Vince Desmond, the CQI’s CEO, looks at the importance of considering the difference between cost cutting and chasing efficiencies, and how leaders can create a core system so that their organisations can do it right, do it better, and do it right first time.
You may hear governments and organisations announce that ‘costs must be reduced’ or ‘economies must be found’. Often, however, these phrases are used when competitiveness and productivity are being overlooked, and cutting costs are prioritised over improving value.
It seems to me that leaders and policy makers too often refuse to consider the simple idea of how work is done. They’d prefer to focus either on grand, top-down management plans to ‘transform’ how people do work, or simply chop cost.
The cost of getting things wrong
The quality management community generally considers that an organisation that does not measure the cost of poor quality work is potentially losing up to 30% of its cost base by doing things inefficiently and incorrectly. Take, for example, the construction industry’s Get-it-Right campaign which has found that up to 25% of the cost of projects is consumed simply by getting things wrong. Removing that waste will not only make our construction sector more competitive, but create better value for customers and the environment.
And this is not simply a private sector issue. The UK 2008 Darzi Report, High Quality Care for All, was founded on the principle that improving the quality of care for NHS patients is both beneficial for patients, and offers better value for money for the taxpayer.
Creating the right environment for quality
There are two simple tricks to achieving this organisation-wide shift. The first is putting in place the right environment and equipping people with the tools to evaluate how work is done and to improve. The second is not to treat this as a one-off campaign (‘this year we are improving quality’) but as a way of doing business. Leaders set the tone. Quality professionals offer these easy-to-use tools.
The role of policy makers and leaders is to lead the core system of creating value for customers, and to unleash the innate human desire to do the right thing, to do it right and to do it better.
The rest relies on the very nature of humans. The vast majority of people go to work to do a good job. Most have an appetite to do it better. In fact this is a human trait we see in our daily lives, not just in our work. I see this in my teenage children who have perfected the process of getting up and arriving at school in the most effective and efficient way, ensuring they meet the strict requirements of school for smartness, homework and so on. Small improvements are made to allow precious extra minutes in bed or to video call friends.
This lack of focus on business process improvement goes to the heart of national strategies. The UK industrial strategy worries, amongst other more political things, about UK productivity, although interestingly not competitiveness. In response it focuses on investment in innovation, research and development, skills and digitalisation. All good stuff, but not a word about the main challenge: improving the efficiency and effectiveness of work. Simple quality tools combined with the leadership to empower people to improve business process has the potential to reduce huge amounts of wasted effort and resources, improve outcomes for customers and thereby improve productivity and competitiveness.
Leaders have little visibility over how well work is done and what happens between the cells on a spreadsheet, but a huge impact in setting the culture and tools for doing work well and improving. The role of policy makers and leaders is to lead the core system of creating value for customers, and to unleash the innate human desire to do the right thing, to do it right and to do it better. To do otherwise is a waste and misses a key component in the productivity and competitiveness puzzle.
Read more on our World Quality Week 2022 theme, 'Quality conscience: Doing the right thing'.