The environmental and social agenda is expanding the scope of what it means to be good or excellent for organisations, and balancing the customer value with value for society. At the highest levels in practice, we see sustainability driving organisations to innovate new products and business models, however, the foundation for sustainability is simply doing the right things right, every time.
Disasters provide narrow but useful examples on the link between quality management and sustainability at this foundational, do no harm level, demonstrating what happens when basic quality management culture and practices are absent.
The 2008 global financial crisis
Halifax Bank of Scotland (HBOS), a banking and insurance company, was one of the UK’s most high-profile victims of the credit crunch, requiring a takeover and billions of pounds in government bailout money to stay afloat. Paul Moore, former head of group regulatory risk at HBOS, old CQI’s Quality World that if the financial sector thought in terms of quality rather than compliance, positioning culture and people above profit and structure, the events leading up to the crisis could have been avoided.
Deepwater Horizon oil spill
This was one of the biggest environmental disasters in US history. The explosion in 2010 killed 11 workers, and spilled millions of barrels of oil into the Gulf of Mexico. As a result of this environmental and human carnage, BP paid over US$4.5 bn in fines and payments. The cause was found to be a quality management failure as contractors failed to test the cement around the oil well, which failed and allowed flammable gas and liquids to flow up.
The Hatfield crash
This railway accident, which happened in 2000 in the UK, was caused by a metal fatigue-induced derailment, killing four people and injuring more than 70. The accident exposed major shortcomings with reports that there was a lack of communication and staff being unaware of key maintenance procedures.
There are two common methods to avoiding simple operational failures that impact not only your reputation and bottom line, but customers, staff, wider society, and the natural environment.
- Cross your fingers. This method places your trust in hope that people will always do the right thing. Even when your organisation is certified to a voluntary standard (for quality, safety, security, environment etc) you may still use this approach if you see responsibility for doing the right thing as the domain of a third-party assessment body and not that of the management.
- Lead good operational governance, assurance, and improvement. This method places your trust in leading people within a system that defines how work is to be done and puts in place controls to mitigate risk of failure. It embraces a system of assurance that helps you understand how well your organisation is performing – valuing external, third-party assessments as part of your total assurance landscape. And it encourages a culture of measurement, learning and improvement which addresses threats and drives performance.
The good news is that, if an organisation is interested in the second method, the quality profession can help them lead a management system that will not only help protect its reputation, society and the planet (do no harm), but also provide the foundation for innovation that will help an organisation sustain by creating better and better value for customers and society.