All Ears

Abstract:When presenting proposed quality improvement initiatives to senior management, it is important to speak their language by including important financial metrics that will hold their attention. A quality professional must be able to build a business case that describes the issue, its solution, key risks, and estimated benefits and costs in order to secure approval and funding. The basic financial metrics of costs, savings, return on investment (ROI), pay-back period, and break-even analysis can be used in any business scenario and will enhance decision …

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great!
--B.N.N.PRASAD, 10-14-2018


Being able to communicate with anyone in a common language is the best route for success. The companies that succeed with quality initiatives are those whose top management has learned to "speak quality." Make it a one-sided proposition, and you've created an environment in which one side isn't committed to the other. There isn't a common language in that case; it's about one side maintaining that its culture/language/perspective is the only one of value.

The current U.S. economic crisis is due largely to focusing on numbers and improving the bottom line. Since when has quality been limited to those criteria?

Regardless of the business, in the end, quality is about satisfying people. Fail the people, and eventually there will be a price to pay. Humans come with many expectations for quality that cannot be quantified by numbers and cash.

I agree with Dr. Fischer. It's time that management learn the language of quality, not just from the quality professionals, but from the common man who also speaks it. I'm right in there with Paul, Shree, and Jeffrey.

But for those who are new to the quality field, this article is fine for learning how the other side speaks.
--Marcia M. Weeden, 09-23-2010


My company is a major player worldwide in the refreshment industry. They actually budget for bad quality, so it becomes a number-chasing exercise, manipulating data lower in the ranks to be in under budget. What a farce.
--CLIVE, 03-20-2010


After more than 35 years in industry and in healthcare, I'm quite tired of hearing how we quality professionals should "speak the language of upper management." It's way past time that upper management learn the "language of quality." Nay, more than just the language, upper management should learn the science and art of quality, and should learn and apply the basics of effective leadership.

It's because upper management is so focused on the money - the *final* process output - instead of the quality of their critical processes - from inputs to intermediate steps - that most businesses produce mediocre results.
--Wayne G. Fischer, PhD, 11-29-2009


A very good article, which is very useful for any non-accounting/finance background people.
--Anil Skariah, 09-04-2009


Money matters most, and investment in Quality results in direct and indirect cost reductions.
--Girish Trehan, 08-05-2009


Highly recommended...A must read for a quality professional.
--Robin Francis, 07-26-2009


Improvements in moral, brand enhancement and operational flow are great qualitative benefits. But proving the case financially opens the channels of support and enables you to prove the reality of the former.
--John Morrison, 07-25-2009


Well written and gives concise explanations to all of the basic terminology used to determine costs. I especially appreciate the examples given to describe the metrics being used.
--Kevin A. McWatt, 07-21-2009


I have to agree with Paul and Shree regarding the lack of participation in quality by management. Why is it that the burden of proof always rests on those wanting to solve problems and not on management who are hesitant to initiate the needed change? Is there a company anywhere in North America where data is required for both sides of a decision? That is, the proponent of an idea would present data for change and the opponent would then present data for remaining the same? My experience is that as long as the suggestion is to NOT spend money, you will always be supported, even though it may be extremely foolish to pass up an opportunity.

Further compounding the problem of supporting proposals to management is the fact that most of my company's cost and price information is kept from general viewing by employees. Without knowing what the most significant costs are and without knowing what our price of goods sold is, it becomes pointless to attempt to use financial arguments.
It is very unfortunate. As it was mentioned, those who know seem to find success in Japan instead of their hometowns.
--Jeffrey Vust, 07-16-2009


Excellent point put forward, followed by a succinct Management Accounting refresher ... Unfortunately, in the world dominated by Jerry Maguire-styled management with a mantra of "show me the money," the Jurans and Demings of the world go to Japan to use Quality Principles.

The sad part of the business culture today is that quality is left to a few engineers/eng. managers in the lab or manufacturing lines, where unfortunately they are mostly creating reports or graphs that don't spell out business issues and cost impacts. My take is that the problem lies on both sides of the table (management and quality professionals). Everyone needs to see quality as an integral part of the business with real costs associated with it (or lack of it ... be it inefficiencies, reworks, customer satisfaction and market share losses due to recalls or regulatory issues). It's high time to change the perception from "quality is engineering's business" to "quality is everyone's business!"
--Shree Balachandran, 07-14-2009


Good article, but Japanese executives would all understand quality terminology without the need for translation. Food for thought!
--Paul Harding, 07-14-2009


This is an excellent article on the basics of an income statement and how to use simple justification methods to help sell the merits of a quality improvement project. Easy for anyone in business to understand.
--Greg Sutton, 07-13-2009


Agree, excellent article. Since most of our jobs are related to the viability of a business, this is highly recommended reading for quality professionals.
--Dana Hawthorne, 07-12-2009


Excellent article. Puts it all together.
--Al Arseo, 07-01-2009


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