Quality is almost universally favored, like mom and apple pie—maybe even more so. No one objects to quality, reports Forbes. But are quality efforts linked to corporate performance and the bottom line?
A recent Forbes Insights report, “The Rising Economic Power of Quality: How Quality Ensures Growth and Enhances Profitability,” sponsored by ASQ, concludes that they are. The report explores the results of a global survey of 1,869 senior executives and quality professionals, focusing on the links between quality efforts and corporate performance, as well as the evolving business value of quality. The survey defined quality initiatives as efforts to promote or implement quality, continuous improvement, performance excellence and any related activities.
The research reveals that top-level executives and quality professionals see a direct connection between the success of their continuous improvement or performance excellence initiatives and the success of their organizations as a whole. Close to half of all survey respondents say their quality efforts have resulted in increased profitability and have enhanced important key functions across their organizations.
The research examines the state of quality maturity, and the returns of continuous improvement efforts as measured against the bottom line. More than one-third of enterprises, 36%, regard themselves as “established” quality organizations, meaning quality is pervasive throughout their organization and culture. Another two in five—classified as “developing”—are moving forward with quality efforts, which currently may be spotty. Twenty-five percent currently have ineffectual or nonexistent quality efforts. It should also be noted that within the final group classified as “siloed or struggling,” 5% reported no quality efforts at all.
Key findings include:
Quality has a direct impact on profit growth. Organizations embracing continuous improvement or performance excellence in a significant way are more likely to see higher levels of productivity than those who are lagging in quality efforts. The areas of the business that benefit the most from quality initiatives include boosting customer growth and sales, followed by efficiency gains. Areas most likely to be touched by quality initiatives include operations, customer service and production.
Workforce preparedness and outdated processes are the greatest quality issues faced by organizations. Ongoing quality issues are hurting competitiveness and cutting into revenue. Negative quality issues are also proving to be a productivity sink, taking time away from employees’ jobs. The amount of time consumed with quality issues is rising.
A spirit of collaboration and open communication is more essential to quality success than other initiatives. Stakeholders need to know they can speak up as issues arise, or if they have improvement ideas. While quality encompasses a broad variety of activities and programs, the most common denominators include collaboration and risk management. External forces such as customer demand are pushing quality. Continuous improvement and superior delivery to customers are the top values that define today’s quality efforts.
Quality measurement is widespread, but more data is needed. Less than one-fourth of enterprises have extensive metrics for their quality efforts in place. The ability to obtain the right data at the right time is a continuing issue. Quality data that is available is widely distributed, and a majority of organizations have even opened up such data to their workforces. Customer satisfaction is the metric most often leveraged.
Digital transformation means new ways to approach quality. It makes speed essential in the ability to deliver quality outcomes, as well as to measure and report results.
In addition to the survey, Forbes Insights conducted in-depth interviews with top executives and thought leaders. They note that to succeed, quality initiatives need to be woven into every part of the organization, irrespective of industry. The shift to digital enterprises is bound to transform organizations’ approaches and perceptions of quality or continuous improvement—from a focus on products to more emphasis on brand value, data and software delivery. As of today, there is little consensus on digital, as most quality professionals have not incorporated digital initiatives into their scope of responsibilities.
