1. Quality-Cost Connect

    September 28, 2015 by ahmed

    By Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.

    Multinational banks are known to invest in excellent infrastructure and executives. The lowest designation for a new campus recruit two decades ago, in India, was nothing less than Vice President. Salaries matched the designation. The self esteem of these freshly recruited students was always at a zenith.

    They were the prize catch for the most popular campus recruiters—multinational banks.

    I was invited by a multinational bank in South Mumbai, the financial capital of India, to experience excellence. An autopsy of sorts. Yes, this branch of the bank had marble flooring, piped music, art that only a successful bank could afford personal computers at every desk, and more. Perfect.

    The head of the branch took me around to meet with several of his executives. I will focus on one 200 square feet section that was partitioned with a three feet high wall. This section seated four executives, in the four corners, facing the partition wall. All four in pin striped suits. Each of the four was very busy working on his dedicated personal computer

    I asked: “What is the activity of this section?”
    Branch head: “They print the monthly statements of account holders.”
    The qualitist in me: “Oh, they manufacture monthly statements.”
    Branch head: ???
    More of the qualitist: “What is the failure rate for these monthly statements?”
    Branch head: “Can’t you see…it’s all computerized!!”
    Yet more of the qualitist: “Oh. I see. Do any customers come back for reconciliation?”
    “Hardly any.”
    “How many?”
    “Perhaps one in 200.”
    “Ah ha. That’s 0.5% failure rate.”
    “So what’s the cost of failure?”
    “Minimal.”
    “Let’s find out”

    The branch head and I invested a half-day finding out what work the four executives actually did. As it turned out, one needed the equivalent of two persons to do 99.5% of the work right the first time and the equivalent of another two to correct 0.5 % failures!

    Potential_gains

    So what is the cost of poor quality (COPQ) of this section? It’s 50% of the budget for that department plus the equivalent of marble flooring, piped music, and art.

    The bank heard the alarm. They commenced their pilot projects by working on COPQ for the auto loan process in South India.

    Lessons Learned:
    – COPQ is alive and well in every service process
    – A low failure rate can disguise a high COPQ
    – COPQ is an opportunity
    – Problems for pilot projects should have high visibility
    – Quality has two arms: product/service features and freedom from deficiencies

    This fable aims to demystify the concept of COPQ and how it affects our balance sheets everyday! The costs associated with poor quality are due to both sporadic and chronic quality problems.

    These costs together are referred to as COPQ. The COPQ in any organisation is approximately 30% of total costs. Consequently, the proposition is: halve your COPQ and double your profit (without capital investment).

    A sporadic problem is a sudden, adverse change in the status quo, which requires remedy through restoring the status quo. Firefighting.

    A chronic problem is a long standing adverse situation, which requires remedy through changing the status quo. Fire prevention.

    The skills required for fire prevention are distinctly different to those required for fire fighting. Likewise, the skills required for solving chronic problems are distinctly different to those required for solving sporadic problems.

    Do managers have the skills to solve chronic problems?


  2. 10 Tips on Getting the Most out of Business Meetings

    September 27, 2015 by ahmed

    Originally posted on Entrepreneur by Stan popovich

    Meetings can be time suckers, and if nothing gets accomplished during them, frustration may ensue. Not only does a company waste valuable time and money conducting business meetings that don’t produce results but employees will begin to loathe attending these functions.

    Here are 10 suggestions on how to get the most out of your business gatherings.

    1. Know what you want to accomplish. It is important to know why you are scheduling a business meeting. Write down a list of goals you want accomplished before your meeting and then present this to the attending members. Do not leave the meeting until you get the answers you’re looking for.

    2. Develop a plan. Once you decide what you need to accomplish, you need to create a plan on how you will communicate your goals to employees. Avoid using complicated or “jargony” words when trying to explain new ideas and be willing to answer any questions that are asked by members of the group. If someone doesn’t understand what you are saying, don’t lose patience. Instead try to rephrase your communication, so everyone is on board.

    3. Write a one-page summary of your meeting. Before the meeting begins, create a one-page summary of the major points that you want to cover during your meeting. This lets your employees know what to expect, which will result in them having a better understanding of what to expect in the meeting. Also, this will help reduce any anxieties or fears among your workers and prevent any rumors from spreading before the meeting begins.

    4. Make sure you stay on topic. When there is a lot of people in a meeting it can be difficult to stay on topic so prepare accordingly. If you find that the meeting isn’t going anywhere or someone is off on a tangent, then politely circle back to the important topic that needs to be addressed.

