Did you know that companies who implement a Quality Management System actually make more money?

Its true! Research by the Chartered Quality Institute and Chartered Management Institute of the UK found that for every $1 invested in a Quality Management System, the company could expect to have a Return on Investment (ROI) of $3 in PROFITS, $6 in increased REVENUE and a reduction of COSTS by $16.

The organisations also found that businesses consistently reported that QM systems had positive impacts on customer retention, customer satisfaction and employee satisfaction.

These qualitative benefits link to the ROI benefit of higher revenues – ie increased customer satisfaction and retention induces consumers to buy more, pushing up revenues. They also link to the ROI benefit of reduced costs. Increased employee satisfaction decreases costs by discouraging absenteeism and encouraging workplace enthusiasm.

Quality Management Systems are not only for the "big end of town" in fact they provide greater benefits and returns for the smaller businesses.

Did you also know that China has the greatest number of 3rd party certified organisations followed by Italy, Germany, Japan and the UK. Australia sits at number 12 in the world for the number of 3rd party certified businesses.

If we look at Quality Certificates per capita we see that Italy is number 1 (220 certificates per 100,000 people), China comes in at number 56 (21 certificates per 100,000 people) and Australia at number 27 (55 certificates per 100,000 people).

Its time Australia to lift your game!

Ben was a high achiever at school and he loved living on the Sunshine Coast where he could surf all year round before and after school. Life was great. Ben's parents were sure that Ben would head off to Uni after high school to do an Engineering degree but Ben had different ideas.

Every morning as Ben headed for the break he would see tradie trucks lined up, some even had custom-made trailers attached. The tradies were taking their boards off their trucks and heading out for a quick surf before work.

Ben decided at that point that he wanted to be a tradie, he wanted the truck and he wanted to stay on the Sunshine Coast and surf every day.

There was no way he was going to "drive the Bruce" every day to Brisbane for work.

After finishing high school, Ben headed off to TAFE and was lucky to pick up an apprenticeship with a local firm who was involved in some major Electrical projects on the coast. Again Ben was a high achiever and was well respected by his peers and supervisors.

After completing his apprenticeship, Ben stayed working with the local firm but as time passed he started to be frustrated by the lack of drive and commitment from management, the poor work ethic of the business in general, the toxic work environment and more than anything, he hated facing the customers who were generally not very complimentary about the way they were being treated and the slow response time.

Ben decided it was time to leave the nest and branch out on his own. He knew he could do to a better job and he wanted to be accountable for the way his customers were treated. Finally, Ben had started to realise his dream and bought the tradie truck and the trailer with a sign stating "Ben's Electrical" in bold letters, he started to build his customer base and life was starting to fall into place.

There were highs and lows in the initial stages of the business but Ben pushed through the barriers and was developing a great reputation for his level of service and customer satisfaction. This led to increased business and Ben was growing but on many occasions developing processes "on the fly".

After a few years of growth and increasing the number of employees, Ben started to feel frustrated with the amount of effort that was required to "juggle all the balls at the same time".

As Ben's business grew he started to notice some changes in the way the business was running and he found himself spending a huge amount of his time redoing work, addressing issues caused by low employee morale and general slackness in the way the employees were operating in HIS business. He was starting to act like the management team of the company he had left and this was not where he wanted to be.

It suddenly dawned on Ben that the reason things were falling apart and why profits were “leaking out of the business” was because he had expectations of his employees doing things the way he himself would do them.

Wrong!

Ben realised he needed to document his procedures and processes so employees would understand the way he wanted things to be done, especially in relation to customer service. But where was he going to get the time to do that?

At about the same time that Ben was lamenting about how he was going to improve the business, to stop the leak of profits and remedy the poor attitude of his employees, a rumour hit the grapevine that a major construction company was hiring subbies to work with them on the new Sunshine Coast "Smart City" in Maroochydore.

