13. međunarodni simpozij o kvaliteti „KVALITETA I DRUŠTVENA ODGOVORNOST“, 15.-16.3.2012.
COMPETING IN A TURBULENT ECONOMY: THE QUALITY CHALLENGE NATJECANJE U TURBULENTNOM GOSPODARSTVU: IZAZOV KVALITETE
Professor Michael Kaye, Emeritus Professor of Operations and Quality Management, University of Portsmouth, UK E-mail: michael.kaye@port.ac.uk Dr Marilyn Dyason, Business Advisor and Coach, Quality Partnership Solutions Limited, UK E-mail: mdyason@qpsl.org UDK/UDC: 005.6+330.3 Pregledni rad/Review Primljeno: 18. siječnja, 2012./Received: December 18th, 2012 Prihvaćeno: 25. siječnja, 2012./Accepted: January 25th, 2012
ABSTRACT
Izvor: Zbornik radova 13. međunarodnog simpozija o kvaliteti Kvaliteta i društvena odgovornost, Hrvatsko društvo menadžera kvalitete, Zagreb, Solin, 2012, str. 81-90. Source: Proceedings 13th International Symposium on Quality, Quality and Social Responsibility, Croatian Quality Managers Society, Zagreb, Solin, 2012, p. 81-90.
This paper examines the extent to which we are equipping our new generation of quality professional with the right skills to meet the challenges dictated by the current economic environment. We can all cite common “quality dilemmas” faced by our organisations and our recent research findings1 confirmed these to include: the constant drive to deliver more with less, to maintain and build upon industry specific quality standards by delivering customer value, to reduce costs and prices without sacrificing quality. What is markedly different, however, is the way in which organisations were responding to these challenges and others relating to their industries. Many are “seizing the moment” and capitalising on opportunities. From our international research study findings into the role of quality in this new competitive era and case study based investigative work, we identified a change in quality emphasis that is necessary in order for companies to achieve and sustain competitiveness. For example, where the quality strategy is driven by the voice of the market and voice of the customer; the quality emphasis is on relationships including partnerships and collaborations; where the quality strategy is aligned with business competitiveness strategy and goes beyond product or service. This is what is required of a new generation of companies operating in this competitive era. Those companies struggling to survive remained rooted in the early “quality eras” where the quality emphasis remains focused on inspection and detection - the use of so-called “policing” methods that did not lead to the strategic growth necessary to survive and compete. We will explain how we have used these findings to design a business model incorporating the necessary “key characteristics” and how we are using action-learning methods to develop the capability of companies to survive and compete. We examine the implications for the quality professional and opportunities to enhance the role to one of greater strategic influence.
Key words: competitiveness, strategic quality, quality professional. 1
Michael Kaye and Marilyn Dyason, New Generation Quality, Parts I and II, The Chartered Institute of Quality Assurance, UK, Professional Update Series, 2011.
1. GLOBAL ECOMOMIC ISSUES AFFECTING BUSINESS COMPETITIVENESS The ability to capture and utilise knowledge from customers and the market requires speed and a high degree of flexibility and capability for the organisation to respond effectively. The global context in which this challenge exists, presents additional pressures and opportunities for our case study companies including environmental issues, less appetite for risk, reduced investment, sensitivity to pricing, advances in technology and speed of distribution channels and web-based opportunities.
2. THE EVOLUTION OF QUALITY The primary focus of our original work which commenced some years’ ago was to measure the extent to which company competitiveness was advanced, or hindered, by their progress through what we have termed the “quality eras” (the evolution of quality). This work has been widely published and is currently regularly cited in publications as a classic text in assisting companies to identify where they need to focus their quality effort in order to survive and grow.2 Our current work adopts the same diagnostic approach as that used in the original study, to determine how companies are responding and adapting to current global and economic challenges and identifying the role that their quality emphasis is playing in this. Companies that are surviving and have the potential for growth are studied in some depth to enable some findings to be made in relation to the learning for companies, as well as learning for the quality professional in how they might contribute to this. The research study was wide-reaching and inclusive of companies and organisations in the profit and not-for-profit sector, of various sizes and in a wide range of industries. Many of the companies participating in the study operated globally. The research methodology included questionnaires, followed by in-depth action-learning approaches in order to study the issues in some detail.
