LNS Research explores 5 significant key takeaways from the 2015-2016 Metrics That Matter joint study between LNS Research and MESA International.
Although quality is an enterprise-wide issue, many companies struggle in defining how it fits into overall corporate strategy. The 2012-2013 LNS Research Quality Management Survey put this into perspective when it asked executives what their top quality challenge was. More than 50% marked off having difficulty with the way quality was viewed in their organization. They said it was looked at as a department rather than a responsibility.
When quality management is perceived in this manner, efforts to improve the quality of products and processes tend to be localized rather than across the organization. In many cases, it’s the quality structure within the organization that enables the ability to manage it holistically. However, when corporate leadership tries to change this perception, it can be met with considerable pushback at the regional, business unit, or site level.
To find out more on this topic, we had a conversation with a leader in the field, KP Lim. We asked him about his experiences with the centralization versus decentralization of quality while working as the Chief Quality Officer (CQO) at UTStarcom and various other large electronics manufacturing organizations. The following is an except for our interview.
LNS: In your experiences, which quality group structure works the best?
KL: Decentralization tends to happen if the business model is very big where different groups would have various approaches to quality. In some cases, it’s even more appropriate than a centralized structure. But with decentralization, there’s typically a loss in quality. You lose strategic direction for quality and where it’s going, which is why a company will have corporate quality initiatives, metrics, and so on, to oversee some aspects of quality and make sure it’s on the right track. In my opinion, there’s no right or wrong, it depends on the scenario.
LNS: What happens when you try to change the quality structure of an organization?
KL: When I joined my last company, there was decentralized manufacturing quality, R&D quality, service quality, and so on. Everyone had their own quality functions and responsibilities. However, the customer wanted us to have a company-wide approach to driving quality, so we restructured in a way that all quality would report into the Chief Quality Officer (CQO). Initially, there was no centralized quality structure, so naturally there was a lot of internal friction with the new approach.
LNS: How do you address and overcome internal friction?
KL: When there’s a change, it has to be proven. Because everyone was reporting to me, I worked to make everyone think that quality was important. I wanted to let them know that if they shipped something out the door, it’s going to have an impact, positive or negative, and that impact will come back and affect the company and them personally. I collected data on cost of poor quality, and once I did that, people started taking ownership. It wasn’t just that the customer demanded it anymore, people also started enjoying benefits of improved performance.
LNS: When you centralize quality like that, do you leave room for any flexibility?
KL: What we found is that every division was doing its own thing and didn’t want to be standardized. In response, we standardized just a few critical things, and then left flexibility to each local site. This helped to preserve culture and reduce pushback. When leaving room for flexibility in how to do a process, you allow people to participate and that’s what gets ideas flowing. It’s what motivates them to say “I’m not just doing it because people told me to.” Instead they take ownership. As a quality organization, you need to be looked at as a solution provider, not as the police telling people what they can and cannot do.
The Quality Police versus the Solution Provider
When it comes to quality management strategy, it’s no surprise that people can be resistant to change. In many cases, they’re set in their ways, but internal friction can also arise because they’re apprehensive about being held more accountable for the quality of products and processes. When dealing with the issue of local versus corporate quality, KP Lim makes a number of good points, most notably about being a solution provider rather than the police.
With considerable internal friction, he had to find innovative ways to both preserve the culture unique to sites while also generating a broader interest in and ownership of quality from the enterprise perspective. By standardizing select areas and recording the cost of poor quality in a way that helped to highlight areas for improvement, he was able to instill a culture of greater responsibility for the quality of products and processes.
Do you have an interesting story regarding internal friction and quality culture? If so, we'd like to hear about it in the comments section below.
You Might Also Be Interested In:
All entries in this Industrial Transformation blog represent the opinions of the authors based on their industry experience and their view of the information collected using the methods described in our Research Integrity. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.