Leadership in a Competitive Environment
Demand > Supply
Most organizations work in vertical silos. These silos have names: Purchasing, Operations, Finance, Marketing, and so on.
Individual visiting cards cement the silo one belongs to. The silo also defines one’s career path in an organization.
This approach to management can work if demand for our offerings is greater than supply. Take it, or leave it.
Demand < Supply
In a competitive environment, where supply is greater than demand, we learn that the customer defines quality. Further, that the customer is outside the organization. Our customer receives an output / offering from work that flows horizontally, across silos. We call this horizontal cross-functional work, a process.
Basically, a customer votes for our offering with his / her money if customer perception exceed customer expectation. While perceptions are usually stable, expectations are a moving target. These expectations are influenced by competitive offerings.
Leadership for Quality
In order to become more competitive, leaders need to become more knowledgeable about quality management. They need to make quality an integral part of their business strategy. This business strategy should identify the chronic problems buried in processes. Thereafter, the vital few problems that create 80 % of the cost of poor quality (COPQ), need to be solved by leaders and managers, using structured quality improvement methodologies. Our processes must become faster, better, cheaper than our defined competition. This can result in customer satisfaction, and perhaps even customer loyalty.
But this is not as easy as it sounds. Leaders have other priorities for their respective organizations. Their vision is usually driven by the top line, market share, recognition, and so on.
Ignite Bottom Line Thinking
However, there is a solution. Ignite the thinking of leaders with the following statements:
- The COPQ in any organization is one-third of total costs
- Compare Profit / Sales ratio with COPQ / Sales ratio
- The ROI for vital few problems is 1000 %.
In my experience, leaders who succeed in improving the bottom line through a quality strategy, generally have five attributes: Trainer; Coach; Counsellor; Facilitator; Recognizer.
Do they have any more?
I will be hosting a webinar on Leadership for Quality on 23rd January 2019 at 4pm. To register, please follow https://zoom.us/webinar/register/WN_2j23awUbSPCsGQg2yAObBA