3. THE ROLE OF QUALITY IN THIS NEW COMPETITIVE ERA In order to transfer this learning and enable this new generation of companies to understand and identify where to focus their quality strategy, we have revisited our widely published work on the “Quality Eras”. This work describes the quality maturity of companies and the extent to which this is influenced by external environmental factors. Companies operating in early Quality Eras, for example, were found to have a greater emphasis on inspection and detection, whereas those operating more strategically were using quality as a competitive tool. The framework developed from this work has been successfully adopted by many companies in a bid to develop a more integrated, holistic approach to strategic quality management. From our current case study and investigative work, we have identified a further change in quality emphasis that is necessary in order for companies to achieve and sustain competitiveness. For example, where the quality strategy is driven by the voice of the market and voice of the customer; the quality emphasis is on relationships including partnerships and 2
Michael Kaye and Marilyn Dyason, The Fifth Quality Era, TQM Magazine, 1995, Vol. 7, No. 1, pp. 33-37.
collaborations; where the quality strategy is aligned with business competitiveness strategy and goes beyond product or service. This is what is required of a new generation of companies operating in a global era; some will not survive because they are still rooted in the early “Quality Eras”. We have expanded on these key characteristics and incorporated them into a global business model for the current “Quality Era”. We will present a case study of a world-class organisation to illustrate how the business model is leading to a change in emphasis of strategic quality and which techniques and methods are being used in support of this.
4. OPERATING MORE COMPETITIVELY: THEMES EMERGING AND A SHIFT IN QUALITY EMPHASIS The distinguishing characteristics of companies operating in what we have termed a “competitive era” and included in our business model indicate the following “shift in emphasis”: 4.1. The need to exhibit a greater level of innovation and responsiveness A shift in emphasis from product and technical innovation towards creating opportunities for innovation in service quality both internally, between the interdependent relationships and, externally, with the delivery chain. 4.2. Forming collaborations and partnerships A shift in emphasis from exceeding customer expectations towards exceeding market expectations by recognising opportunities to add customer value by collaborating with competitors, if necessary, to increase capability. 4.3. Adopting “customer-centric” approaches A shift in emphasis from “quality method” driven approaches towards the integrated application of appropriate tools and methods, as dictated by the customer and the market place “customer driven” approaches. 4.4. Strengthening relationships, talent and knowledge management A shift in emphasis from ‘hard systems’ approaches to managing quality towards ‘soft systems’ approaches, establishing systems through which people can learn and knowledge shared.
5. STEP CHANGE IN QUALITY THINKING AND PRACTICES What emerged was the need for a step-change in quality thinking and practices which clearly was having an impact on the role of the quality professional. This posed a number of challenges for which could be summarised as the need to make a transition from the more traditional quality role and the characteristics associated with this to a role which enables the quality professional to make a wider contribution and at a more strategic level.
6. THE QUALITY PROFESSIONAL AS A CATALYST FOR CHANGE What our action-learning based research study aims to do is to raise awareness amongst quality professionals of the need to reposition their role to one of influence so that they are better equipped to make a real contribution to the growth of a business - acting as a catalyst for change rather than focusing on very much a standard maintenance role. There is a growing body of evidence that such a role, whilst providing an essential ‘quality foundation’ in an organisation, is insufficient in itself to lead to growth and competitiveness in the current environment. Many successful companies are learning how to build on this foundation with the support and advice of the quality profession.
7. INTERACTIVENESS OF THE NEW ROLE It was clear from an exchange of best practices around these themes that the emerging role of the quality professional role requires a high level of interaction with other key stakeholders, both internally, with functional groups, as well as externally with customers and suppliers. The quality professional relies on a number of influencing skills including the ability to engage and enthuse others and energise them into appropriate action. For example, the quality professional was engaging with the finance function to identify ways in which cost-saving strategic goals could be achieved through improving quality within the supply chain (internally and externally), working with and through other functional leaders. Another focus of their activities was working with and through distribution channels to improve responsiveness to customer demands and designing-in customer value at each stage. This interactiveness is illustrated in Figure 1. below (the quality professional’s sphere of influence).
