Legendary quality guru W. Edwards Deming famously quipped “In God we trust, all others must bring data.” Quality management is inextricably tied to measurement. After all, if you can’t measure it, you can’t know whether you’re achieving the intended results. Taking the time to identify the right KPIs is important. As the saying goes, “You get what you measure”, so be careful in making your selections.
The first and most important step in the process is to identify your key stakeholders and come up with a clear definition of what quality means for your product or service. Following that, there are some key categories of metrics to consider, starting with a focus on stakeholders.
This could take the form of a simple question: “Would you recommend our company or product to others?” The responses to that question may be compiled into a Net Promoter Score (NPS), a common metric used by a wide range of companies across multiple industries. Similar scores may be developed around online rankings, including social media sentiment analysis and reviews. More process-focused metrics might include the total number of complaints per period.
It’s also important to highlight the financial impact of quality management programs. Financially focused metrics help to accomplish this. Those include things like the cost of quality and the cost of poor quality. Those in turn may call for detailed financial metrics such as scrap, rework, and re-inspection (internal costs of poor quality); as well as adverse event reporting, warranty, re-work, and product liability (external costs of poor quality).
In many organizations, however, “quality culture metrics” are overlooked. Many people think of quality culture as an intangible and nebulous feature of top-performing organizations. The implication is that culture cannot be measured. Although there are many aspects of culture that cannot be easily measured, it is possible to establish some proxies that provide some indication of a healthy (or unhealthy) quality culture. Let’s look at a few examples:
Indicate cases where a customer perceives that there is a defect, but your internal team dismisses the customer’s concern as a non-defect. In other words, the developers consider the product to fall within the company’s definition of acceptable parameters or “normal behavior”, while the customer perceives that something is wrong. While it may be expected that there will always be some number of rejected defects for any product and company, – it should be expected that the overall number remains very low. An unexpected increase in rejected defects, or an unusually high number for specific products, teams, or employees; might be a signal that corrective action is needed.
Quality training metrics
Indicate the extent of the organization’s commitment to making sure that every employee receives the appropriate training with respect to quality, and that training is refreshed on a regular basis. Metrics may include the percentage of employees who have received training, the percentage of employees receiving such training on a timely basis, and compliance with externally defined training requirements. Many organizations also measure employees’ awareness of quality standards and familiarity with quality standards and processes, as well as their understanding of those standards and processes.
The improvement acceptance ratio
Measures the percentage of suggested improvements that are analyzed, accepted, and implemented by the product development team. Continuous improvement initiatives thrive when employees are engaged and believe that their opinion matters. If the suggestion box (or virtual equivalent) fills up, only to be ignored by the team responsible for reviewing those suggestions, – employee morale is likely to suffer. A healthy quality culture is one in which the entire team feels comfortable contributing their ideas and has confidence that their suggestions are being heard.
While there are a number of other potential metrics that can help you shed light on the health of your quality culture, you’ll need to figure out which ones are the best fit for your organization. When it comes to defining KPIs for your organization, “less is more” is a good rule of thumb. Identify the several measures that align most closely with your team’s objectives, including stakeholder KPIs and financial KPIs, – but be careful not to overlook the measures that can help you track the health of your culture of quality.
If you’re working on building a culture of quality, Intellect can help. Contact us today to discuss your situation and learn how Intellect’s QMS platform with extreme configurability can help.