| In today's competitive world each company is | | | | that problem should be identified and the problem |
| constantly trying to achieve the competitive advantage | | | | should be addressed. If at all any dashboard is needed |
| through various means. Changing the external factors | | | | for monitoring purposes than it should be an |
| like market demand, customer choice, creating entry | | | | automated process with no human intervention with |
| barriers, etc. are not easy, therefore, companies look | | | | data taken from an independent source. |
| internally to create efficiencies, eliminate waste, | | | | What can be improved vs. what needs to be |
| enhance productivity, etc. etc. This leads to creation of | | | | improved |
| what in most companies is called Quality or Six Sigma | | | | In my experience it is a normal practice for any quality |
| function/department. Almost every company of the | | | | function to highlight improvement ideas implemented by |
| modern world has such department that tries to invent | | | | various people in the organisation. These improvement |
| the success formula for the company. Most CEOs | | | | ideas could be small impact or big impact ideas and |
| would rely very heavy on the quality function and are | | | | these could get originated and implemented in any |
| willing to invest money to get the edge in the market | | | | department be it Marketing, Customer Service, |
| over competitors and treat it part of the company's | | | | Operations, Finance, HR, etc. Quality function would |
| survival strategy. | | | | flash these ideas with their stamp on it and would |
| After having spent some years in the operations of a | | | | invest huge amount of time in showcasing these to the |
| few companies and having looked at the practices | | | | management. Many rewards and recognition schemes |
| followed by the quality functions, I get the feeling that | | | | are launched to motivate employees to think about |
| this function in most cases and in most companies are | | | | improvement that are lower hanging fruits and |
| overrated. I also feel that blind faith is held on the | | | | repository is created for the best practice sharing. |
| working of this department and a little effort is made | | | | You must be thinking that this sounds like a good thing |
| to measure their success objectively. Claims of | | | | to do for any organisation and what could possibly be |
| savings made or efficiencies achieved are not seen in | | | | wrong with this. My biggest disconnect on this is that all |
| the financial statements of the company or any other | | | | these efforts are focused on what can be improved |
| external parameter like market share. The claims | | | | and this normally does not help much in improving that |
| made in most cases are for the future potential | | | | needs improvement from the customers' perspective. |
| savings that can not be verified whether those claims | | | | Time, effort and energy spend on managing and |
| materialised in reality. Senior management gets | | | | showcasing 'what can be improved' can never |
| mesmerised with the jargons and statistical enigma | | | | achieve the expectation that quality function would |
| created and go with the faith that these are tried and | | | | help in achieving operational excellence. My view is that |
| tested techniques and they must be getting benefits | | | | whatever can be improved will eventually get |
| somewhere. In case of service industries like BPO, IT, | | | | improved, however, the trick is in identifying the gaps |
| consulting, etc. these tools and techniques are also | | | | between service delivery and customer expectations |
| pitched as unique selling proposition. However, I am not | | | | and then thinking and implementing ideas that would |
| sure whether any company of the modern world has | | | | bridge those gaps. Such process can only provide |
| been successful in carrying out a cost benefit analysis | | | | answer to a known internal problem in performing an |
| with tangible benefits seen out of this function. | | | | activity by an employee; however, it can not help even |
| While I am of the view that most companies of the | | | | in identifying any fundamental gaps in the customer |
| modern era are not able to see the tangible benefits | | | | service delivery vs. customer expectation. |
| out of quality function, I am not saying that the quality | | | | Internal focus |
| tools and techniques like six-sigma are ineffective. | | | | I have seen many CEOs making a statement that |
| These tools make perfect theoretical sense however | | | | removing fat and wasteful expenditure in the company |
| the flaws in the approach with which these tools are | | | | will help them improve its margin and enhance |
| applied by most quality functions make these tools | | | | shareholders' value. This is an excellent example of |
| ineffective. In this article I am trying highlight some of | | | | looking internally for the success. There is no doubt |
| the basis flaws in the approach that the quality | | | | that every company has certain level of wasteful |
| functions of most companies suffer from and draw | | | | expenditure but it is equally true that there are areas |