Figure 1. The Quality Professional’s Sphere of Influence (source: Kaye, Dyason 2011)
8. IMPLICATIONS FOR THE QUALITY PROFESSIONAL These findings pose a number of challenges for the Quality Professional which can be summarised as the need to make a transition from the more traditional quality role, and the characteristics associated with this, to a role which enables them to make a wider contribution and at a more strategic level. The current role of the quality professional operating in a more traditional role is contrasted with the future roles of the quality professional operating in a more competitive environment. The findings reveal five emerging roles for the quality professional: quality specialist, quality innovator, customer relations manager, quality consultant and quality strategist. These roles are explored further below. 8.1. Case studies From our in-company work we have been able to identify the activities in which the quality professional is engaged that result in success for the organisation and for the quality professional, resulting in a higher level of fulfilment and satisfaction in the role. A number of common challenges were expressed and a small selection of these appear below, together with the emphasis/focus that we found in companies that were successfully addressing these challenges. 8.1.1. Challenge 1: How can I apply my expertise across a broader range of functions, both internally and externally, with suppliers? There is a real opportunity for the quality professional to contribute across a wider business spectrum; by coaching and educating other key influencers towards a wider “customer view” of quality. Here, the quality professional is engaged in applying quality assurance across a broader range of activities; working with customers and suppliers to build effective and lean processes throughout the delivery chain; identifying appropriate standards and in developing a wider vision amongst those in the supply chain of the needs and expectations of the end-user or customer; aligning quality and organisational development plans with organisational goals. The quality professional’s role being one of “quality specialist”. 8.1.2. Challenge 2: How can I successfully embed the learning behind many innovative working practices and techniques employed by other organisations into what may be a markedly different working environment; how can I achieve and sustain motivation for change? Breakthrough innovations were found to come from transferring learning from quite unrelated industries, for example from the motor industry to the health sector and from the mobile phone industry to the police. Here, the quality professional needed to be skilled in understanding and overseeing the change process, building relationships with customers, suppliers and teams and in adapting the methods to suit the culture of the organisation. The message here was to allow the company problem to dictate the appropriate problem-solving methodology, rather than the technique driving the problem. The quality professional’s role being one of “quality innovator”.
8.1.3. Challenge 3: How can I, as a quality professional, ensure that the quality of the customer experience is achieved as intended, throughout the entire “value chain”? Current research has shown that the majority of the quality professional’s time is spent carrying out a “control and checking role”. However, the quality professional has a contribution to make in capturing the customers’ voice and influencing the quality aspects to ensure that the processes are capable of delivering. In the companies surveyed, the quality professional was taking the lead in establishing customer relationship management systems: identifying ways in which the voice of the customer could be captured and built into all facets of production and service delivery. In successful companies, quality was used as a differentiator and the quality professional had a key role to play in moving from “product-driven” approaches to “customerdriven” approaches to quality. The quality professional’s role in “customer relations management”. 8.1.4. Challenge 4: How can I respond to competitive demand for faster response and delivery times, and cheaper products and services, without compromising product and service quality and safety? Building on their existing quality management expertise, the quality professional provided a more holistic consultancy at all levels. Organisations that were particularly successful were able to integrate tools and techniques that addressed quality and risk, enabling them to become more competitive with regard to responsiveness, whilst maintaining required levels of quality and safety. The quality professional’s role as “consultant”. 8.1.5. Challenge 5: Are there any tools used by companies at a strategic level that we could have at our disposal to enable us to contribute at a more strategic level? Companies are recognising that, given the importance of quality as a competitive force, the quality professional has a role to play in the strategic planning process; ensuring that the strategy is realistic and achievable. The quality professional is equipped with a strategic toolkit enabling them to support organisational strategies and plans with resource capability plans giving them a broader skill base. This more strategic approach enabled companies to achieve a greater level of sustainability through whole systems approaches (i.e. those engaging with processes, people and infrastructure). The quality professional’s role as “strategist”.
9. DEVELOPING THE CAPABILITY TO SURVIVE AND COMPETE Many successful companies are learning how to build on this foundation with the support and advice of the quality profession. Through our international Quality Forum3, we are continuing to work with quality professionals to identify how we can promote and strengthen the reputation and role of the quality professional whilst make a real contribution to the mission “to place quality at the heart of every organisation”. 3
Kaye Michael and Marilyn Dyason, International Quality Forum: The Quality Professional as a Catalyst for Change, Chartered Quality Institute.