    5. Ask the right questions. Always ask the right questions when talking to your employees and colleagues. To prepare, write a list of questions that relates to your current business concerns. If you ask a question and someone beats around the bush, make sure you ask for clarification or push to get an answer that resolves your issues.

    6. Encourage participation. Do not let a few people take control of your meetings. Instead, create a friendly atmosphere where everyone feels comfortable expressing their opinions.

    7. Determine a timeline. Make sure you have specific deadlines of when you would like your objectives to get accomplished – otherwise, not everyone may be on the same page.

    8. Don’t leave the meeting right away. Don’t just finish your presentation and then leave. Chances are some topics may need to be further explained or someone will not fully understand the presentation. Again, be patient and ensure that everyone understands your business goals.

    9. Learn from your mistakes. Learn how to improve your company’s business meetings by reviewing past presentations. Focusing on what you did wrong the last time can go a long way in having productive meetings in the future. Another idea is to ask for feedback from the people that attended the meeting and follow through on their suggestions.

    10. Change things up. Add some variety to your meetings and do not do the same thing all of the time. This will prevent your employees from getting bored and may also encourage participation. Be flexible when taking suggestions on improving your business meetings.


  3. Inspiration in India Through a Focus on Performance Excellence

    by ahmed

     

    Originally posted on Blogrige by Dawn Marie

    “Those that say it can’t be done should get out of the way of those doing it.”

    That proverb has proven inspirational for three Baldrige practitioners who, at the invitation of the Quality Council of India (QCI) and ASQ India, recently traveled to the country to spread news of how the Baldrige framework can help address issues–even “stunningly important” ones, including dramatic population shifts that challenge the country’s future.

    From left to right, JoAnn Sternke, Ashleigh Grizzell, Paul Grizzell, and Micky Roberts

    From left to right, Micky Roberts, Paul Grizzell, and JoAnn Sternke

    At the 10th Annual Quality Conclave in Dehli, India, Paul Grizzell, president of Core Values Partners, Inc. and his daughter Ashleigh; JoAnn Sternke, superintendent of Baldrige Award-winning Pewaukee School District; and Micky Roberts, state director of performance management in the Office of Planning, Policy and Assessment with the Tennessee Department of Health, presented and hosted workshops on performance excellence with Indian leaders and regulatory and quality professionals.

    blog_India_3

    Grizzell, who gave a keynote speech on moving from compliance to performance excellence, said that health care and education are “stunningly important issues in India,” which has 1.3 billion people, many of whom are very poor.

    Based on feedback from attendees, Grizzell said they appreciated such thinking about a focus on excellence over compliance and also showed appreciation for the Baldrige Excellence Framework and what it can do for organizations of all sizes in all sectors. “If your organization focuses on excellence and your competitors just focus on compliance, then that is where your organization gains a competitive advantage,” he said.

    But it was the hope that great challenges can be addressed and even overcome that Grizzell said most inspired him. “That [proverb above], I think, really resonated with people. To say, ‘Let’s get beyond thinking about just meeting regulatory requirements and “little q” quality. Let’s be thinking of what we can do to make significant change. Let’s not be limited by the way we have always done things.’”

    India faces incredible challenges in providing basic services throughout the country and, given its size and the youthfulness of its population, is on target to be the most populous country in the world by 2020–2025.

    “The scale of things is just enormous in India,” said Sternke. “With 1.3 billion people. The need to create close to a million jobs. The need for a framework is vital as [Indians] tackle the challenges that face their country. The Conclave’s focus on ‘creating an ecosystem for world-class quality’ speaks to [participants’] desire to ‘connect the dots’ and find interconnectedness as they create a better future. How exciting is that? And I can think of no better framework to show alignment and connections than the Baldrige Excellence Framework.”

    “What was most inspiring is this idea of people coming together and saying, ‘What can we do in the quality community to help drive performance excellence to address some of the challenges that India faces?’” added Grizzell. “I walked away from India where there’s this extreme poverty like we have never seen over here. And walking away from those people who have hope for being able to address some of those significant challenges in that country makes things seem much more manageable [in the United States].”

    Roberts echoed this sentiment. “The passion for quality was evident across the many different sectors and countries in attendance. One thing we could all agree on is that not investing in quality is more costly than taking the time and commitment to make quality improvement a part of the culture.”

    Through presentations at the QCI Conclave and workshops sponsored by ASQ India, Grizzell, Sternke, and Roberts used the Baldrige Excellence Framework and its Criteria and Core Values as the foundation for helping Indian companies move toward excellence. Roberts and Sternke shared their firsthand experiences using the Baldrige framework in the U.S. education and health care sectors and the strong results they achieved.

