According
to a study covered in a recent Harvard
Business Review article, companies with highly developed quality cultures
spend, on average, $350 million less annually fixing mistakes than companies
with poorly developed ones.
In
the survey employees reported that it takes about two hours to correct a
mistake. Assuming an hourly wage of $42.55 (the median for CEB client
companies), a bottom-quintile quality firm with 26,300 employees (the median
head count) spends nearly $774 million a year to resolve errors, many of them
preventable. Top-quintile firms, on the other hand, spend about $424 million
annually.
Although
figures will vary according to industry and company, the
report’s authors, suggested a broad rule of thumb: For every 5,000 employees, moving
from the bottom to the top quintile would save a company $67 million annually.
Given
this tremendous financial impact, the need for a true quality culture cannot be
overstated. Building
a quality culture is not an easy task. A quality culture starts with managers
who understand and believe the implications of the systems view and know the
necessity of serving customers in order to succeed. The result of that understanding
is a culture where a positive internal environment and the creation of
delighted customers go together. It is a culture that naturally emphasizes
continuous improvement of processes, one that results in a healthy workplace,
satisfied customers, and a growing, profitable company.
Here
are a few vital points necessary for creating a climate focused on quality:
Commitment to Quality
Commitment
from management is a “MUST”. In fact, it is the driving force. Procedures,
tools, and database are all useless if the management do not want to see a
Quality culture in the organization. The employees of the organization will not
care, if the management themselves do not show the attitude to follow the right
path.
Capability of Skill
Capability
refers to having the skills to undertake work successfully. As is true with any
successful implementation, you need the right team blend and capable people in
the team, to execute these things. There will be a need to raise the basic
knowledge, understanding, and maturity for each and every member of the
organization.
Honest Communication
People
function best in a culture where open, honest communication is understood. You
may be surprised how many innovative solutions can be developed when the truth
is consistently shared throughout the organization. An important way to
encourage truth-telling is by creating a culture where people listen to one
another.
Focus on Processes
Focus
on processes helps everyone understand even further the importance of teamwork
and cooperation and the interdependence of their work. It places a premium on
implementing the tools that make management and improvement of processes more
efficient and effective. The emphasis is on continuous improvement through the
use of quality tools to measure process performance and teamwork
Understand Your
Customer’s Needs and Expectation
For
any business the customer is the lifeblood. Every process and every action
internal or external should ultimately result in the value addition to the
customer and the customer’s delight. Therefore it is essential that the
customer needs, wants and expectations are identified before you embark on a
quality building program
It
is said that the quality of an organization can never exceed the quality of the
minds that make it up. The key to success lies in how well each employee is
motivated and inspired to deliver quality work.
To
create a culture of quality, an organization must align its organizational
processes with these vital points. Quality leadership starts with the leaders
who plant the seeds, create the environment for success, empower others and
deploy quality throughout the organization.
Hi Tim
ReplyDeleteI would add one cultural extra to your list a Well Trained and Empowered work force, with clear guidelines as to how and who needs to handle problems when they occur.
At Toyota there are two different ways to signal a problem, one immediately stops the line and is to be used when there is either a safety issue or an instant threat to the products being produced. The other is a signal to the team leader and managers in the area that there is an issue that needs to be addressed. If that issue can be fixed by them and the employees in that area without stopping the line it is handled, if they cannot fix it fast enough the line will stop before the vehicle leaves that area.
Its through the empowerment and training of their employees and a highly defined set of guidelines they manage to maintain their high quality production, and their line rarely stops (most issues are fixed quickly), and those rare time they are not the delay gets minimized because of that rapid actions taken by their people.
They relay upon their people knowing their job and the product they produce, so that end of line quality issues are rare, and they spend far less fixing those issues than do most of their competitors that have failed to empower and educate their employees. Toyota senior management look at this as an essential to building good products, and would get far more excited if something gets ignored than if the line is stopped.
On the other hand management by numbers companies focus on pushing product out of the end of the line, and they couldn't careless about the quality of that product. You get exactly what you want from your employees if you want them to care you have to care, if you do not they won't care either and quality will be an after thought instead of something that gets built in.
Great comments Robert. I agree without a well trained and empowered workforce changing the culture is not possible.
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