Ask SCORE: The four step process for quality improvement
The four step process for quality improvement
A new way to compete in a crowded market
By Richard Walton
Assistant District Director for SCORE
Small business Organizations compete in a number of ways. Among these methods are reputation, price, response time (whether deliveries or response to inquiries), and customer service. Quality is also a tool of competition, but there is often a perception that quality competition costs money, and is more appropriate for the larger firms with greater resources. On the contrary, quality is the best method for a small organization to compete with its peers as well as the larger firm. The primary reason for this is that quality initiatives are hard for competitors to duplicate and even if they do, they are seen as copiers rather than innovators. This is because the firm that emphasizes quality as a the field of competition is continuously improving its products and services and therefore continuously innovating and providing more value to its customers. The question is how to make quality the primary focus of the organization and thereby reap the rewards of market leadership.
The first step is to become customer value focused in everything that you do. Customer value focus means regular dialogue with customers to determine what they see as value in the products and services that they buy, and what they like and don't like about the way companies do business with them. This information can be obtained in a number of ways, including direct contact, but also by observation, research, and brand comparisons. The basic objective is to learn what consumers want now and to predict what they might want in the future. Once this information is gathered, it must become the central objective of the company to provide it, now and in the future, emphasizing quality and continuous improvement.
The second step is to address quality in all areas of the firm's operations, including administration, process, finance and marketing. The basic reason for this is that a firm cannot emphasize quality in its products and services alone, while neglecting its internal processes. Great products that are shipped with invoicing errors, without proper sales follow up, and with second hand packaging can undermine product quality, just as a surly counter attendant can at a fast food restaurant. All aspects of the firm's operations must be guided by the highest principles of quality maintenance and delivery.
The third step is to enlist every employee in the effort to improve the firm's products and processes. It should always be assumed that employees who do the same job over and over again have ideas on how it could be improved. Management needs to be open to hearing these ideas and acting on them. An added benefit of getting everyone involved is that the ideas that come from multiple sources can have a wider perspective and even create radically new and different operating methods that can provide a sustainable competitive advantage in the marketplace.
The fourth step is the documentation of every process the firm uses and product/service that the firm makes/provides or buys for resale with the objective of reviewing them on a continuous basis for potential cost reduction, product improvement, and productivity increase initiatives. Documentation enables the firm to prioritize its resource commitments in order to have the maximum impact in the fastest time and with the optimum use of resources. Documentation of product and service design and development enables the firm to review and upgrade its product/service lines, while documentation of processes enables a continuously updated view of business processes than can lead to improvements and thereby cost reductions and productivity improvements.
These four steps can and should be undertaken by every small firm. Customer Focus, Quality in all products/services and processes, enlistment of everyone in the firm to help develop improvements, and documentation are the keys to small business innovation 'on the cheap'. We can at least partially reduce the large firm field advantage by using the Four Step Process of Continuous Improvement, while realizing the rewards of higher profitability, greater resource productivity, lower costs, and sustainable competitive advantage. Further information on how to utilize The Four Step Process can be obtained by contacting SCORE (www.score.org).
Mr. Walton teaches Financial Management, Operations Management, Corporation Finance, and Entrepreneurial Finance at Frostburg State University. He is also Assistant District Director for SCORE, Western Maryland, and the President of ERMACORP, a Hagerstown based Management Consulting Firm. He may be reached at 301-462-9850, or by email to Richard@ermacorp.com.