Executives and managers often struggle with who is in charge. One of their battle fields is quality. Often executives do not see the value in quality systems, while managers more often do, but it is not guaranteed. Quality managers always do, but are unable to quantify the benefits in business-savvy terms. They meet resistance in implementing quality systems. Quality starts to look like a cost center and a drain.
Yet, quality systems are typically the only documented business management system for an organization. The benefits and return on investment of quality systems are quantifiable and clear for those who know how to measure.
Typical results include:
- Increases in market share by 20-50%
- Reduces costs and improves profitability by 10-30%
- Reduces compliance risks and costs by 10-50%
- Improves on time delivery and quality by 10-80%
- Improves teamwork, communication and culture
- Ensures Customer’ loyalty
- And more . . .
Historically quality systems were the brain child of Edward Deming. His Total Quality Management has had a long and broad influence. Following World War II, Deming assisted Japanese manufacturers in applying his methodology. He enabled the Japanese to actualize widely and experience unheard-of levels of quality and productivity. The improvement in quality combined with lower costs created new international demand for Japanese products. Coming back to America, Ford Motor Company was one of the first American corporations to enlist Deming’s assistance. In 1981, Ford's sales were falling. Between 1979 and 1982, Ford had incurred $3 billion in losses. Ford recruited Deming to help jump-start a quality movement. By the time Deming was done, Ford had become the most profitable American automobile company, exceeding General Motors—then the gold standard.
During its heyday, “QUALITY IS JOB # 1” was the main marketing message from the Ford Motor Company. The meaning was clear, Ford took the issue of “Quality” seriously and it is was “built in” to their operations and manufacturing processes—not just “inspected in” at the end of the production process. Ford’s leaders realized and actualized the benefits of quality systems.
After all this history of success, 40 years later organizations are still reluctant to jump on the benefits of quality systems. In the early 1990s, the International Standards Organization (ISO) took Deming’s lead and initiated development of industry standards for quality systems, after Deming had left Ford and just before his death. Today these quality standards cross many industry sectors.
• Automotive- ISO TS 16949
• Aerospace- AS 9100
• General- ISO 9001
• Medical Device- ISO 13485
• Energy- ISO 50001
However, many times executives are forced to implement one of these standards forced by Customer and or regulatory requirements.
Peter Drucker knew how organizations can bring out the best in people, and how workers can find a sense of community and dignity in a modern society in large institutions. The quality management industry incorporated Drucker’s human side of business concepts into the quality standards. This is part of the reason quality systems implementation improves communication, teamwork and culture through a bottom-up change management process.
The latest revision (2015) of the ISO 9001 might make Deming roll over in his grave. The International Standards Organization extends quality by expecting top management incorporate quality in strategy and planning activities. This push is falling on deaf ears and some companies are, unfortunately, dropping their ISO 9001 registration. This is a mistake. The value and results of implementation of quality systems are clear and quantifiable. It is time to understand, quantify the value, and rebrand the quality systems as your new
B.O.S.S.—Business Operating System Strategy™.
It needs to expand to all areas of the business, not just those related to production.
Our next article will expand upon this idea.
Want to learn more and take your business “up a notch?” Contact either of us.
Debra Mervyn, The Mervyn Group, debra@MervynGroup.com
Paul Menig, Business Accelerants, paul@BusinessAccelerants.com