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The Impact of Quality Improvement on Organizational Goals

Going Back to Basics with Quality

 

By Henry H. Goldman

           

It was during the mid-1980s that the idea of quality improvement hit companies across the USA and the world-at-large.  Total Quality Management (TQM) became the most important buzzword of the decade.  Variations on the theme were appearing everywhere.  The old Hughes Aircraft Company designed an on-going process that was called continuous measurable improvement (cmi).  The letters were always written in the lower case, according to Dr. Walter Michalski, former training manager for one of the Hughes divisions, because "cmi" was a process, not a program.

Processes like cmi at Hughes and programs like TQM in other companies differentiated between real quality and perceived quality.  In truth, the two cannot be separated; they must go hand-in-hand.  Recently, the world has been astounded by the Toyota recalls.  These 8 million or so recalled vehicles has seriously damaged the firm's pristine reputation for "quality" vehicles.  Toyota has been charged, by some, as having sacrificed "real" quality for "perceived" quality; has put profit ahead of making certain that the vehicles are safe, built to the highest standards and are of the highest possible quality.

The key to successful quality improvement, however, is in the hand of the company's chief executive officer.  If that individual refuses to support the quality effort, or provides lip service only, the quality-initiative will fail, and fail almost immediately. 

A recent survey of companies in the United States shows that even where the concepts of quality were inculcated into the employees, the forms still experienced disappointing results with the speed in which the quality initiatives were implemented.  Most of the survey respondents complained that their chief executive failed to fully support the movement.

Efforts to change manufacturing strategies at Gerber, the US baby food producer, were not successful because "[senior] leadership did not carry out" their mandate of support.  There is a truism in business that says that senior management must visibly support any and all new programs or the effort will fail.  According to the survey's respondents, there were three critical elements that were required for the successful implementation of any quality program: Senior leadership buy-in is required.  All quality goals must be included in the company's overall strategic targets, but only if senior management is willing to support those objectives
  • Full and open communication at all levels within the organization must be emphasized.
     
  • Measurement is critical to the success of any quality program.  Edwards W. Deming demanded measurement in order to prove that the quality initiative was working.  That gave rise to Statistical Process Control (SPC) as a part of the implementation of the quality movement.

The TQM programs of the 1980s gave way in the 1990s to universal standards of quality.  There are ISO 9000 standards, worldwide, and the associated standards in the United States of AS 9000 and QS 9000.   The ISO 9000 family of standards is applicable to both manufacturing and service industries and a large number of firms in  the USA have become certified as ISO practitioners.

 The ISO certification signifies that the company has successfully demonstrated to an impartial international accrediting organization that all of the applicable standards have been met and that the customer can be assured that the product or service is of the highest possible real as well as perceived quality.  In the second decade of the 21st century, we see the ISO label everywhere.  Examples include ISO 8000, for ethical behavior; ISO 14000, for environmental concerns and, soon, ISO 17000, for certification of management consultants.  Similarly, companies that find little value in the expensive certification process are dropping out at an unusually high rate.  United Parcel Service (UPS) who held an ISO 9003 certification and posted that information on their web site and painted it on their trucks, no longer subscribe to it.  That, of course, does not mean that UPS is no longer concerned about the quality of their service, but that in periods of economic stress, firms must find ways to tangibly reduce costs, while keeping their quality at high levels. 

The data indicate that companies which place a great deal of significance on the quality of their products or services will be able to achieve their strategic goals and short- term objectives easier and more quickly than firms that are somewhat less concerned with customer satisfaction.  The studies further suggest that attention to customer requirements  visibly enhances the bottom line.  While many companies have not yet investigated quality improvement from a return-on-investment (ROI) perspective, it has been proven that customers are more likely to purchase products and/or services from firms that really do want to satisfy their clients, something that the legacy airlines need to keep in perspective.

Henry H. Goldman is a Fellow of The Business Forum Institute and is the Managing Director of the Goldman Nelson Group.  Henry got his Masters Degree at the University of Iowa and did his Doctoral Studies at the University of Southern California.  He is a Certified Professional Consultant to Management (CPCM); and has published numerous articles in trade journals and was Associate Editor of Taking Stock: A Survey on the Practice and Future of Change Management (Berlin, Germany).  He is a member of the American Society for Training and Development (ASTD); Association of Professional Consultants (APC) and the Institute of Management Consultants (IMC). Henry has consulted and/or offered training in South Africa, Tanzania, China, Hong Kong, Indonesia, Macau, Malaysia, Philippines, Singapore, Barbados, Georgia, Kosovo, Tajikistan, Turkey, Saudi Arabia, the United Arab Emirates and of course North America. He has also taught at Baker University: Lee’s Summit, MO, 2008, Adjunct Professor of International Business; National Graduate School: Falmouth, MA, 2004-2008, Adjunct Professor of Quality Management; California State University: Fullerton, 2005-2006, Lecturer on Taxation; University of California: Berkeley, 2002, Adjunct Professor of Management; University of Macau (China), Adjunct Professor of Management, 2001-2003.

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http://www.goldman-nelson.com

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