Quality management is a major component of corporate governance, and its primary role is well-known. However, in actual production and operation, the quality management test is not excellently answered by every enterprise. In my opinion, there are ten important reasons for this.
One: Lack of Vision
Vision refers to the far-reaching insight into the future that determines what kind of enterprise the company will become. It can identify potential opportunities and set goals, realistically reflecting the benefits that can be obtained in the future. Vision provides the order for where the enterprise should grow, how it should formulate action plans, and the organizational structure and systems needed to implement these plans. A lack of vision leads to quality being excluded from strategy, making the company's objectives and priorities unclear and making it difficult to understand the role of quality within the enterprise. To achieve success from effort, enterprises need to change their mindset and create an environment of continuous quality improvement.
Two: Not Customer-Centric
Misunderstanding customer preferences, lacking foresight in serving customers, improving some aspects without adding value to the customer, can lead to the failure of quality management. For example, a delivery company was obsessed with punctual deliveries, striving to improve on-time delivery from 42% to 92%. However, much to the managers' surprise, the company lost its market share because it emphasized timely delivery but failed to promptly answer customer calls or explain its products. Customer satisfaction is a dynamic, continuously changing goal. To succeed in quality management, one must focus on understanding customer expectations and develop projects that meet or exceed customer needs. One foreign company claimed to fully compensate dissatisfied customers, which came at a cost, but their revenue skyrocketed, and employee turnover dropped from 117% to 50%.
Three: Insufficient Contribution from Managers
Surveys show that most failures in quality management activities are not due to technical issues but rather managerial ones. All quality management authorities agree that one of the biggest obstacles to quality management is the lack of top management involvement in quality improvements. Managerial involvement means communicating the company's ideas from top to bottom through actions, focusing all employees and activities on continuous improvement—a practical approach. Simply talking or giving public speeches is not suitable for quality management; managers must participate in every aspect of quality management work and maintain this commitment continuously. In one survey, 70% of production supervisors admitted that their companies now spend more time improving customer satisfaction factors. However, they delegate these responsibilities to middle managers, so it remains unclear whether these efforts have been successful. Can such quality management really succeed?
Four: Purposeless Training
Many companies spend a lot of money on quality management training, but few achieve fundamental improvements as a result. This is because too much quality management training is unnecessary. For example, employees learn about control charts but don't know where to use them, and soon forget what they've learned. One could say that purposeless and unfocused training is actually a waste and is also a factor contributing to the failure of quality management.
Five: Lack of Cost and Benefit Analysis
Many companies neither calculate quality costs nor the benefits of improvement projects. Even companies that calculate quality costs often only consider visible costs (such as guarantees) and easily calculable costs (such as training fees), completely ignoring relevant significant costs like sales losses and the intangible costs of losing customers. Some companies fail to calculate the potential benefits brought by quality improvements, such as failing to understand the potential sales losses due to losing customers. Foreign studies show: dissatisfied customers will tell 22 people about their dissatisfaction, while satisfied customers only tell 8 people about their satisfaction. Reducing customer churn by 5% can increase profits by 25% to 95%, and increasing customer retention by 5% can increase profits by 35% to 85%.
Six: Unsuitable Organizational Structure
Organizational structure, measurement, and rewards are often overlooked in quality management training and promotion. If a company still has cumbersome bureaucratic levels and closed functional departments, no amount of quality management training is useful. In some companies, the roles of managers are unclear, and quality management responsibilities are often delegated to middle managers. This leads to power struggles between quality teams, a lack of overall quality control, resulting in arguments and chaos. Flat structures, delegation, and cross-departmental collaborative efforts are essential for the success of quality management. Successful companies maintain open communication channels, develop full-process communication, and eliminate interdepartmental barriers. Studies show: empowered cross-departmental teams achieve quality improvement results 200% to 600% greater than those achieved by departmental teams.
Seven: Quality Management Forms Its Own Bureaucratic Institution