Measuring Change – Changing Measures

What you measure… is what you get. And only if you measure, can you plan, control and improve your quality.

Until a decade ago, measurement was confined to product quality. In other words, sorting the good from the bad. Product inspection at multiple stages of a process was institutionalized. Effectiveness was achieved, inefficiently… at any cost.

The first awakening came with the discovery of a new alarm system… the cost of poor quality. In any process, be it manufacturing or non-manufacturing, the cost of poor quality is estimated to be a third of total costs. These wasteful costs are locked in the budget. Legitimized. Unearthing them demands measuring, for key processes, internal failure costs, external failure costs, appraisal costs and prevention costs. The focus is on efficiency. Some organizations have prospered by relentlessly measuring cost of poor quality. A select club have saved in excess of Rs 2,000 crores.

Soon after, with the liberalization of the Indian economy, competition surfaced as a force. Effectiveness was threatened. The issue: Could we afford to efficiently manage ineffective offerings?

It is well known that competition pampers the customer. It is also realized that quality is defined in the marketplace. Customer satisfaction with features and customer dissatisfaction with failures requires measurement. Particularly since customers are prone to change their requirements without prior notice. Creating a customer focus for management requires a series of changes in measurement, companywide. These measures are in addition to the cost of poor quality.

The required measures to establish a customer focus are: benchmarking gaps, on-time-delivery, cycle time, mean time between failures, mean time to repair, customer satisfaction index, employee satisfaction index, supplier process capability and so on. To orient, management requires a change in paradigm from vertical functional thinking to horizontal process thinking. The best available route for this switch is internal or external assessment against the CII Exim Business Excellence Award criteria or the IMC Ramkrishna Bajaj National Quality Award criteria. The feedback process is a powerful measurement tool. Some companies have gained through this herculean endeavour.

For any organization, winning a national quality award should not be a singular objective. Absorbing the principles of the related criteria and systematizing the required infrastructure is a more permanent, robust and reliable approach. This requires building a high voltage quality management system. In addition, it requires measurement of performance, element by element, for all the eighteen management elements defined in the International Quality Rating System. The cumulative impact is an overall rating for the quality of management performance. This is a sure way of attaining a world class vision, with balanced and economical effort. Some determined companies are using this measurement system to cross milestones, on a journey of 10 levels, to attain their vision. They are also using the tool to compare, and benchmark, divisional performance.

Finally, as you measure, change may create only a simple reaction. Restore performance to the standard. Alternatively, it may be the basis for proactive quality leadership. The role of measurement in managing change is critical but often overlooked or inappropriately delegated. It goes to the heart of organizational success. It is only through measures that organizations can learn. It is only through learning that they can create value in an ever-changing world. And it is only through creating value that they can survive and prosper.

But then, according to Prof. W Edwards Deming “ You need not do all this, because survival is not essential”.