10. QUALITY TOOLS FOR THE NEW COMPETITIVE ERA From our case study and the action-learning methodology used, it is evident that the most valuable tools and techniques in bringing about the transformation necessary are those that capture the voice of the customer, including potential customers, and facilitate the transfer of that voice to the design of new products and services. This demands a creative and innovative approach to the design of products and services but, more particularly, to the design of service oriented “packages” that may be offered in addition to the high quality product or service that the customer expects. Such tools include ServQual, House of Quality and Design for Quality. Some tools, such as External Benchmarking are given a new strategic impetus as the search for competitive advantage takes place outside the industry in quite unrelated areas. Aligning the infrastructure of the organisation to one that enables such a customer-centred transformation demands inspirational leadership, new skills of quality professionals in influencing this change.
11. CONCLUSIONS The above learning is being applied by a number of companies in the study in order to address many of the competitive issues highlighted above. At the same time as this is happening, the quality professional and other key influencers, such as process owners and managers, are developing in their new roles. This holistic and integrated approach is raising the profile of the pivotal and critical role that quality management is playing in the bid to sustain competitiveness, whilst broadening the skill base of the quality professional to enable them to interpret the role in its fullest sense. We will present the key findings from our study, highlighting practical steps that can be taken to prepare organisations to compete successfully in today’s turbulent economy.
Sažetak: NATJECANJE U TURBULENTNOM GOSPODARSTVU: IZAZOV KVALITETE Rad se bavi istraživanjem do kojeg razine nova generacija profesionalaca u kvaliteti raspolaže odgovarajućim vještinama za izazove koje nameće sadašnja ekonomska stvarnost. Mogu se navesti zajedničke „dileme kvalitete“ s kojima se suočavaju naše organizacije i novija istraživanja koja potvrđuju sljedeće: stalno nastojanje da se napravi više s manje, održavanje i izgradnja prema specifičnim industrijskim standardima kvalitete i dodanom vrijednošću za kupca, da se smanje troškovi i cijene bez da se žrtvuje kvaliteta. To je način na koji organizacije reagiraju na te izazove i ostalo u vezi s njihovom djelatnošću. Mnoge od njih „iskoriste trenutak“ i ukazane mogućnosti. Na temelju rezultata međunarodnih istraživačkih uloge kvalitete u novom razdoblju konkurencije, kao i studija slučaja, utvrđena je promjena u važnosti kvalitete za kompanije u postizanju održive konkurentnosti. Npr. tamo gdje je strategija kvalitete produkt zahtjeva korisnika i tržišta; važnost kvalitete podrazumijeva partnerstvo i suradnju; tamo gdje je strategija kvalitete usklađena sa strategijom poslovne konkurentnosti i ide nakon proizvoda ili usluge. To je ono što se traži od nove generacije i kompanija koje posluju u doba konkurencije. Te kompanije bore se za preživljavanje što je preostalo i što je ukorijenjeno iz ranih „razdoblja kvalitete“ kad je naglasak kvalitete bila usredotočenost na inspekciju i detekciju, moglo bi se reći „policijske“ metode koje nisu vodite razvojnim strategijama nužnim za preživljavanje i konkurentnost. Objašnjava se kako treba koristiti ove rezultate u oblikovanju poslovnog modela koji će
imati potrebne „ključne karakteristike“ te kako koristiti metode aktivnog učenja, za razvijanje sposobnosti organizacija za preživljavanje i konkurentnost. Istražuje se utjecaji profesionalce u kvaliteti i mogućnosti za veći doprinos jednog od najvećih strateških utjecaja.
Ključne riječi: konkurentnost, strategija kvalitete, profesionalac u kvaliteti.
12. LITERATURE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Deloittes (2010) survey of 400 manufacturing companies. CQI (2009) Quality Trends and Future Directions in the Quality Profession. CMI/Cabinet Office (2009) A Decade of Living Dangerously. CMI/NESTA (2009) Innovation for the Recovery. Global Trends and Successes, (2010) International Quality and Productivity Council. Hassin, A. (2010). Effective Diagnosis in Organisation Change Management, Deakin University, Australia (citing authors Kaye, Dyason). Kaye, M. M. and Dyason, M. D. (1998) Harnessing Human Resources in the achievement of Business Excellence. TQM Magazine Vol. 10, No. 5, October. Kaye, M. M. and Dyason, M. D. (2002) Order in court (Part 1) and The Retrial (Part 2). UK Excellence, October/November. Kaye, M. M. and Dyason, M. D. (2011) Refocusing Strategic Quality Management to meet the Global Challenges of the new Era, European Organisation for Quality, Budapest. M de Menezes, Wood, Gelade. (2010) 7 Steps to success. Journal of Operations Management.