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10 Essential tips for a great quality management system - #1

Management commitment – leading from the top

For any quality system to be really successful, it needs to be inspired and led from the top.

Genuine commitment to a quality system by top management will happen when there is a clear appreciation of a positive benefit/cost ratio. There is mounting evidence that quality systems can work to improve bottom-line performance.

Ask most CEOs if they are committed to quality and the answer will almost certainly be...Yes. Just as they are committed to protecting the environment - and to safety. Few are likely to be brave or foolhardy enough to state...

“No, we firmly believe in providing a poor service”, or 

“We are quite happy to kill or maim our employees”, or

“We poison the planet, and we’re proud of it”.

No, of course not. - everyone’s committed to quality. Look it says so on the quality policy statement. The one on the wall in reception, signed 5 years ago by the CEO before last.

While the above is maybe a little tongue-in-cheek, it does illustrate that in many cases, we don’t have to scratch the surface very hard to reveal that commitment to be a little thin. While there may be good intentions, an annual one-hour management review, and delegating the whole operation of a quality system to someone that already has a full-time job does not suggest genuine commitment.

One of the biggest problems facing quality managers is the lack of commitment by top management. Genuine commitment will only happen when they have a clear appreciation of a positive benefit / cost ratio. There is mounting evidence that quality systems can work to improve share value and bottom-line performance. Research by Rajan and Tamimi(1) suggests that investing in ISO 9001-certified companies can result in significant gains as compared to a similar investment in the S&P 500 index. In a recent article for IRCA, Neil Hannah describes research indicating a better ROA (return on assets) for certified companies compared with non-certified companies that seems to occur in all industry sectors studied. Hannah’s article also indicates significantly improved profit projections.

So, what is evidence of genuine commitment? Well, let’s start with the policy statement. This is the peak document of the quality system – a declaration of intent - a mission statement, if you like. While the ISO 9001 standard has certain requirements for content, there is plenty of scope to achieve that while still reflecting the culture of the organisation.

The policy should be reviewed at least annually, and updated as necessary. If there is a change of boss, it should also be reviewed then, and signed by the new boss. Most importantly, it should be shared with everyone in the organisation. After all, the boss is really stating “Quality-wise, this is what I want to happen”. Everyone involved in the organisation should at least know about it. There are plenty of no-cost or low-cost ways of achieving that e.g. including in company newsletters, intranet, web sites – even just talking about it at team meetings.

The quality policy should be supplemented by setting some strategic objectives that are consistent with the wider aims of the organisation. In a commercial business that may include the obvious – making a profit!

The management review should not just be a hurried exercise to comply with a standard. It should be a genuine business review and planning session.

Sure-fire evidence of commitment is when sufficient allocation of budget and resources is made for the system to achieve the purpose stated in the policy statement. Now, there’s the core of this particular issue - sufficient allocation of budget and resources. Developing a good – and ever-improving – quality system will take time and money. Some are just not willing to really commit to that. The perception might be that the alternative option of not investing in their quality system is a cost saving. However, there is no free alternative. The reality is that NOT having such a system takes up EVEN MORE time and money. It’s just that we are used to the day-to-day inefficiencies, errors and omissions commonplace in most organisations. We just don’t measure them, and they get lost in the mix.

If you are a CEO or Senior Manager, we believe that the above and the following articles in this series will help to illustrate why you should want a great quality system in your organisation. If you are your organisation’s Quality Manager or ‘champion’, this series of articles should help provide you with some of the evidence you need to obtain that commitment.

(1)   Full article may be obtained from the Journal of Investing - http://www.iijournals.com