    “The fact is that no matter the size of your company, medical center, or service population, the Baldrige framework is scalable and will result in improvements that will enhance your value amongst your workforce and customers,” said Roberts. “I was honored to share how a large health endeavor in Tennessee is able to take quality to scale from the smallest most rural clinic to the largest using the Baldrige framework.”

    He added, “Making health care service delivery a continuous improvement process as opposed to a standards checklist seemed to resonate the most with health care practitioners in attendance.” As a result of utilizing the Baldrige framework, Tennessee health care organizations have reduced clinic wait times and increased customer satisfaction, he said.

    “The focus on creating jobs is a key challenge [for the country],” added Sternke; “Fifty-two percent of India’s population is 25 or below. Clearly, education is a cornerstone of this focus.”

    The workshops also helped participants identify which of the Baldrige Core Values were strengths and which were opportunities for improvement within participants’ organizations. Using a matrix, participants could see where in the Criteria they would find content to drive them towards improvement in those areas.

    blog_India_4

    “To me, the messages of Baldrige, which start with the Core Values, are applicable to any organization in any country around the world,” said Grizzell. “If I were to take the Baldrige Criteria themselves, I honestly could not think of anything off the top of my head that I would say that’s not going to be relevant [in another country].” Even in countries like China that are moving from a centrally planned economy to a market economy, Baldrige customer concepts and values are going to be extremely relevant, he added.

    Grizzell’s keynote address counseled participants that the Baldrige framework is a “common language of performance excellence. And if an organization aspires to be represented by the foundational core values, then the Baldrige Criteria are the roadmap to help an organization reach that goal.”

    Much discussion at the Conclave also focused on how to sustain growth. In India and China, small- to medium-sized enterprises are seeing the greatest growth potential, said Grizzell; “These are organizations that are saying, ‘I was started by an entrepreneur. I’m growing. What do I need to do to continue this growth?’ . . . The Criteria are such a great model to help [organizations manage growth].”

    Sternke said the commitment to quality that she observed at the Conclave was “invigorating. . . . You can find a commitment to quality throughout the world. There was such heartfelt desire to employ quality principles to achieve excellence. Close to 2,000 people attended this Conclave, and all participants desired to be systematic in their pursuit of excellence.”

    The mission of ASQ India is to help Indian companies stay abreast of international standards through stable quality systems and continuous quality improvements by offering a knowledge exchange and training and certification opportunities.

    The mission of QCI is to lead a nationwide quality movement in India by involving all stakeholders in adherence to quality standards in all spheres of activities.

    From left to right, JoAnn Sternke, Ashleigh Grizzell, Paul Grizzell, and Micky Roberts

    From left to right, JoAnn Sternke, Ashleigh Grizzell, Paul Grizzell, and Micky Roberts


  4. COER News – Benchmarking and Business Excellence, September-2015

    September 20, 2015 by ahmed

     

    This September, the Centre for Organisational Excellence Research (COER) has issued its latest newsletter.

    The first section includes important news about the upcoming 4th International Best Practice Competition and– closing date for entries 25 September.

    Whether you are looking to know the latest COER publications in the field or you would like to know what are the latest must attend events you will find it in COER’s newsletter.

    The contents for the newsletter are listed below:

    • 4th International Best Practice Competition – 2nd Call for Entries
    • Upcoming Events
    • Latest news
    • COER’s research projects

    You can download the newsletter from the COER website here


  5. Quality Equals Trust

    by ahmed

    Originally posted on Quality Digest by Carlos Venegas and Gaurav Tamta

    Quality goes beyond the purview of the quality professional. Quality, it has been said, is everybody’s business, but too many outside this discipline see it as something dry, bland, and boring—and perhaps for good reason.

    For example, one of the authors of this article had the painful, all-too-familiar experience of annual quality training, in this case by enduring someone reading PowerPoint slides out loud in an officious monotone. Quality was a check-the-box exercise. Yuck!

    Here is how people in a software company (where the other author worked) described quality: “When the quality people talk to us, it seems very boring, monotonous, overly methodical, and number-driven. We don’t even understand what they say. Who wants to hear that? We get pushed by our managers to attend.”

    Too many quality efforts are experienced—and received—this way. The result? Resistance. Frustration. Apathy. And the cost to the organization? Quality suffers, employees suffer, and customers suffer.