Ben did some investigation and realised that this was exactly what he was looking for to grow the business to the next level so he started looking into the requirements to work with the construction company. Downloading documents for the project he realised that they required their subbies to have Quality, Health and Safety and Environmental Management systems. Ben decided that if he really wanted to meet his goals, he would have to make some hard decisions but how would he get started?

He was told by a mate over the weekend that there was a business who could take away the pain and help develop a solution to improve the way he did business and, simultaneously, have a third party certified integrated management system developed and delivered within 8 weeks and the company provided a 100% guarantee of success.

Ben decided it was time to take action NOW so he CLICKED HEREto find out more!

The term Quality Management is a misnomer in that implies that it is purely the domain of senior management. While it is very true that a Quality Management system will not survive without management commitment, one must not forget the role played by the employees in an organisation.

Those organisations that thrive and grow through the implementation of Quality Management understand that promoting competent, empowered and engaged people at all levels throughout the organisation is essential to enhancing the organisation's capability to create and deliver value both internally and to its customers.

So how do we manage an organisation effectively and efficiently?

Firstly, we need to respect and involve all employees at all levels through recognition, empowerment and enhancement of competencies. By doing this we facilitate the engagement of employees in achieving the organisation's quality objectives, increasing customer satisfaction and increasing company profits.

So what can we do to involve our employees in growing our business?

We need to regularly communicate with our employees to promote an understanding of the importance that their individual contribution makes to the overall improvement in business efficiencies and increased returns.

We must encourage and promote collaboration throughout the organisation using such tools as intranet sites, social media (including internal tools such as Yammer) and we must facilitate open discussion (with a no blame policy). Ultimately we must share knowledge and experience across the organisation.

Have you noticed that once you empower employees to make decisions and take actions and initiatives without fear, that performance levels rapidly improve and loyalty increases? This means reduced absenteeism, employee turnover and subsequently reduced costs associated with rehiring and training staff. Imagine how this affects your bottom line profits!

Recognition and acknowledgement of employee contributions, learnings and improvements along with the self-evaluation of performance against personal objectives are pivotal to gaining greater employee “buy in” to you growing your business.

So how well are you going in the development of your employees?

You need to regularly conduct surveys to assess employee satisfaction, then you need to communicate the results to those employees and importantly, you need to take appropriate actions to assist those employees to improve and grow.

So now that you have your employees collaborating, empowered and performing, what benefits should you expect to see?

Typical benefits could, and usually will, include:

improved understanding of organisational quality objectives by employees and increased motivation to use them;enhanced involvement of employees in improvement activities;enhanced personal development, initiatives and creativity;enhanced employee satisfaction and reduced absenteeism;enhanced trust and collaboration throughout the organisation; andan increased attention to shared values and culture throughout the organisation.

Recently a comment was posted in LinkedIn "Sell the Problem You Solve Not the Product" and this resonated with me as I lamented about what pain I am solving for my clients with a Business Management System. Could it be making them wealthy, maybe making them safer or maybe even getting all their staff to collaborate to meet some common goals.

Nope! After weeks of working with my clients and potential clients it has dawned on me that the single biggest problem I need to solve for my clients if TIME - or the lack of it!

It is interesting to ask one's clients what pains or problems they have and 9 out of 10 times they will say, "nah I don't really have any business pains". Mind you these businesses are growing at a phenomenal rate and the reason they contacted us was because they needed to get their business organised to meet the expected growth.

But here in lies the problem! Once they sign the contract for our services, they now have no time available to commit to providing the data. Now I could say "No Problems" and just deliver a compliant, populated system that would meet the needs of the auditor, looks great and certificate on the wall BUT there would be no ownership by the owner or indeed the employees within the business.

This is NOT WHAT we do!

So how do we provide our services, deliver our product, gain ownership, change the culture and do so without physically tying the owner and stakeholders to a chair and forcing them to be involved?

I know there is an answer "blowing in the wind" - somewhere! Love to get some thoughts on how others solve the "non-existent" pain point called TIME!

