I have worked with Lean Six Sigma and quality in business my entire career. I have always believed that “Quality Expectation” was a uniform and consistent goal that all organizations strive to achieve.
But, most of my experience has been in larger companies which had biased my view, which I have recently realized. I now know that quality is quite different in a smaller organization than a large one. This realization allowed me to understand all of the struggles that I experienced in a large company when working with smaller suppliers on quality procurement.
Every single organization has the same high level quality expectation. It is focused on how the customers view the quality of their product/service. The real expectation difference is how you manage to achieve this quality. This is the expectation that I am writing about.
Large Company Quality Expectation
In large companies, we find large quality departments. These departments work on things such as ISO certifications that focus on good procedures, consistent execution, solid employee training programs, compliance, routine auditing, and other formalized and widely recognized methods to manage quality. Big companies may commit 1% to 5% of their staff to a quality function. In one company I worked, the quality/compliance department had equal staffing with the operations department. I think it was a bit extreme, but it was part of the nuclear power industry. With my team’s LSS work we cut the quality/compliance staffing by 50% and improved their performance but it still ended up with a lot of people in the department.
Large companies have a quality with executive level influence. They write detailed procedures for nearly every value added process in the organization. They manage a document management system to ensure all of these procedures are kept up to date. In many organizations, they also manage the performance reporting efforts and other performance auditing efforts. There is procurement quality to manage, that involves supplier interactions and visits. The quality department is also a common place to report the continuous improvement efforts, such as Lean Six Sigma. In my observation, the Quality Department is created as a counterbalance or counter force to the Operations Departments and Executives to make sure that the organization does not sacrifice quality to make money. In most big companies there is a subtle power struggle between “Doing it right” and “Doing it now.”
Why does a large company create such a quality organization, I believe it is to relieve the executives from managing day to day quality and delegate it to the quality department. The quality department becomes the conscience of the organization.
Small Company Quality Expectations
Real small organizations do not have a quality department; quality is assumed to be part of everyone’s job. In mid-size companies the quality department is one or two people that manage audits and compliance. In both of these organizations you will find a completely different view of quality execution. There are not detailed procedures written for all of the value added processes. They cannot afford the expense to pay someone to write them all and to keep them current. The business needs to rapidly change to fit their customer’s needs, so the procedures are not stable either.
In these organizations, there is not a strong auditing program because the requirements vary based on customer differences. Most product/services are not performed continuously; everything they do is in small batches or short term efforts. SPC, data based performance reporting, and other methods are not in use because most efforts are one-off or not like prior work so the only data based quality is to make check compliance with customer requirements on the outcome of the process or service.
Smaller organizations replace a lot of the functions we relate to a big company quality program with the hiring of higher functioning employees and a lot of vertical and horizontal communication of performance and requirements. In other words, the smaller organizations replace a quality department with an informal quality program managed through an informal structure of shared responsibility. I view the small company quality programs to be similar to sports teams. The staff is small enough that the leadership is able to directly interact with the employees and is able to appeal to them as a person. In the end, quality is achieved because no employee wants to let the others down. Like a team, an honest error is understand and will not reoccur, because the employee feels a bit of failure to their peers that they do not want to feel again. The other employees fully understand the failure and do not want the next one to be theirs.
What are the real quality expectations?
In both the large and smaller organizations, the concern for quality is real. It is also important. But is the quality expectation really different? The quality expectation in both conditions is the same at the highest level; “Provide the customer a product/service that they judge as high quality.” The real difference is how they go about provided a quality product/service. In some cases, you define a standardized process and then enforce consistent execution. In other cases, you appeal to the employees to get it right and to do what is necessary to provide the customer a quality product/service. It is clear to me that both methods can be successful. If you look at many big organizations, you will find pockets of what I described as small organizational quality management in areas like development, research, and small scale efforts.
How do you know what is right for your organization?
I have recently worked with a mid-size client that was trying to build a large company quality management system found in a large company. The leadership decided they had grown enough to have a quality department so they hired some big company quality leaders and set off to build a traditional quality department with audits, procedures, a QMS and all. Guess what, it lasted about a year and then the support fell off and it is almost gone a year after that. What happened? In my view they were no financial benefits to the new quality execution method. They did not have any clear quality problems in their business process execution. They had great employees who had pride and you could trust them to do it right.
Here at Smarter Solutions, we discuss this topic a few times a year. Do we need to document all of our business processes? How much performance reporting do we need? They are great discussions. We have ended up building documented processes in the areas that there is routine staff turnover so that the next employee is productive quicker. We have documented processes where one of us may need to step in to backup a task we do not normally perform. We only monitor performance in the areas that we have recognized a clear causation to our business success. This is our balance, which works for us. Will it work for others? It depends.
As I talk with this subject with my peers, we have tried to figure out where the transition occurs from small to big quality execution changes. The best test on when you need to begin the transition from the small organization employee based quality to a large organization documentation based quality is when the leadership is unable to change policy by just standing on a table and saying “listen up, here is our new issue and we need to do xxxx.”
I know this is an unrealistic way to identify when change is needed, but in some sense the need to change the quality execution method is when the individual employees do not feel a direct connection with the leaders and to the company.
More on quality in a prior blog: Customer quality is different from internal quality