| attention to the risk associated with excessive reliance | | | | where a company may not have spent as much as |
| placed by many CEOs on quality functions in their | | | | they should have as investment for future growth. |
| struggle to accomplish the operational excellence. | | | | One such example could be desire to have top talent |
| Management by dashboard | | | | retention but salary benchmarking at industry average. |
| I have seen many companies suffering from this | | | | The moment company start to look at internally for |
| syndrome and this is something that is propagated by | | | | cost savings then there is a low possibility that the |
| the most quality functions. The punch line is 'something | | | | company would make any effort to identify the areas |
| that can not be measured can not be improved'. I have | | | | where corners are getting cut jeopardising its growth |
| many issues with this syndrome. Anything that goes | | | | potential. |
| wrong once, the simple solution offered is to have a | | | | In today's world where companies have sophisticated |
| dashboard to monitor it constantly to ensure that it | | | | and online accounting, budgeting system and MIS |
| does not go wrong again. This is implemented with little | | | | systems; management reports are prepared and |
| realisation that the time spent by different people in the | | | | reviewed on monthly basis it is hard to believe that |
| organisation to create that dashboard will eat into the | | | | there could be enough fat to significantly impact a |
| available productive hours. There is no attempt made | | | | company's profitability. There is a danger that |
| to find out how much it costs to have a dashboard. | | | | company may get into a vicious cycle of taking money |
| For companies with different divisions or branches, | | | | out from areas which could impact their long term |
| these dashboards are prepared from the lowest level | | | | growth. Loss of good talent to the competition can |
| and then consolidated at various levels. If we look at | | | | happen fairly quickly. |
| the cost of dashboard based on time spend by | | | | I think elimination of wasteful expenditure should be |
| number of people on annulised basis then one will be | | | | driven as a culture in the company. Company's policies, |
| able to realise whether or not it is worth the effort. I | | | | processes, communications, etc. that outline a |
| notice that quality function proposing a dashboard | | | | company's culture should stress upon the point that |
| completely ignore the cost attached to its | | | | company seeks for value of its money and |
| implementation. I think in most cases these costs are | | | | employees should as discreet in spending the |
| assumed to be zero. I have seen instances where | | | | company's as they would while spending their own |
| people have missed the customer service delivery | | | | money. It only rarely happens that a recommendation |
| because they were busy completing a dashboard. | | | | is made from the quality department to the senior |
| Imagine if it happens in a company on a broader level | | | | management stating that company is under spending |
| then its implications could be disastrous. | | | | on a specific area and that may impact its future |
| The other reason that is normally given for having a | | | | growth or is impacting customer service delivery. |
| dashboard apart from monitoring a process or activity | | | | The genesis of my article is that quality or six sigma |
| is that dashboards with the comparative information | | | | tools are excellent tools and are very much relevant in |
| drives internal competition and therefore helps in | | | | today's context. However, the approach and practices |
| achieving operational excellence. This concept of | | | | being used by the quality functions of most companies |
| internal competition starts the practice of what I call | | | | are driving behaviour of management by dashboard, |
| "dashboard management". People at different level | | | | dashboard management, improve what can be |
| think of all the possible tricks of the world to manipulate | | | | improved and too much internal focus. These |
| the numbers that will get flashed in the comparative | | | | approach and practices are probably doing more harm |
| dashboard. This again leads to valuable time and | | | | than providing value that senior management aspires |
| resources getting wasted on dashboard management | | | | to derive out of this function. There is a need to |
| that should ideally be used in performing the tasks that | | | | evaluate and assess the cost benefit of each |
| add value to the company's top line and bottom line. | | | | recommendation or suggestion made by them rather |
| The cumulative amounts of time spend in some | | | | than having a blind faith on its effectiveness. There is a |
| organisations in creating, consolidating, reviewing and | | | | need to shift the focus from internal to external, from |
| managing these dashboards have now reached to the | | | | input to output and from waste elimination to |
| level of insanity. | | | | investment for growth to achieve real operational |
| In my view a dashboard is not the answer to any | | | | excellence. |
| problem. If a problem is detected then root cause of | | | | |