Quality and strategic change
| by Stephen Annandale 27 Jul 2001 Diploma in Financial Management Relevant to Paper D4 |
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Some years ago quality was seen as an innovation, paying attention explicitly to quality became a new issue in contemporary management. Quality has now been seamlessly absorbed into the everyday world of business. So much so, that it has lost its cutting edge.
Yet as the world becomes smaller, the rate of product development and the impact of the world wide web and information technology increases, businesses are pushed to strive harder and harder to simultaneously reduce costs, increase production and improve quality.
There is therefore the need to revisit quality and see it not so much as a system within the business, but as a tool for transformational change of the business.
Strategic managers of organisations need to stop looking at ways of re-structuring and instead look at ways of re-designing with incremental change. What is needed is whole systems approaches that change businesses so that they cannot regress and are radically and unalterably different from what has gone before.
2 What is quality?
Let us start with some basics, quality has been defined as:
"the totality of characteristics of a product or service that bear upon its ability to satisfy stated or implied needs"
This means that the service must satisfy a given need, and this is the need of the customer. Quality is providing a product or service that is "Fit for the Purpose". A product or service is often bought not because it is the cheapest, but because its quality and reliability are seen by the customer as giving the best value for money.
Looking at quality through a marketing perspective shows that:
"quality is the sum of all the features and benefits that give customer satisfaction and enables repeat purchasing"
Quality should therefore include:
- Knowing the Customer's Needs
- Designing products and services to meet them.
- Ensuring the supply of reliable materials and equipment.
- Using clear and precise specifications for service provision or product manufacture.
- Operating effective systems and processes that deliver the required product or service to the customer at the right time, to the right standard and at the right price.
- Staff capable of performing a professional service.
- Training and experience to ensure faultless production.
- Effective support services and integrated team work.
- Feedback systems that provide the business with information about client and customer satisfaction and enable the business to learn from experience.
3 What is quality assurance?
Quality Assurance can be defined as:
"all those planned and systematic actions necessary to provide confidence and demonstrate consistent compliance with standards so that a product or service will satisfy given requirements for quality"
The requirements are those specified by the customer, or for the purposes of external recognition, those specified by the Standard for Quality Systems, ISO9000.
ISO9000 specifies the minimum requirements for a Quality Assurance system. Quality Assurance is repeating good performance on every contract by the use of a system of documented procedures which are known, understood and operated by all personnel.
Quality Assurance has developed from the more traditional Quality Control activities such as final inspection and test. Quality Assurance offers control at each stage of the process such that it becomes very difficult to create a reject. If faults exist, they are identified and corrected prior to any further value being added.
4 Why is quality assurance necessary?
A growing number of customers require assurance that products and services provided
will meet their needs. The list of customers who require Quality Assurance Registration
is growing rapidly, and probably in the future only those companies with certification
or registration to ISO9000 will be eligible to tender or do business in certain
market sectors.
For the company, implementation of an effective Quality Assurance System could mean easier entry into new markets, improved business efficiency, enhanced reputation, reduced costs, and a better competitive position in the marketplace.
5 What is the documented quality system?
ISO9000 requires the development of a documented quality system describing the
policies and operations the organisation. This will give an accurate description
of the organisation and advice on the "best practice" adopted in order
to consistently satisfy customer expectations
Independent Registration to ISO 9000 is achieved when the company has a documented
quality system which addresses each clause of ISO9000, and the procedures can
be demonstrated to work in practice.
A Quality Manual is usually produced. This describes the policy, organisation
and responsibilities of the business. It documents the processes of the business,
and the best practices to achieve success in those processes. It would also
describe a sub-process in some detail.
6 Benefits of quality assurance
Achieving the standards of ISO9000 allow the business to use a Registered Company
symbol (logo) as a statement to all that the company has been successful in
an assessment process by an independent third party body. This recognition provides
many marketing benefits.
For example if a customer decides to offer contracts only to Registered Companies, those without the status will not be considered. Also it is an accepted international standard. Customers recognise the status of an independent assessment and registration.
However one of the most important benefits of Quality Assurance is the potential for improved profitability. Improved efficiency is realised by the same procedures that achieve Registration such as improved awareness, decision making, planning and organisation. These can lead to improvements in how the business is run, how products and services are delivered and how support systems operate. Efficiency benefits include:
- Reduced unproductive time.
- Reduced time spent on rectification of errors.
- Reduced warranty costs.
- Reduced liability claims.
7 So will quality assurance last the distance?
All of the above is good and sound, yet it also has the strong air of systematising
quality and systematising the potential for innovation. The problem with manuals
and assurance processes is that they are all so logical and perhaps in rapidly
changing times businesses also need their fair share of inspiration and innovation
above and beyond systems. Will systems always take account of change or more
importantly should they even try to?
Change happens all the time. It may be small-scale, involving the change of people and therefore the creation of new teams. It may be to do with the introduction of new technology, with the 'what' and the 'how' of working processes; or it may be to do with fundamental change in the nature of the business, market and internal workings of an organisation. It is the author's view that too much emphasis on systems and assurance will stifle organisations.
R. W. Dearden1 says "the change process is often described as logical
and sequential":
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Stimulus
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Analysis
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Options
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Strategy
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Plan
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Implementation
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Change
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Change Goal Achieved
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Unfortunately, neither people nor change is rational or logical. And yet we
all pretend we are, and that decisions are based on a well argued, objective
and well-informed basis.
