Big Picture of Business – Real Quality vs. Arbitrary Metrics

0

By Hank Moore, Corporate Strategist™

There’s this thing that online retailing websites do.  They use the term “metrics” out of context.  Their metrics are arbitrary and they jerk the chains of sellers with figures that are unsubstantiated.  They arbitrarily disable accounts.  Sadly, this is what is thought of as “quality” in the digital age.  Websites that sell products are digital platforms, not the arbitrators of quality in the business world.

Metrics are easily skewed and do not reflect the overall customer satisfaction.  A criticism of performance metrics is that when the value of information is computed using mathematical methods, it shows that even performance metrics professionals choose measures that have little value.  This is referred to as the “measurement inversion.”  Metrics seem to emphasize what organizations find immediately measurable and tend to ignore high value measurements simply because they seem harder to measure.

Quality is not something that managers assign others to achieve.  It is a mindset that permeates organizations from top-down as well as bottom-up.  Rather than assume all is wrong or right with an organization and take a defensive posture, management must view quality as essential to their economic survival or growth.

Organizations measure quality by overall involvement.  It is not enough for management to endorse quality programs; they must actively participate.  Quality applies to service industries and manufacturing operations.  Even non-profit and public sector organizations must utilize quality approaches for staff and volunteer councils/boards.

Employees must buy into the process by offering constructive input.  All ideas are worthy of consideration.  What if we were all paid based upon customer perceptions of our service?  That would make each of us more attentive to what we offer and whether our value is correctly perceived.  Empowerment of employees means they accept the challenges and consequences.  They must view the company as a consumer would.

What is missing in most organizations is the willingness to move forward, not the availability of information or desire for improvement.  Willingness requires complete and never-ending commitment by management.  The most common pitfalls toward success include:

  • Taking a piecemeal approach to quality
  • Thinking that quality needs apply to some other department instead of your own
  • Thinking that you are already doing things “the quality way”
  • Failing to address structural flaws that fuel the problems
  • Focusing on esoteric techniques rather than true reasons for instilling quality
  • Saying that something is being done when it is not
  • Failing to engage customers and suppliers into the process
  • Failing to emphasize training
  • Setting goals that are too low
  • Communicating poorly with the organization and its public

Research shows the by-product costs of poor quality are high for any business, up to 40 percent.  Lack of attentiveness to quality has cost the United States its global marketplace dominance.  Other nations preceded the U.S. in adopting the quality process and overtook our nation in many areas.

In 1981, more than 70 percent of U.S. automobiles realized defects within six months of purchase.  That figure has now dropped below 40%, compared with 30% or less in Japanese cars.  The Japanese have always viewed quality as a national issue, not just an individual company matter.  The real victim of America’s late entry into the quality process was every employee whose livelihood was endangered.  Consumers did not worry; they simply bought goods and services elsewhere.

Though quality is one element of competitiveness, it cannot cover defects in the other areas.  The mark of any professional is the manner in which they correct mistakes.  Most often, this means correcting misperceptions about company attitude rather than the condition of goods.  Quality is the sum of impressions made on the customer.

The focus on quality has gone beyond the finished product and addresses all processes throughout the organization.  Paying attention to quality can realize:

  • Lower operating costs
  • Premium pricing for preferred goods/services
  • Customer retention
  • Enhanced reputation
  • Access to global markets
  • Faster innovation
  • Higher sales
  • Higher return on investments

In order to put a quality program into place, the following steps must be taken:

  • Study the activities of admired companies
  • Retain outside experts to tell you what needs to be done
  • Commission surveys that will provide comparisons between the realities and perceptions that are held
  • Assemble an internal quality team along with an outside advisor, make sure that all major departments are represented, and pursue objectives per the written agenda
  • Set realistic timelines for putting recommendations into place
  • Set schedules for routine review of the process including surveys to assure that you are making adequate progress

The challenge is to discover what mix of price and quality the customer wants and then deliver it.  Slogans only create adversarial relationships.  Once the system owns up to its shortcomings and responsibilities, then a true quality process will occur.  Failure to read the “handwriting on the wall” will thwart company growth and, thus, the overall economy.

Hank Moore has advised over 5,000 client organizations including public sector agencies, small businesses, non-profit organizations, and 100 of the Fortune 500.  Contact Hank by phone at 713-668-0664, by email at hankmoore4218@sbcglobal.net, or visit his website at www.hankmoore.com.

Share.

About Author

Leave A Reply

two + seventeen =