Quality is a well-established discipline with many tools, best practices and frameworks, yet the application of quality principles at the enterprise level has not been well documented or extensively analyzed. Leaders continue to ask numerous questions about the best way to structure an enterprise quality function, as well as the best methods to influence the culture so work aligns with organizational goals.
A recent study conducted by the benchmarking organization
APQC provides a basis from which organizations can evaluate their enterprise quality process, identify practice gaps and adapt practices to create business value. The research included an extensive survey on quality practices at more than 25 large corporate and government organizations, as well as in-depth interviews with four “best practice” companies—
Altera Corp.,
Caterpillar,
Chemonics International and
Textron Systems.
While 81 percent of respondents agreed or strongly agreed their organization’s enterprise quality management directly aligns with overall strategic goals and initiatives, further investigation revealed most organizations have only aligned one or two core business processes. In addition, research revealed that if staff members are measured and compensated based on quality measures for value-added activities, employees will focus on those activities; eventually, the culture of the organization will naturally eliminate work that does not add value. To that end, 67 percent of respondents agreed or strongly agreed their organization uses enterprise quality measures as part of variable performance compensation.
Ultimately, the evaluation of these leading organizations identified eight imperatives for establishing an enterprise quality function.
Enterprise Quality Oversight
- Align enterprise quality with strategic goals and initiatives. At a basic level, alignment means ensuring staff work contributes to strategic goals. Most organizations align core processes in production or delivery. The next step is to align all processes with a product or service life cycle.
- Establish structures and resources to get the desired results. An enterprise quality function needs money and people. The right amount depends on the function’s goals.
- Create supporting policies, procedures and tools—not mandates. Balance support and mandates so policies and tools enable quality work throughout the organization.
The Measurement Process
- Select, define and standardize quality measures across the enterprise. Standardize quality measures with collaboration from business units in order to increase buy-in. Quality measures should expand from just production or delivery to the full product or service life cycle.
- Allow business unit leaders to establish the performance targets for enterprise quality measures. Quality leaders within business units often have a better understanding of what performance should be and how to achieve it. Provide continuous updates of individual, team and organizational performance related to targets.
- Report enterprise measures at least quarterly. Report results to leaders and staff through online dashboards with analytical capabilities. Integrate results with continuous improvement tools.
Quality Culture and the Support of Business Value
- Design quality measures to focus on value-added quality activities and core strategic objectives. Use quality measures and processes to align operations with enterprise goals. In other words, align quality activities with customer expectations, use quality measures in performance-based compensation, and leverage data to select and evaluate improvement efforts. Use quality measures throughout the product or service life cycle to ensure inputs and outputs of every process meet quality standards.
- Use measures to promote a culture of quality. Celebrate performance as a result of quality activities. Use quality measures to influence how employees work.
Next Steps
APQC’s study highlighted areas where even the highest performing organizations need more guidance, including developing a standard definition and calculation for the total cost of quality that minimizes complexity, maximizes value and can be used as a benchmark among organizations. It would also be beneficial to establish consensus on how to measure the overall performance of the enterprise quality function. Accomplishing these next steps will go a long way in helping organizations develop new quality measurement competencies.
In summary, quality is not just a set of tools, concepts or policies. It is the way work is performed every day, by everyone involved. For an organization to truly drive value through quality measures, enterprise leaders cannot dictate or mandate quality; rather, they must use measures to promote a culture of quality. Only then will quality become firmly aligned with organizational imperatives.