In reality the change process means:
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Delay in recognising there is a problem to be addressed/a
stimulus to respond to:
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Too much time spent on analysis, strategy and planning
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Distancing of people from the issues which may require
them to change
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Resentment from staff at the delay and secrecy; rumour
abounds
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Once the plan is launched, the workload seen to have
doubled - keeping the show on the road and making changes
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Time for implementation now short, so no room for experimentation
or involvement in decision making
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Manipulation, pressure and persuasion to 'make' people
change
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Time drags on, key people leave, energy fades and the
change fails
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Cynicism, apathy, frustration and resentment abound
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No matter how well designed the Quality Assurance system is, no matter how perfectly logical it is and no matter how well it tries to incorporate change, will it sufficiently address the emotional responses of teams and individuals in times of rapid change? In short will it stay the distance in a world of whole systems thinking and whole systems change and transformation?
The author's view is "probably not" and that alongside Quality Assurance organisations also need to see Quality Improvement as a radical force for transformation, with Quality Assurance systems catching up later as the transformed organisation tries to systematised its new state, post transformation.
8 Quality improvement as transformer
Rather than just building systems to quality assure, transforming businesses
will be striving to engender a culture of innovation and change throughout their
organisations at all levels.
Techniques such as Continuous Quality Improvement do not ask the question "Are we delivering the service in the way the manual says?" Rather it starts from the notion that " there must be a better way" and so the question is "How can we deliver even better quality and do this time after time after time?"
This calls for experiments, innovations, and constantly learning from trials. It can even call for celebrating mistakes, as it is only from errors that we really learn. Celebrating error is one way of encouraging a culture of learning rather than a culture of blaming. This is the essence of organisational life in turbulent global economies.
The challenge for companies is simultaneously to have in place quality assurance systems for managing today and to encourage an almost maverick culture of creating new quality pathways and new dimensions of quality for tomorrow. Managing the tensions between the two and the ambiguities is one dimension of what leaders do in modern organisations.
Yet this is not enough. It is of no benefit if trials and experiments and learning remain in just one part of the organisation. Learning about quality improvement, about what does and does not work, needs to be spread. So whilst we also foster systems to maintain what we do well now, we must also at the same time challenge this all of the time and share the learning.
9 Rapid spread and adoption
Spreading quality improvement as a transforming agent should be a major strategic
theme of any medium to large sized organisation. This is necessary in order
to both accelerate the rate of change and minimise the resource wastage that
can arise from multiple re-inventions of learning already gained elsewhere.
The basis for this approach to spread strategies is the work of Everett Rogers2 . The general proposition is that the shift from 10% to 20% adoption is the core of the spread process. After that point, it is often impossible to stop the spread of a new idea, even if one wanted to. This means that, in moving to spread, leaders of change need to secure adoption by about 20% of the stakeholders to engender a self-sustaining momentum for spread.
Based on the original thinking of The Institute for Healthcare Improvement, many production and service organisations could do well to have give careful consideration to the means for spreading improvement3 .
The propensity to adopt increases:
- Iif the advantages of the new way of working can be seen from pilots.
- When the change is compatible with present values of the organisation.
- Where the effects of the change can be tested and measured.
- Impact of the change.
There are three main models for spread:
Optional
In this model, adoption of learning from elsewhere is discretionary, re-invention
is an individual matter and the main activity undertaken by the innovators is
the promotion of the successful results from the pilot and experimental sites.
Collective
In this model, the role of the innovators is to help adopters see the larger
system and the adopters' work collectively to learn and support spread. Re-invention
is a decision of the adopting group.
Authority Model
This model requires a strong system leader to drive the change agenda, the availability
of strong evidence of improvement and the availability of detailed information
about content, processes and consequences.
It is probably best to begin with the optional model initially and add the others to the spread strategy as the opportunity arises.
Arising from work on the quality improvement, the following lessons can be drawn:
- Establish clear roles and responsibilities for spread.
- Clarify and make specific the target audience for spread.
- Use sound and appropriate promotional and communication activities.
- Prepare a planned schedule for spread.
- Give guidance and support for adopters ie action learning sets, workshops, and coaching.
- Make an investment in support services so that adopters have access to expert and technical advice as well as the experience of others.
- Recognise that spread will not happen spontaneously. Choose an executive who is responsible for managing spread.
- Spread is more successful if prospective adopters are assessed as to their readiness to make adoption successful.
- A degree of local re-invention is helpful in achieving ownership and local commitment.
- Maximum use should be made of a web-site to communicate and provide detailed information.
- Focus on those motivated to change in order to minimise resistance.
- Allow adopters to identify what they wish to adopt.
- Provide multiple opportunities for adopters to learn from each other and share best practices.
How is your organisation seeing quality? As something to be managed, organised as systematised or as something to be a force for transformation, a source for innovation and a source of learning? Or should your organisation be striving to see quality in both ways for a good today and an even better tomorrow?
References
- Dearden R. W., 1997, Change Masters, an internal publication by Dearden Management Ltd, Bristol, UK
- Rogers E, 1962, 1983, 1995, Diffusion of Innovations
- Schonberg A, Ray W, Provost l, 1999, Spreading Improvement: The Experience with Service, 11th national forum on Quality Improvement in health Care, December 7-10 1999, New Orleans