Improving the quality of your business
Posted by Grant Brewer on 01 Apr 2006
A question to answer in all business strategies is: how is the organisation going to achieve a high level of quality in the business and how is it going to continue to improve the quality of what it does? This is a challenging question. Firstly, the meaning of quality is not clear. Business quality should include the quality of services or products, and the quality of business processes that create and deliver the product. In addition, the quality of the experience of dealing with the organisation and using its products or services should not be overlooked.
A question to answer in all business strategies is: how is the organisation going to achieve a high level of quality in the business and how is it going to continue to improve the quality of what it does? This is a challenging question. Firstly, the meaning of quality is not clear. Business quality should include the quality of services or products, and the quality of business processes that create and deliver the product. In addition, the quality of the experience of dealing with the organisation and using its products or services should not be overlooked.
There are many approaches to achieving a high level of quality, but the starting point is often defining the meaning of quality to the organisation. Don't limit the effectiveness of your quality program by defining quality too narrowly. It is not enough to have a product that score highly in technical quality measures but that is difficult to use or that is sold with poor customer service. It is best to think of quality in a more pervasive way.
A good way to kick off your thinking about improving quality is to see how you could make the business simpler. One of the realisations that has come to the fore in industrial and corporate design in recent years is that the quality of an experience or product is not necessarily improved by adding more choice. This is contrarian and goes against a common business myth - that more must be better for the customer. Does it really add to your shopping experience to have twenty brands of toothpaste available at the supermarket instead of two or three? Does it really add to your experience or investment performance when you can choose between hundreds of different unit trusts when investing in the market? In many cases adding options is a way to relaunch or extend a brand. It is aimed at selling more product and not at improving the customer experience. So challenge the conventional wisdom of adding features to your business and its products. What about finder a simpler, more effective way to service your customers. If you need an example to prove the point, consider why Apple's iPod holds about 66% of the MP3 player marketshare, yet has fewer features than some of its competitors. Or consider why Dell only sell direct and do not provide the option to buy their computers through retail channels. Simpler is often better.
Focusing on innovation can also yield quality improvements. The great innovations of history didn't just add features - they added more than that to the product. To be success at innovation, you need to organise and manage it. The paradox of innovation is that although the ideas often come out of nowhere, you have to organise the ideas so that you can systematically manage them through decision making and execution. Innovation should also always be about the customer - about finding better products, or better ways of servicing customers, or making it easier to do business with your organisation. Eliminate processes that don't add value to the customer. Many business go through the motions day after day without a clear understanding of how the customer benefits from the process. Management need to guard against innovating for its own sake. This usually leads to increasing costs and feature creep that distances the organisation from the needs of its customers.
Knowing how to innovate to simplify the business means understanding exactly what your organisation does and what it stands for. You're not being clear enough or focused enough if you can't articulate your focus in a few simple sentences or in a mantra-like phrase. It is important to make sure your organisation is not trying to be all things to all people. Management require discipline if they are to say no to new products or features that don't add to the overall experience of the customer. At Dell, they have a saying about going direct in everything they do - and they apply it to all facets of their supply chain and their interaction with customers. It keeps them focused when they make decisions.
Only doing what is best for the customer is an extension of focused strategy. Focusing on the customer is one of the best ways of delivering shareholder value. Paradoxically, focusing only on shareholder value doesn't lead to optimised value because the means to increasing the value will not have been understood or identified. Putting customers first is easy to say - I have never seen a corporate strategy that says customers are not important. However, putting it into practice is difficult. Google has a corporate mantra that says "do no evil" and they try to apply to all facets of the business, including dealing with customers. For them it is about doing the right things. Then you can focus on doing those things well. The life industry in South Africa have come under enormous scrutiny recently for not putting the interests of the customer first and not doing what is right. That industry is going suffer the burden or increased regulation and customers that don't trust the organisations as a result.
Two concluding things that you need to get done to support a business quality improvement program: the first is around measurement, and the second it around people. Once you defined what quality means for your organisation you need to measure your progress. Define how you will measure quality, stick to the measure, publish your results regularly and hold people accountable for their actions against the quality measures. Some organisations are more comfortable with a scientific approach such as Six Sigma. Other organisations are more comfortable with the holistic approach of a Balanced Scorecard. In truth it doesn't really matter which measurement process you use. They key is to measure. Without measurement, all quality programs become leadership babble with no substance. The second foundation is to motivate and empower your people so that they are able to live up to the quality ambitions of the organisation. Give them the facts, publish your measurement results, make sure everyone understands what quality means and what behaviour will increase the level of quality.
The quality of a business is multidimensional, and the power to design the dimensions of quality and how they are to be achieved lies with senior management. Any business wishing to compete should have quality improvement on their agenda. If you're not there yet, get started.
Publication Information Improving the quality of your business was published in Intelligence Magazine as Strategym #36. It was written in April 2006.
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