1. stephen.geach@gmail.com
A Case for Quality
Let’s start paraphrasing a case that Conner made:
The Quality movement has little to teach you….
…….but it has much to remind you
So what is it we have to ‘remind’ them of?

2. Balanced Scorecard
Strategies IdentifyStrategic Objectives
Clarify Critical Success Factors
KPIs
Identify CSFs
Finance Cr
To succeed
itic
financially, how
a lS
should we appear to uc
our stakeholders ce
Customer
ssF
To achieve our ac
vision, how should tor
we appear to s ≡K
Ca our customers
us PI
e Internal Process s
an To satisfy our stake
dE holders & customers,
ffe what business processes
ct must we excel at
Learning & Growth
How will we
Kaplan and Norton sustain our ability to
change and improve

3. The Way Organizations Work
Managing Director
Increase Profits by 10% SVP, Operations
Reduce churn (turnover) VP, Marketing
Increase customer satisfaction Director, Customer Service
Reduce hold times
Director, IT
Faster access to all customer information
Project Manager
Eliminate disparate systems

4. Customer Value Proposition
Value = Product/Service Attributes + Image + Relationship
Functionality Price Quality Time
Kaplan and Norton

5. Marketing Mix
Price

Quality
Attributes Product /


Promotion
(Value Service
Propositions)

Place
Clark 2000

6. Marketing Mix
Price

Quality
Attributes Product /


Promotion
(Value Service
Propositions)


People, Processes,
Place  Proactive Customer
Service
Clark 2000

7. Relationship between Process and Project
Process
Metrics
Measured
during
projects

8. Different Roles of our People
Not directly involved with the
Involved with the marketing mix
marketing mix
Contactors: Sales and Marketing, Modifiers: Switchboard Operator,
Frequent Customer Service. HD Coordinators, Dept Secretaries.
or periodic
Customer Responsible for building relation- No direct contact with customer but
contact ships. Need personality to be still needs to be responsive to
responsive to customers. customer.
Influencers: Product Groups, Isoteds: Finance, HR, IT, Quality.
In-frequent
Development Groups.
or no
No direct contact with customers,
Customer
No direct contact with customers but but as support providers their
contact
are often involved with traditional contribution is crucial to the
elements of marketing mix. organization.
Employee Influence on Customers:
which should influence the appropriate Employee selection,
rewards, performance, and training requirements.
Judd

9. Customer Satisfaction
Image
Expectations
Perceived Customer Customer
value satisfaction loyalty
Perceived
quality of
“hardware”
Perceived
quality of
“humanware”
ECSI

10. Balanced Scorecard
Financial Results Internal Business Process Results
These include measures of the critical business
These include measures that indicate processes that have the greatest impact on
whether a company’s strategy, customer satisfaction and in achieving the
implementation, and execution are financial objectives (20:80 key work).
contributing to the bottom line improvement.
Financial objectives can be measured by Examples include product design and product
operating income, ROCE, sales growth, development (innovation) and manufacturing,
revenue generation. marketing and post sales service (operations).
Customer’s Results Learning & Growth Results
These measure the infrastructure an organization
These include measures such as customer must build to create long term growth and
satisfaction, customer retention, new improvement, and include measurements of
customer acquisitions, customer profitability, people, systems and organizational procedures.
and market share, in targeted customer and
market segments. Examples include employee satisfaction,
retention, training and skill sets; information
system capabilities; alignment of procedures to
recognize employee incentives in line with
organizational success, etc.
Kaplan and Norton

11. Hi
HOSTAGES BELIEVERS
No where else to go Loyal
Trapped due to APOSTLES
lack of competition or Speak out for you
high switching costs
Repeat
Med
Business DEFECTORS MERCENARIES
Dissatisfied,
may become….. Satisfied but not loyal,
price sensitive
TERRORISTS
Speak out against you
Lo = -10 OK=0 Hi=+10
Customer Satisfaction
(Jones and Sasser)

12. Management of Change
Typical outcome of change
business goal
gap
(spring back)
time

13. Malcolm Baldrige National Quality Award
Quality is judged by customers. Thus quality
must take into account all the product and
service features and characteristics that
contribute value to the customers and lead to
customer satisfaction, preference, and retention.
Value and satisfaction may be influenced by
many factors throughout the customer’s overall
purchase, ownership and service experience.
These factors (values) include the company’s
relationship with the customers that helps build
trust, confidence, and loyalty.

14. Quality of Management
is a prerequisite for the
quality of products and services
Europe’s 500 study
1996

15. Benchmarking
“Planning without awareness of what your
competitors are doing is like flying a plane
over the Alps in heavy fog without any
instrument controls”
Jan Howard

16. The preceding slides remind us how:
Strategic planning can identify critical success factors that, through effective
policy deployment, give sustained improvement to our value proposition.
Effective leveraging and linking of the marketing mix impacts product
positioning and our quality value proposition.
By designing customer service around the marketing mix we can build and
maintain customer relationships which can lead to improved customer
satisfaction.
Through managing processes, we can identify our capabilities, and through
active benchmarking, we can identify capabilities of our competitors.
Through monitoring objective results, and involving our people, we can plan
and manage effective change.
Important the quality and commitment of management is to all of the above.

17. Business Systems
Deming’s definition of a system:
A network of interdependent components that
work together to try to accomplish the aim of the
system
Kaplan and Norton’s definition of a system:
A set of processes and practices used to align and
control an organization.

18. The Way Organizations Work
Managing Director
Increase Profits by 10% SVP, Operations
Reduce churn (turnover) VP, Marketing
Increase customer satisfaction Director, Customer Service
Reduce hold times
Director, IT
Faster access to all customer information
Project Manager
Eliminate disparate systems

19. Demonstrable Results
USA Results European Results
% improvements of award winners % improvements of award winners
when compared with benchmarked when compared with benchmarked
companies companies
Stock price 36% Share value 36%
Sales Operating income 48% Sales 17%
Sales 37% Sales over Assets 5%
Total assets 42% Capital Expenditure Over sales 4%
Employees 16% Assets 20%
Return on sales 8% Total cost over Sales 1.4%
Return on assets 3%
( Singhal / Hendricks) ( CQE)

20. ECONOMIC CASE FOR QUALITY
During a survey of CEOs and top executives, when
asked:
‘does quality contribute to the bottom line or not’,
99% of the 603 respondents said they believe
quality contributes to the bottom line.
When asked why quality contributes, respondents
most often mentioned increased revenue through
repeat business, referrals and customer loyalty; less
rework; and savings on labor and materials.
Greg Weiler, ASQ project leader - 2004

21. The Topic of this Presentation
A Case for Quality
has already been made……..
but senior management may not have heard it yet!

22. Thank You