A Case for Quality

Let’s start paraphrasing a case that Conner made:

The Quality movement has little to teach you….

…….but it has much to remind you

So what is it we have to ‘remind’ them of?

stephen.geach@gmail.com

Learning & GrowthHow will we

sustain our ability to change and improve

Internal ProcessTo satisfy our stake

holders & customers, what business processes

must we excel at

CustomerTo achieve our

vision, how should we appear to

our customers

FinanceTo succeed

financially, how should we appear to

our stakeholders

Strategies Clarify Strategic Objectives Identify CSFs Identify Critical Success Factors Identify KPIs

Critical Success Factors ≡ KPIs

Balanced Scorecard

Cause and Effect

Kaplan and Norton

The Way Organizations Work

Increase Profits by 10%

Reduce churn (turnover)

Managing Director

Increase customer satisfaction

Reduce hold times

SVP, Operations

Director, Customer Service

Director, IT

VP, Marketing

Faster access to all customer information

Eliminate disparate systems

Project Manager

Customer Value Proposition

Value Product/Service Attributes Image Relationship= ++

Price Quality TimeFunctionality

Kaplan and Norton

Marketing Mix

Price

Product /Service

Place

Promotion

Clark 2000

Quality Attributes

(Value Propositions)

Price

Quality Attributes

(Value Propositions)

Product /Service

People, Processes,Proactive Customer Service

Place

Promotion

Marketing Mix

Clark 2000

Relationship between Process and Project

Measured during projects

ProcessMetrics

Different Roles of our People

Employee Influence on Customers: which should influence the appropriate Employee selection, rewards, performance, and training requirements.

Isoteds: Finance, HR, IT, Quality.

No direct contact with customers, but as support providers their

contribution is crucial to the organization.

Influencers: Product Groups, Development Groups.

No direct contact with customers but are often involved with traditional

elements of marketing mix.

In-frequent or no Customer contact

Modifiers: Switchboard Operator, HD Coordinators, Dept Secretaries.

No direct contact with customer but still needs to be responsive to customer.

Contactors: Sales and Marketing, Customer Service.

Responsible for building relation-

ships. Need personality to be responsive to customers.

Frequent or periodic Customer contact

Not directly involved with the marketing mix

Involved with the marketing mix

Judd

Image

Expectations

Perceivedquality of

“hardware”

Perceivedquality of

“humanware”

Perceivedvalue

Customersatisfaction

Customerloyalty

Customer Satisfaction

ECSI

These measure the infrastructure an organization must build to create long term growth and improvement, and include measurements of people, systems and organizational procedures.

Examples include employee satisfaction, retention, training and skill sets; information system capabilities; alignment of procedures to recognize employee incentives in line with organizational success, etc.

These include measures such as customer satisfaction, customer retention, new customer acquisitions, customer profitability, and market share, in targeted customer and market segments.

Learning & Growth ResultsCustomer’s Results

These include measures of the critical business processes that have the greatest impact on customer satisfaction and in achieving the financial objectives (20:80 key work).

Examples include product design and product development (innovation) and manufacturing, marketing and post sales service (operations).

Internal Business Process ResultsFinancial Results

Balanced Scorecard

These include measures that indicate whether a company’s strategy, implementation, and execution are contributing to the bottom line improvement. Financial objectives can be measured by operating income, ROCE, sales growth, revenue generation.

Kaplan and Norton

Customer Satisfaction

HOSTAGESNo where else to go

Trapped due to lack of competition or high switching costs

BELIEVERSLoyal

APOSTLESSpeak out for you

MERCENARIES

Satisfied but not loyal,price sensitive

DEFECTORSDissatisfied,

may become…..

TERRORISTSSpeak out against you

Hi

MedRepeat Business

Hi=+10OK=0Lo = -10

(Jones and Sasser)

time

bu

sin

ess

go

alManagement of Change

Typical outcome of change

gap(spring back)

Quality is judged by customers. Thus quality must take into account all the product and service features and characteristics that contribute value to the customers and lead to customer satisfaction, preference, and retention.

Value and satisfaction may be influenced by many factors throughout the customer’s overall purchase, ownership and service experience.

These factors (values) include the company’s relationship with the customers that helps build trust, confidence, and loyalty.

Malcolm Baldrige National Quality Award

Quality Management

is a prerequisite for the

quality of products and services

Europe’s 500 study 1996

ofof

“Planning without awareness of what your competitors are doing is like flying a plane over the Alps in heavy fog without any instrument controls”

Benchmarking

Jan Howard

The preceding slides remind us how:

Strategic planning can identify critical success factors that, through effective policy deployment, give sustained improvement to our value proposition.

Effective leveraging and linking of the marketing mix impacts product positioning and our quality value proposition.

By designing customer service around the marketing mix we can build and maintain customer relationships which can lead to improved customer satisfaction.

Through managing processes, we can identify our capabilities, and through active benchmarking, we can identify capabilities of our competitors.

Through monitoring objective results, and involving our people, we can plan and manage effective change.

Important the quality and commitment of management is to all of the above.

Business Systems

Deming’s definition of a system:

A network of interdependent components that work together to try to accomplish the aim of the system

Kaplan and Norton’s definition of a system:

A set of processes and practices used to align and control an organization.

The Way Organizations Work

Increase Profits by 10%

Reduce churn (turnover)

Managing Director

Increase customer satisfaction

Reduce hold times

SVP, Operations

Director, Customer Service

Director, IT

VP, Marketing

Faster access to all customer information

Eliminate disparate systems

Project Manager

USA Results% improvements of award winners when compared with benchmarked

companies

European Results% improvements of award winners when compared with benchmarked

companies

Stock price 36% Share value 36%

Sales Operating income 48% Sales 17%

Sales 37% Sales over Assets 5%

Total assets 42% Capital Expenditure Over sales 4%

Employees 16% Assets 20%

Return on sales 8% Total cost over Sales 1.4%

Return on assets 3%

Demonstrable Results

( Singhal / Hendricks) ( CQE)

During a survey of CEOs and top executives, when asked:

‘does quality contribute to the bottom line or not’,

99% of the 603 respondents said they believe quality contributes to the bottom line.

When asked why quality contributes, respondents most often mentioned increased revenue through repeat business, referrals and customer loyalty; less rework; and savings on labor and materials.

Greg Weiler, ASQ project leader - 2004

ECONOMIC CASE FOR QUALITY

A Case for Quality

has already been made……..

but senior management may not have heard it yet!

The Topic of this Presentation

Thank You