Thoughts on Top Management and Quality Management

 

Thoughts on Top Management and Quality Management

How do members of top management know about their responsibilities as far as quality is concerned? This is a very valid question. The easy answer is that they should know, since it is in the best interest of the organization that they are managing and leading. But really, how are they supposed to know? Philip Crosby in his book “Quality id Free”, hits the nail on the head when he states that part of the job of top management is to make certain that all parts of the job of management is to make certain that all management functions must have the opportunity to perform their responsibilities , also as far as quality is concerned. He further states that the problem is that most of the people arrive in top management positions by making their way up through a single division of the organization, such as finance, human resources, engineering, operations, etc. These are limited, specific functions, and these people may not have any idea about overall quality. They may not realize what has to be done to achieve quality throughout all the functions and levels of the organization. The worst case scenario is when they feel, mistakenly, that they do understand what has to be done, and these members of top management will cause the most harm.

The best solution to this problem is that top management should be instructed and trained about the quality component of their jobs. Easier said than done in many cases. They do not have the time. 

The concept of quality is so wide, and our grasp of what quality really entails is so narrow in so many cases. Often top management will leave quality to a single person or team in the organization that has been specifically tasked to “look after quality”. These people have the responsibility to ensure that quality is “embedded” in the organization. Often those people will also receive some training, but not the rest op top management. The rest of top management would prefer to have as little involvement as possible in quality, so that they “can get on with managing the organization”.

Interestingly enough, when top management uses this approach, they expect to see quality assurance, quality control or inspection programs, or a combination of these. Needless to say, although these techniques will yield positive results they have some serious shortcomings.

Inspection programs are reactive. They are used to separate the good from the bad. Money has already been spend processing the bad, and this also leads to additional costs in the form of reworking, re-manufacturing, etc. Inspection forms part of quality control. Inspections can provide information about problem areas, if management is willing to take note of these.

Quality assurance is a way to prevent mistakes in products and services. ISO 9000 defines quality assurance as:  “part of quality management focused on providing confidence that quality requirements will be fulfilled”.

Quality assurance is thus much more preventive, rather than reactive, but the problem here is that it is still very product and service focused. Will it benefit the organization? Just as with quality control and inspection programs, definitely yes. Less defects in products and services certainly impacts the bottom line in terms of savings on the costs of bad quality. Sending defective products to the customer can also result in financial loss due to a loss of customer goodwill, and thus a loss in market share. 

If we think about sustainability of the organization and about risk-cased-thinking, something is still missing, despite the application of traditional quality such as quality control and quality assurance. We miss the fact that quality has everything to do with the economic sustainability of the organization. The application of risk-based-thinking at the operational level means that we assess our processes to find out where there is risk that something could go wrong. This brings us to an operational quality risk assessment. We look at our processes. equipment, materials, procedures, etc. and try to establish what would cause things to wrong, and then we apply controls in the form of quality assurance and quality control. This is all very tactical, focused on the short term, and thus hardly in the domain of top management, other than to keep them informed. We are trying to prevent defects, and, in the second place, prevent delivery of defective products and services.

All the operational controls to manage our quality risks are very good, with great benefit to the organization, but there is another dimension that should be considered as well. The concept of sustainability of organizations to ensure its future survival has received a lot of attention in recent years. The King IV report on corporate governance tells us that organizations must be sustainable in the long term (20 – 30 years). This makes sustainability very much a strategic issue. Sustainability is further defined in 3 categories, economic sustainability, environmental sustainability and social sustainability. Enter the traditional ISO management system standards.  ISO 9001 (quality management system) has everything to do with economic sustainability. ISO 14001 (environmental management system) has all to do with environmental sustainability (and partially social sustainability). ISO 45001 (health and safety management system) has everything to do with social sustainability (and partially environmental sustainability). The three standards are very much interlinked, especially from a financial point of view, since all impacts on the financial performance of the organization, especially when things go wrong.

Let’s go back to quality and quality risks. ISO 9001:2015 requires in clause 4 that we assess the context of the organization. The requirement is that we will assess the internal and external issues that can impact on the strategic objectives of the organization, and the planning of the quality management system. This requirement also appears in the other management system standards published by ISO. It sounds a bit vague, so what does it really mean?

We are required to evaluate the organization and its context. We need to define the influences of the various elements on the organization, as well as how they will affect the quality management (going back to quality management in terms of top management specifically). We need to think of company culture, objectives and goals, complexity of products and services, flow of processes and information, size of the organization, its market share, customers, competition, political and social issues, economic climate, strategic planning, etc.

If we look at quality from this point of view, we see that operational risks and issues are certainly included in the context, but there is another dimension, organizational risks, which must also be controlled where possible, or at least managed where control is not possible.

In summary, top management really needs to drive quality in the organization through the quality management system (or integrated management system, which includes quality, environment and health and safety).

Quality is a strategic issue in the organization, as well as a tactical issue. We need to set strategic goals and objectives for the organization considering its context. Then we can set tactical objectives to guide us along the way so that we will be able to achieve the (realistic) strategic goals and objectives for the organization.

I think this makes it clear that top management must be involved in quality management. It is therefore essential that top management receives training and information on their role in the organization as far as quality is concerned. After all, they provide leadership and direction for the whole organization, and they need to understand what is required on an organizational level. Operational risks can be managed by persons in the various disciplines of the organization, but once again, they need training to enable them to so effectively, just as top management needs to be trained.

For more information or assistance, please feel free to contact me at koosgouws10@gmail.com, or visit our website at www.sheqmanagementsystem.co.za.