Today I had the pleasure of listening to Mr Lindsay Pears (Defence Envoy) for the Queensland Government give a presentation to Sunshine Coast businesses on what the release of the Defence White paper means to Australian industry.

Throughout the presentation it was obvious that the construction industry is going to be a huge winner from the latest Defence stance. Major construction will be occurring throughout Australia to meet the growing Defence Capability requirements. Of interest to Queensland construction companies is the amount of work coming your way in Queensland. Projects at Amberley, Enoggera, Rockhampton, Townsville and Cairns are going to have savvy construction companies maintain a full booking schedule of work.

There are many construction companies who will, however, fail to benefit from the huge wave of work because they are not prepared and not eligible to subcontract to the larger primes.

So what do these companies need to do now ... today ... to place themselves in the box seat for this avalanche of potential work?

They need to develop their processes and procedures to prove they can deliver quality products and services. Easily said but harder to implement especially if your business is on a growth path and you currently don't have the time to scratch yourself.

There is a solution! Its called an Integrated Business Management System requiring minimal input but providing maximum outcomes. Check out the Defence White paper

Ok so in Part 1 we looked at the perceptions many business owners have when it gets down to implementing a Quality management system, or in fact any management system. We also started to look at the hidden realities and particularly those associated with management commitment and empowerment of the people.

So, what now?

Your staff will play a vital role in your success or failure when it comes to Quality. As a manager it is imperative that you lead by example, show your commitment and provide the resources and support to assist your staff as they transition the inevitable culture changes.

When committing internal staff to implementing a quality system, a number of factors need to be taken into consideration including the level of knowledge regarding quality management, the disruption to productive work, the cost of wages and the ability to develop policies and procedures. Even simple things like who has the skill to write procedures using Microsoft Word can be "show stoppers" when trying to implement a system.

How do you go about implementing YOUR system?

You have a few choices here including outsourcing the activity or doing it totally within your company. Don’t be surprised when you realise that the internal costs may be as high, or even higher, than hiring a consultant!

While outsourcing the activity is seen as a better way to go, organisations need to be mindful that generally consultants don’t know your business as well as you and consequently will be utilising the resources and experience of your staff. If you thought outsourcing the implementation of a Quality system will free your organisation of the burden, think again. You and your staff have to embrace the Quality culture and that will only come from being actively involved in all steps of the process.

Does it matter how long the implementation takes? Remember here that extended time means reduced enthusiasm and motivation to push forward.

Many organisations have a very optimistic view on the timeframe required to build a compliant Quality Management system, however as days turn to weeks and weeks to months, with very little obvious progress, enthusiasm tends to wane. It is imperative that someone takes ultimate responsibility for developing an implementation schedule and manages that schedule with an "iron fist".

What do you and your staff know about Quality?

The biggest problem most organisations face when they embark on the Quality journey is understanding the intent of the International Standards Organisation (ISO) standards and knowing exactly where to begin; itself a daunting task! I can here you say “ah it can’t be that hard to read the standard and then build a compliant system, can it?”

Once the Quality System has been developed, the organisation needs to audited both internally and externally by a 3rd party auditor eg SAI-Global. This audit is a two phase process; phase one to determine suitability for accreditation and phase two being the actual accreditation audit. Management and staff need to be "Quality cultured" if the organisation is to be successful and this culture takes time to be instilled into a business.

So you have decided to go for a Government tender but you require a Quality Management System in place because of the high value of the contract or perceived high risk! You ponder for a bit and then decide “yep I’m going for this”, but what is involved? In this two part article I will take you through the perceptions and the hidden reality of implementing a Quality system. Part one will focus on the perception and what is required of management while part two will concentrate on the resources and timeframes to be considered.

The Perception

The initial perception is that surely it can’t be that difficult, I mean I know there may be some extra costs involved such as consultant fees, maybe wages for a dedicated Quality Manager, purchasing of the Standard, tools and software, auditing and finally the cost of the certificate itself. These are the visible costs!

