Search

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.  

As more organisations become aware of their social impact, many words and phrases have grown in popularity. One of the most popular of those words is sustainability, as well as all the words that go along with it, such as carbon neutral, net zero, diversity, inclusion, corporate governance, environmental, social and governance (ESG), and so many more.

But how should we approach sustainability? And how should we work towards an organisation that is not only sustainable itself, but also contributes to environmental integrity, social equity, and economic prosperity – the principles of sustainable development, as well as the United Nations’ Sustainable Development Goals? 

A sustainability conscience means that all sustainability risks are addressed and managed, and all sustainability opportunities are taken advantage of...

Transforming processes with a sustainability conscience

The answer is quite simple; by developing its quality conscience into a sustainability conscience. We need to take the things that an organisation uses successfully and that already drives continuous improvement – such as its quality practices, risk-based approaches, and management systems – and transform them by building in a sustainability conscience from the start. If we can incorporate corporate sustainability elements into policies, objectives, and processes, as well as its overall corporate strategy, we can turn them once again into a competitive advantage.

A sustainability conscience means that all sustainability risks are addressed and managed, and all sustainability opportunities are taken advantage of, so that the organisation improves over time, has impeccable product stewardship, and contributes to the common good.

Addressing sustainability risks

Sustainability risks relate to all the functions of an organisation. In order for them to be addressed and managed, an organisation should use the existing risk management system, which ought to be enhanced in order to also include ESG risks. Relevant controls should be established so that sustainability risks are mitigated and those controls should be addressed with the same rigor as the rest of the company’s controls.  

Preparing for a sustainability conscience as an auditor

Internal audit plans will include more and more sustainability issues, and so internal auditors should be sure to allocate enough time to assess them, since they are as important as the remaining auditable issues of an organisation. The audit committees will also review more non-financial results so that the company improves not only its financial performance but also its overall impact on the environment and society, through this process, and its overall value. 

Preparing for the future

There is a growing urge for organisations to have more accountability, and I believe that sustainability information will increasingly be included in a company’s annual reports – the number of companies that issue such reports is expected to at least triple in the next five years. As 2050 approaches, companies will have to reach net zero so that we, as a global community, can achieve the Paris agreement. And in order for a company to be accountable and transparent, a sustainability conscience is in order.  

Corporate sustainability is an activity that should be managed, and due to its complexity and multidisciplinary nature, this should be done through a systems approach. A company’s corporate sustainability management system should be governance-oriented and functionality based, and what better way to achieve this, than developing it on its existing management systems? And of course who would be better suited to lead this change, than the quality professionals that have the mentality, ethics, training, and willingness to do the right thing? All of us that can make a difference once again, by creating a sustainability conscience.