Q: I’m working on updating my company’s scorecard. What are some pitfalls or mistakes I should look out for?
A: The first potential mistake is updating the scorecard without a review of the company’s short-term and long-term objectives. Typically, objectives are broad statements (such as achieving record sales), and goals are the quantification of the objectives (putting a dollar value on the sales).
Strategic thrusts are developed to achieve the objectives or goals, and step-by-step tactics are identified to achieve the strategies. Scorecard metrics should be aligned with the goals at the upper level of the company but may also be established at the department level as supporting strategies and tactics are developed.
It is not necessary to know how goals are going to be achieved when they are initially set. In fact, it would be a mistake to think that. Developing the strategies and tactics to achieve the goals can follow the goal-setting activities. But I caution you to make sure there is no sub-optimization between departments. For example, you don’t want to achieve order fulfillment goals by carrying large inventories.
Legendary football coach Vince Lombardi exhorted his teams with these words: "We’re going to relentlessly chase perfection knowing full well that we will not catch it, because perfection is unattainable. But we are going to relentlessly chase it, because in the process, we will catch excellence. I’m not remotely interested in being good."1
There are a couple lessons in Lombardi’s speech that are applicable here. The obvious one is to aim high. Set goals that stretch the organization’s abilities to new levels. Being good is not sufficient. Aim higher than anything you’ve ever achieved before.
The second lesson is that the mind-set of chasing perfection or excellence must be pervasive throughout the team; the passion must be felt by everyone. Achieving that requires participation. Members of the organization must be involved in identifying opportunities (strategies and tactics) at their working level to help reach the company’s goals. Participation breeds commitment.
It’s well known that what’s measured gets done. But it’s important to make sure the metrics are not contrived or fluffy. They must be real and crucial to the operation of the business. Publish the metrics regularly in a summarized format everyone can understand. Avoid sending out a slew of overly complex charts to the masses, otherwise they’re just as likely to be ignored as followed.
Peter E. Pylipow
Senior design excellence engineer
Vistakon—Johnson & Johnson Vision Care
- Richard Scott, Legends of Alabama Football, Sports Publishing, 2004, pp. 77-78.
For more information
- ASQ, "Balanced Scorecard," www.asq.org/learn-about-quality/balanced-scorecard/overview/overview.html.
- Leip, Terry, "Score One for Improvement," Quality Progress, October 2009, pp. 32-38.
Q: How do you select the right metrics with which to assess change?
A: The right metrics help in assessing change in terms of stated goals. To illustrate their usefulness, I’ll use the example of change in a manufacturing process.
Duration and temperature of chemical reaction are being changed. The metric selected is the process yield that needs to be maximized through optimizing the process duration and temperature. Is this the right metric of change?
To find out, a multidisciplinary team that includes product and process engineers, statisticians, economists and marketers performs a brainstorming session. They discover the following:
- Product yield increase may be achieved via increased process duration or temperature.
- Increased duration may increase equipment and labor costs per unit of product.
- Increased temperature may increase energy consumption per unit of product, along with increased pollutant emissions and increased costs per unit of product.
- Process change may lead to deterioration of product quality characteristics, such as chemical purity and strength, as well as electrical, magnetic or corrosive properties.
The initially selected metric, product yield, does not include indicators of the possible cost increases per unit of product and possible deterioration of quality. Obviously, the right metrics (criterion of optimality of the process change) need to include all indicators so they are suitable for measuring the process change that results in a product of required quality at minimal cost.
A similar approach is applicable to the selection of the right metrics for assessing business, economic, social and political changes. In the case of complex processes or systems, the response to change (to be measured with the selected metrics) can be delayed.
For example, past experience has shown it takes up to two years before the economy feels the full effect of the reduction of the federal interest rate. That knowledge helps with correct selection and interpretation of the metrics of economic growth.
Generally, to select the right metrics for assessing change, it’s important to have a clear understanding of the process of change, the goal of the change and the participation of an effective multidisciplinary team.
Jeffrey E. Vaks
Roche Molecular Systems Inc.
For more information
- Kolar, Bradley, "Measures That Matter," Quality Progress, November 2009, p. 72.
- Okes, Duke, "Driven by Metrics," Quality Progress, September 2008, pp. 48-53.
Q: Is there a checklist I can use to determine how to get a quality management system off the ground?
A: I have seen many companies develop their own checklists, and many registrars furnish their auditors with checklists. ASQ Quality Press is another resource, as its catalog lists books on ISO 9000. The best resource, however, is the standard itself—ISO 9001:2008—and the accompanying guidance document.
The best checklists I have seen keep it simple and restate the sentences found in the standard in the form of questions. Frequently, companies will pattern their quality manuals around such an approach. You should do more than just phrase the checklist in yes-and-no terms. In answering your questions, state either in the quality manual, your internal checklist or audit form how your organization meets the requirements.
For example, clause 5.2 of ISO 9001:2008 states that "top management shall ensure that customer requirements are determined and are met with the aim of enhancing customer satisfaction."1 Your checklist could simply say, "Does top management ensure customer requirements are determined with the aim of enhancing customer satisfaction? How is that accomplished?"
This will take a little time to prepare, but if you go through this, you will also have gone a long way to preparing an effective quality manual.
Quality improvement consultant
Fort Collins, CO
- International Organization for Standardization, ISO 9001:2008—Quality management systems—Requirements, 2008.
For more information
- Radziwill, Nicole, Diane Olson, Andrew Vollmar, Ted Lippert, Ted Mattis, Kevin Van Dewark and John W. Sinn, "Starting From Scratch," Quality Progress, September 2008, pp. 40-47.