Sunday, July 17, 2011

Quality, Strategy, Execution

I enjoyed ASQ CEO Paul Borawski's interview with Tata's J.J Irani regarding how Tata has implemented quality throughout the company. I am very pleased to see someone at Dr. Irani's level promote a quality culture for this company. I already believe that companies that are serious about quality should have a CQO position at the top, to fully support improvement and customer satisfaction. If that's not possible then having someone at the top who is a strong spokesperson is the next best thing.

So how do we develop a quality culture at a company, in an overall fashion? Quality is about strategy and execution, just like every other important aspect of an organization. That's right, quality must be a strategy, a way to differentiate an organization from its competitors (speaking about for-profit organizations). That's the first step. If quality is not a strategy, discussed at the top of the company, then further discussions are almost pointless. It is a main strategy, but not the only strategy, various market-related and technology-related strategies are just as important (quality isn't everything in any organization). However, for quality, if you lose it, one of your competitors will pass you and they will beat you. Cost-cutting is not a way to grow a company, it is not a way to compete. Focusing on the "bottom line" is pointless if you do not focus on your "top line". Quality grows the top line through customer satisfaction. Quality also helps with the bottom line, but that is secondary to its main purpose of satisfying the customer. So, quality must be a STRATEGY.

The second question is that even if we have defined quality as a strategy, how do we implement it? The other key activity of business, EXECUTION, is just as important as strategy. Top management must communicate the strategy (all of it) to all layers of the company all of the time. The people at lower levels of the organization are responsible to implement it. But if they don't know what it is or how it relates to their job, how can they do that? Especially the "lowest" people in the company as they are often (surprisingly) the main interface to the customer. Think about it. If you work in a manufacturing company the people actually making the parts are probably at the "lowest" level of the organization but their activities directly impact your customer, every minute of every day. How important is it that those people fully understand and can implement the strategy of the company? It's the MOST IMPORTANT thing. The function of management, starting with the first-level supervisor up to the CEO, is to support THEM. Communicate the strategy and give them the tools to implement it, all the way down the org chart. That is the key to EXECUTION. Without that, you can start down a slippery slope and not even realize it, especially if you only focus on costs.

To close, quality must be a key strategy for an organization, one of the best examples is shown in a motto from Newport News shipyards: "We shall build good ships here. At a profit - if we can. At a loss - if we must. But always good ships." This is a clear statement of quality as a strategy. However, strategy is not enough, execution must be done with the proper mindset from management. Together, this overall culture of quality can lead to higher customer satisfaction and business success.