|
Competing with Quality
Quality excellence is all about building market share and wallet share by winning new customers and keeping existing ones loyal and more and more engaged. Far too often, discussions of quality are interrupted by the cries of cost and time. Too many people believe that there is always a trade-off to be made between quality, cost and time. It is true that sometimes certain customers may require that we trade quality for lower cost or less time. But when it comes to putting your best foot forward, quality must be the foremost consideration.
We already know that this is essential for long-term competitive strength. What we must also understand, is that producing high quality does not cost more or take more time. In fact, the improvements that lead to higher quality also translate into improved efficiency and enhanced effectiveness. Companies that focus on quality also find cost and time saving opportunities that accrue to competitive advantage. By providing only high quality products and services, companies can:
minimize inspection and audit costs,
eliminate scrap, rework and errors,
reduce complaints, returns and warranty claims,
improve customer perceptions,
build a reputation that earns a premium price,
improve the company's market share & wallet share,
increase the value of corporate shares
Additionally, the pursuit of quality excellence also produces many invaluable spin-off benefits that derive from the empowered teamwork and learning involved. These benefits readily translate into superior performance and competitive advantage.
Cross-functional teamwork increases attention to detail and reduces time to market.
Tangible empowerment improves participation, commitment, and morale, and generates innovations.
Enhancing the problem-solving expertise of operators reduces the need for staff experts, support people and outside consultants.
Process redesign reduces the amount of non-value adding work, complexity, errors and delays.
Relations between your company and your customers and suppliers are enriched by joint improvement efforts and the gains achieved.
New process monitoring and analysis capabilities give companies a sharper understanding of their operation and their opportunities.
The establishment of systems for continuous improvement ensures that the organization learns, grows and renews itself indefinitely.
Because companies must remain competitive over the long run, they must implement a positive strategy that is focused on sustainable progress. They must be able to keep on going in the same strategic direction indefinitely, or suffer the loss of energy that a change in direction is. Truth be told, there is only one sustainable choice, and that choice is quality improvement.
Cost cutting and price slashing are self-defeating strategies that can only be carried so far before they become unprofitable. Rampant marketing can produce jaded consumers. Financial manoeuvres like mergers and acquisitions can distract management attention from the tasks at hand. None of these strategies are sustainable over the long term. There are limits beyond which they produce diminishing returns. A failure to recognize this fact can cause any company to over-extend itself in the wrong direction. Avoiding this situation is therefore very important. The only way to do it is to invest in quality.
Let quality be your guide.
Because the stakes are so high, there is no room for guessing. Consistently superior performance can only be achieved through the systematic use of rigorous methods. The backbone of any rigorous method is theory. Good business theory is indeed the most practical tool anyone can ever have while on the job.
We in business have all heard dispersions cast upon theory. We are an inherently pragmatic group, and we are always skeptical of the value of theory in our very practical world. But indeed, theory is the basis of all knowledge, including knowing what to do in business. There may be many who argue that experience is the best guide. But experience is by definition a subjective and historical property, that may not apply to the current context, and may in fact be shaded by individual perspective and the effects of time.
Because the knowledge that derives from experience is from the past, it cannot be tested or validated or replicated. In other words, experience does not establish a cause and effect relationship. It only provides a snapshot of the past - a snapshot with many limitations and often questionable reliability. This explains why experience does not furnish people with the ability to predict the future.
To compete and succeed over the long term, companies must be able to make reliable predictions about the best course of action. This can only be done with theory - an explanation of cause and effect that can be observed and/or replicated. Applying theory to produce a result is as practical as business gets.
Successful companies develop, test and apply the right theories with rigorous methods, and they get results. More importantly, they can reproduce their successes - not because they experienced them in the past - but because theory allows them to observe and explain what is going on, and it tells them what to do next.
|
|
