The term sustainability can have many different interpretations, especially in business. However, for the CQI, its meaning is simple. Companies with a sustainable approach meet their needs without compromising the needs of their customers, stakeholders or our planet. Sustainability is embedded in their corporate culture. It is part of their values. And it is supported by a robust quality management system.
Now, more than ever before, there are so many reasons for organisations to embrace sustainability. These range from attracting investors to achieve growth ambitions to meeting customer expectations and increasing satisfaction. When it comes to the quality of products and processes, sustainability is becoming more and more critical, so too are quality management principles and methods.
Next frontier for quality management?
In 2019 the CQI interviewed several national quality bodies and asked for their thoughts on the quality profession’s future opportunities and threats. The digital shift came out as a hot topic, and everyone agreed that finding new ways to create customer value is central to this.
Our experience of the pandemic in 2020 and of changes in global trading arrangements has rebalanced our focus:
- Supply chains and operations have seen a shift from efficiency to resilience and ‘Just-in-time’ to ‘Just in case’ - at least for now
- The ‘Need for speed’ has underlined the value of rapid, lean innovation while also reducing risk for customers and society
- The World Economic Forum’s 2021 DAVOS meeting highlighted the increasing importance of sustainability not just at a policy level but within business too
The European Organisation for Quality (EOQ) has also laid down a challenge with its 2021 World Quality Week theme: Quality: the next frontier.
Sustainability – an agent for change?
I mentioned earlier that organisations are facing many drivers for sustainability, which include:
Customer attitudes and behaviours to sustainability are complex. On a business-to-business level many organisations are keen to associate with partners and suppliers that behave ethically and sustainably. They are also fast to act when there is a problem with those suppliers.
Take, for example, the fall of British PR company Bell-Pottinger which was rapidly abandoned by its clients after a scandal hit in 2017. The psychology of how we behave becomes trickier as we try to balance making the right choice with cost considerations. As the playwright and poet Bertolt Brecht said, ‘Food comes first, then morality’.
Driven by legislation and consumer expectations, UK retailer Tesco removed 20 million items of plastic from its products over Christmas 2020. The fact that their public statements on this were made by their quality director underlines how sustainability is increasingly critical to quality. It also shows that innovation can help consumers to act in line with their values.
The UK’s 2020 Environment Bill includes reducing consumption of material resources. Alongside this, the UK’s Green Alliance is lobbying the UK government to consider rewarding extended product warranty periods with tax breaks to help reduce waste. If this becomes law, economies, sectors and organisations that are innovative and good at managing reliability will win.
In 2020 the UK’s Stewardship Code was introduced, adding more responsibility for societal impact and corporate behaviour to company director accountabilities.
At the international level, ISO is developing a new Corporate Governance standard. The new standard, to which the CQI has been contributing actively to via our liaison status, places more emphasis on sustainability. Of course, the quality management system allows the board to understand the voice of the stakeholder and build strategy and policy into ways of working. In fact, this is an example of the type of operational governance that the CQI worked on with the UK’s Institute of Directors.
Investors in sustainability
As we know, investment decisions can make or break a company. Today, those decisions are increasingly being based on sustainability considerations. Many people will be aware of US billionaire Larry Fink’s call to CEOs to focus on the long-term business sustainability and social and environmental sustainability.
It is also interesting to see Blackrock sustainability staff being included in US President Biden’s emergent team. Equally, the Germans have always been good at distilling concepts. The term ‘Industry 4.0’ has its provenance in Germany which has long said that ‘Green’ (good environmental behaviour) = ‘Green’ (more profit). Investors agree, and the literature on the business case for sustainability in publications, such as Havard Business Review, is growing.
We’re already seeing sustainability creeping into quality standards and models that customers may recognise or require:
- The new EFQM model references the United Nations Sustainable Development Goals
- ISO management system standards embrace the concept of ‘interested parties’
- ISO itself has a focus on sustainability
- Bcorp has introduced new voluntary standards to sector ethical supply initiatives, such as in the toy industry
Critical to quality
The trend appears to be that a quality product or service must be sustainable as well as economically viable, useful, available and safe. Equally, a quality organisation is one where sustainability is truly critical to its processes, from ethical supply to environmental impact.
Organisations are free to make their own strategic choices on how they position themselves competitively. However, environmental and social sustainability is moving from being a PR exercise to being at the core of values, value propositions and business sustainability.
Today’s quality is tomorrow’s sustainability
Because sustainability is a big issue, health, safety and environmental management communities are all focusing on sustainability. The UK’s Institute of Environmental Management, for example, is using the strapline ‘Transforming the world to sustainability’.
Yet, in the same way that today’s quality is tomorrow’s safety, we can also say that today’s quality is tomorrow’s sustainability. The worst that can happen is that professions compete rather than collaborate. So we must engage with our peer professions to make the most of our competence and expertise.
With that in mind, the Union of Japanese Scientists and Engineers (JUSE) is conducting a review of Total Quality Management (TQM). TQM in this context sees quality as creating value for society and customers through ESG (environmental, social and governance). This underlines that the principles and methods of quality management are relevant and useful to the sustainability agenda for organisations and society.
And in the January 2020 edition of the CQI’s Quality World magazine, JUSE stated that, “Within a company the chief quality officer must act as a quarterback in leading the corporate culture of quality on a companywide scale. This means instilling the essence of business management and quality to all employees, understanding the corporate ethics for the company (as manufacturer), the customers (as consumers) and society, then using it in human resource development.”
Sustainability may not be a ‘new’ frontier, but it is one that the quality profession can make a real difference to if we embrace it.
The CQI does not only support quality professionals we also lead the quality profession by bringing topics such as sustainability to the fore.
CEO, Chartered Quality Institute