    It doesn’t have to be this way. There is a way to turn around a quality program that’s not getting results. It begins with understanding that quality is not just about numbers, parameters, or measures. Like every other business process, it’s also about human behavior. So how can we humanize quality?

    Quality = trust
    If you want people to care about quality, you need to help them understand that quality is an important part of working relationships. It affects how they are viewed by others, and how they affect others by their actions.

    The objective is simple: Help people understand the emotional effect of quality. They need to see that quality is intertwined with trust, a value many hold dear and believe is worth upholding.

    Less quality = less trust
    Trust is powerful, and not just as an emotionally charged value. It has economic currency.

    In the article, “Trust, Transaction Cost Economics, and Mechanisms,” appearing in Handbook of Trust Research (Edward Elgar Publishing, 2006), authors Reinhard Bachmann and Akbar Zaheer claim that, in large part, this is because trust increases the speed of transactions. You’ve probably experienced this yourself. Think of those with whom you do business who consistently deliver a quality product or service. Isn’t your decision to use them again easier (and quicker) than deciding whether to use someone you don’t know or trust (yet)? Think of your colleagues: Isn’t it easier to work with the ones you trust to give you quality work? Now think of those you don’t trust because of the lack of quality in their work. You spend more time making sure you are getting what you expect, which is a frustrating, nonvalue-added process.

    Trust is built one interaction at a time
    “Trust is a practice,” write authors Robert C. Solomon and Fernando Flores in their book, Building Trust in Business, Politics, Relationships, and Life (Oxford University Press, 2003). This practice, or habit, is built one interaction at a time, whether we are talking about Amazon delivering an avocado to your door in two days, or your facilities department fixing your chair this afternoon, just like they promised. When you get what you expect when you expect it, your trust in the supplier and product or service grows.

    Trusting quality: making quality real
    If trust is built one interaction at a time, then attention to quality is the machine that builds trust. This is no easy task, but it is doable—and rewarding. A technology company, where one of the authors of this article was the global quality director, was able to build trust in quality with stellar production results. The company reduced defect rates by 74 percent in three months, and first-time-right rates doubled within two months.

    These improvements were made on a foundation of trust. The quality units began to demonstrate that their intention was to support operations, not find ways to pull them down. The traditional antipathy between quality and operations resolved into a positive partnership. Here’s how they did it.

    Quality champions received training in “soft skills.” This included training in change management, coaching and mentoring, and a change method called Appreciative Inquiry (AI).

    In the AI training, the quality team learned a model for analysis, decision-making, and creating strategic change. Rather than focusing on what wasn’t working, the AI training encouraged the quality team to focus on what the operations units were already doing well. Both teams together then envisioned the best possibilities, developed a way to achieve that vision, and then built on their strengths to implement it. With this approach, conversations during root cause analysis meetings and other quality review meetings evolved from judgmental, finger-pointing blame fests into productive, appreciative analyses of past successes, with brainstorming on how to repeat the success or even expand on it. Two opposing camps became two partners.

    In coaching and mentoring training, the quality team learned how to approach every staff interaction with empathy and humility. Team members became skilled in motivating the staff to understand and contribute to the quality vision. They felt accountable for the staff’s performance, and this encouraged both the quality team and the staff to develop innovative and resourceful solutions. The staff started taking more ownership of quality and generated more quality ambassadors over time.

    With change management training, the quality team learned to communicate effectively, i.e., to speak in a language the staff understood, without using technical jargon. Instead of using buzzwords like sigma value, failure mode and effects analysis, or hypothesis testing, the quality team worked with the operations staff to define the problem in terms that the staff would understand, and linked it to the operations staff’s key performance indicators (KPIs). This activated the staff’s “what’s-in-it-for-me” reflex and got the operations teams’ attention and commitment.

    The quality team also solicited and received regular feedback from the operations staff, which helped the team members improve their listening skills and build a connection with their operations counterparts. One example of feedback was when one member of the quality team was viewed as being rude and judgmental toward an operations team. Although this was not the intention of the quality team member, this individual would have remained unaware of the issue had feedback not been solicited. The person could then do something about the communication approach, leading to more productive outcomes.

    Although this might sound like a trivial example, there were many such communication disconnects. Each one of those disconnects was yet another brick in the wall that separated the quality team from the rest of the organization.

    Armed with skills in AI, coaching and mentoring, and change management, the quality team was able to tap into the workers’ pride and self-respect through skilled, effective conversations. This provided the momentum to build on a technically sound quality program.

    In our next installment, we’ll share the strategy used to rebuild this company’s quality program.