Ok so now how much time should it take? One month, two, twelve! Surely enthusiasm and my expectation that everyone in the company will get behind us, we should be able to knock this over easily in less than six months. Let’s face it, we are only documenting the processes and all our staff are experienced in the operations of the business and they should be able to read the Standard and apply it to our business. This shouldn’t have too much of an impact on our workload, I mean we are all committed to success.

The Hidden Reality

Unfortunately the gap between the Perception and the Hidden Reality is huge and difficult to comprehend unless you have had the opportunity to experience the process of developing a Quality management System from within. Hopefully I can shed some thoughts on what you should expect as you take the path to quality.

Firstly management will need to decide who will be the best person to embrace Quality and be able to champion it across the organisation. He or she will need to be able to manage both Management and worker expectations and have the strength and authority to drive the implementation. This person should hold a reasonably senior position in the organisation and have a good understanding across all areas. Ideally this person will have a great rapport with both senior management and the shop floor employees.

When implementing a Quality System, the expectations of management may vary, dependant on the amount of output being generated by the business. Typically when the business is flat-out and all resources are on deck, there is a reluctance to commit to Quality implementation.

Further considerations could include experience levels. Has the Quality Manager or Management had experience in implementing a Quality system? Are they aware of the intangible obstacles such as staff cultural impacts or financial constraints placed on the organisation? Additionally, the workload associated with this activity can’t be understated. Can you afford to have key staff taken off-line for a number of hours a week over a long period, say 18 months?

And the BIG question, are you as the manager committed to implementing the Quality system because, without that commitment, the activity will always take second place to work and productivity expectations?

Read Part 2 in the next issue where we will look at resources and timeframes.

If I was to ask you, “What is Quality Management?” would you answer:

A highly-regimented, bureaucratic quagmire that imposes excessive procedural requirements on an organisation, entailing the documentation of every single aspect of its operation.An artificial “box-ticking” exercise that is a necessary evil in order to obtain a precious ISO9001 certification to allow an organisation to compete for tenders from Government and Large Companies (and which results in all of the Quality documents sitting on a shelf gathering dust once the certificate is received?).An expensive distraction from your core business, consuming precious money, time and resources with little tangible benefit.

What if I were to tell you, that it’s none of the above? That instead, Quality Management has been saddled with an unfair reputation and when implemented correctly – not only save time but serve to support and even fuel the growth of your business.

Let’s explode some myths.

Myth One: Quality is a bureaucratic nightmare with excessive documentation requirements. If implemented badly, it can be, but can’t the same be said for any aspect of business?

Whilst there are many horror stories of small businesses filling bookshelves with unnecessary documentation, a good system will tailor these requirements to suit the size and complexity of the organisation.

The fact is, even if every activity the company performs is documented, without the right people it is unlikely that the organisation will run effectively, efficiently or even consistently. However, by concentrating on capturing key business processes, the Quality System can ensure that these are streamlined and understood clearly by everyone in your company.

Hence the Quality System supports the efforts of your employees and provides product consistency to your customers.

Myth Two: Quality is an artificial box-ticking exercise. Whilst it is true that many large companies and government agencies require their suppliers to have an accredited Quality System, the actual certificate is simply a nice piece of paper to hang on your wall. This certification is a by-product of the larger benefits offered by this process.

When implemented properly a Quality System improves the consistency of your company’s outputs (customer benefit) and provides a mechanism for monitoring and continuously improving the way you operate (company benefit).

Myth Three: Quality is an expensive distraction from your core business. If anything, it is the exact opposite. How much of your day is spent on administrative issues that take you away from doing the creative, value-adding activities in your business that you love to do? A good quality system that is tailored to your business should reduce the time you spend on these trivial, yet critical activities.

By optimising processes, integrating best-practices from across the company, and reducing customer complaints and re-work a Quality Management System will also reduce your expenses, thus increasing your profit margins and ultimately delivering you more cash in the bank.

So there you are, hopefully I’ve done my bit to clear the good name of Quality Management!

So what are the hidden costs associated with implementing a Quality Management System? Stay tuned ....