Archive for May, 2011

Commitment to Improvement

May 16, 2011 Leave a comment

If we are to improve our performance, we need to be able to record all problems encountered, as a first step to working out how to eliminate them. In IT this is understood well in terms of code – defects are always logged and tracked, but maybe we are not so good at identifying or remedying procedural failings.

In a BBC In Business podcast (30/12/2011) about Ford and how it turned its financial performance around, the CEO Alan Mulally told an anecdote about the secrecy culture he found when he took over. He recalled how a worldwide review of operations showed RAG status as green everywhere even though the company was losing $17Bn.

It made me think how often a company will claim to be quality focussed, yet seeks to hide problems. If you conceal everything, how can you know what to correct?

When I started my working career, I worked for a road haulage company specialising in chemical tankers. The Big Thing at the time was Total Quality Management and a survey of its customers had indicated that many were prepared to pay extra for high quality service (for example, some customers receiving high-value products could see the cost benefits to them of in Just-In-Time delivery). Indeed, some of the bigger oil and chemicals firms were starting to insist on their suppliers having BS5750/ISO9002 qualification so my employer embarked on a project to attain it to differentiate itself in the market.

One key tool was the Non-Conformance Log. Any late delivery (or anything else that wasn’t supposed to happen) was noted, whether it was our fault or not. Senior Management encouraged non-conformances to be recorded, on the grounds that you couldn’t improve if you didn’t know what was wrong. In fact the depots under the most scrutiny were the ones with the fewest entries. There was a genuine commitment to quality, and improvement.

A couple of years later I left that company and joined a competitor with a totally different culture. Instead of going for a high value add, it was expanding market share and wasn’t bothered how it got it. Like the company I had left, it had all the required quality accreditation (by this time all the big chemicals manufacturers demanded it), and its publicity made the same outward commitment to quality. In due course (naïvely) I recorded non-conformances in the log as was my habit, and it wasn’t very long before the manager told me bluntly that under no circumstances whatsoever was I to record any non-conformances that were our fault, unless there was a complaint, because he didn’t want anyone asking any questions.

So, there were two companies, apparently working to the same standard. One was completely committed to it in word and deed; the other viewed it simply as a badge it had to have to do business with some of their clients, doing the bare minimum to attain and retain it. Yet from outside, it would have been impossible to tell the difference.

I wish I could report that my first employer reaped the rewards of going for the high value end of the market, but as soon as a recession came along most customers ignored everything except price, and it kept losing business. Eventually the company was merged, and broken up, and doesn’t exist any more. Having said that my second employer fared little better; in the race to the bottom it found that somebody else was always cheaper (illegally) and eventually lost too much money, and was merged into other parts of the holding company (which still does exist, but now does very little business in this sector).

For me, this was a useful early lesson that what managers say, and what they do, can be very different things.

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