6 33 78

Price too high 3 36 85

Needs not met 2 38 90

Service not delivered as promised 2 40 95

Unfriendly reception on phone 1 41 97

Did not understand proposal 1 42 100

Pareto Chart

Frequency

0

5

10

15

20

25

30

Billing

Calls

Price

Needs

Promised

Unfriendly

Understanding



33

THE ELEMENTS OF GOOD CHOICE

The quality of our definition of specific factors that must be satisfied.

The quality of our evaluation of the available alternatives.

The quality of our understanding of what those alternatives can

produce.

THE DECISION STATEMENT

A decision statement always indicates some kind of action

and its intended result. For example: Select a new Director of Quality Control.

In Decision Analysis, resolution will consist of an answer to the

questions:

To what purpose?

Which?

How?



34

ALTERNATIVES EVALUATED AGAINST MUST OBJECTIVES

Must Objectives Alternative 1 Go/No Go Alternative 2 Go/No Go Alternative 3 Go/No Go Alternative 4 Go/No Go

ALTERNATIVES EVALUATED AGAINST WANT OBJECTIVES

Want Objectives Weight Alternative 1 Score Alternative 2 Score Alternative 3 Score



35

DECISION ANALYSIS TO DETERMINE

IF PROPOSED ALTERNATIVES ARE GOOD ENOUGH

Objectives & Characteristics

of an Ideal Outcome

Model

Alternative 1

Alternative 2

Must

Go/No Go Go/No Go Go/No Go

#1

#2

#3

#4

Want Weight

Score

Weighted

Score

Score

Weighted

Score

Score

Weighted

Score

TOTALS

PERCENTAGES

%

%

%



36

ACTION STEPS

1) Screen all decisions through the value targets!

TVM Decision Pad

Decision Statement:

100% Client Satisfaction

Reward the Pursuit of the BestInterests of Hart Crowser as a Whole

Eliminate Waste and Rework by Doing the Job Right the First Time

Make Decisions at the LowestResponsible Level

Optimize Return on Investment

Value Targets considered



37

Action steps cont.

2) Manage all expectations by:

a. Actively listening

b. Use open ended questions and closed questions to understand and build

rapport

c. Use your knowledge and experience to offer strategic solutions to clients

d. Fully analyze your capacity to supply before entering an agreement

e. Clarify agreement to make sure both parties fully understand the agreement

f. Deliver the product, information or service as agreed

g. Set up check points so that client can be sure the product, knowledge or

service is on target and is what is agreed upon

3) Make and execute decisions that are within your sphere of influence using the value

targets

4) Submit all ideas for improvement that are greater than your sphere of influence or

the sphere of influence of your group, division or region to the value council for review

5) Participate in improvement projects and support others who are actively exploring

different ways of doing things

6) Create measurements so that progress can be recognized

7) Challenge all assumptions

8) Challenge all sacred cows

Documents

Hart Crowser Total Value Management