"Last year the National Quality Institute surveyed a couple of hundred successful CEOs about the top attributes for leadership. It was no surprise to me that they selected, by a very wide margin, the “ability to communicate the vision of the organization to all levels”, as the number one attribute. Quality is all about how leaders lead, and how people across an organization decide to work together toward a common aim. It is about thinking differently, because we are what we think."
A quality laboratory is one that approaches management based on value adding principles, like the principles of: cooperation, teamwork, a focus on customers, clients, patients, wellness in the workplace, and continuous learning and continuous improvement. People in organizations who choose the quality road think differently, they act differently and the good consequences of what they do are not just good for their organization, they are good for Ontario. The results can be truly marvelous.

In the business world, and increasingly in the public sector, we clearly understand today that there is a financial benefit for the implementation of a strategic approach to the management of quality. A fairly recent study of businesses that received national recognition on quality reinforces the benefits of a focus on total quality. Over a period of five years these organizations had achieved a 91% growth in operating income (the norm was 48% increase), 69% increase in sales (37% higher than the norm), 79% increase in total assets (42% higher than the norm), added twice as many new full time jobs than their competitors, had an increase on return on sales of 8%, and assets improved 9% (3% higher than others).

Over the past couple of years a few well-known companies in Canada have been talking about their quality story. At the Honeywell plant in Toronto, a quality story unfolds. Before the focus on quality management the following could well have formed part of any front line job description: Come to work on time, assemble Part A to Part B several hundred times a day, don’t worry about quality, the inspectors will find defects, don’t leave your workstation, come back tomorrow and repeat. Over the past eight years they have focused on excellence through quality, statistical methods and fact based management, supplier partnerships, customer quality teams, self-directed work teams and business process improvement teams. The effort has been worthwhile. Throughput per person went up, inventory lowered, waste cost as a percentage of output lowered, and they achieved significant results in cycle time improvement. In addition, lost accident time lowered, absenteeism lowered and employee satisfaction went up.

American Express Canada is another interesting story. In 1992 the speculation was that the Canadian business could be annexed to the United States. Card acceptance was in jeopardy, and there were highly publicized demonstrations by business clients against the company. Employee satisfaction was at an all time low, and profits were way down. The management adopted a focus on quality management and the results have been outstanding. Credit card business rose by two million cards and market share doubled. Billed business is also up per month, employee satisfaction at all time high, cycle time improvements have been achieved across the board, new full time jobs have been added, and record profits are being achieved.

Why is it that they, and just about everybody else today, is choosing to focus more on excellence. The reason is not complicated. Such a focus improves the “system” that people work in; this: lowers costs, improves things like patient outcomes, client satisfaction and employee satisfaction, improves employee morale, improves competitiveness, provides more jobs, and helps organizations stay in business.

What about the cost of not being focused on excellence? In partnership with the University of Waterloo, we recently did a study on one hundred small to medium sized organizations. The results were enlightening. The cost elements of quality are called prevention costs (such as training), appraisal costs (such as inspection) and failure costs (errors).

Organizations not focused on quality as a system approach are: spending 32% of payroll on non-value added activity (appraisal and failure), spending three times as much on non-value added than on prevention (such as training and quality improvement) which can save them money. In a health care system already stretched to its limit, you can easily see that the costs of not implementing quality is important to think about and to under-stand. I am sure you can think of many other examples. Quality organizations learn, through applying new knowledge, how to operationalize quality principles into day-to-day work. They focus on setting a direction – an aim. They establish plans for improvement, gain knowledge from their community, customers/clients they serve and seek to serve. They know that improving quality is not about having to change a person or a machine, it’s about improving the system that people work in, with their help. They know that slogans will never compensate the requirement to treat all people decently.

We know there is a financial cost of not focusing on quality; we also now know that there is a human cost. An environment that does not reinforce the principles that drive quality creates a great deal of stress in the workplace. We are now seeing that such an environment, compared to one that is focused on quality and on people, can cause three times the rate of heart problems, three times the rate of mental heath problems, twice the rate of infection and two times the rate of substance abuse. To be in a situation of
high demand and low control impacts health in a negative manner, which impacts productivity and costs, effectiveness and competitiveness.

If you are an MLT leader, know that your efforts to implement a quality culture across your organization will, alongside of assisting the provision of quality services, be directly assisting the lives of people – a noble cause and some-thing to ponder. As an MLT, know that your support for such an initiative can have a significant impact on its success.

In this millennium the subject of quality and how to manage it will evolve into “quality of life” issues, not just about providing quality products and services. The balance of home and work, the impact of decisions on stress, all such elements will gain in importance throughout the quality movement.

I am sure that there are many pockets of laboratory excellence to celebrate in Ontario. I hope that this year we can get a dialogue started with the Ontario government, to develop and implement a Quality Award and those of you who are already working in quality work places will apply. Such a program will help all of us celebrate the achievements of organizations right here in Ontario, add some momentum to the focus on quality, and encourage organizations across the province to get involved. Over the years we have assisted a number of regions, notably British Columbia, Alberta and Manitoba with such a program and with great success! I say it’s about time Ontario got involved in celebrating some successes in quality!

This article was written for the CMLTO Spring 2001 Focus Newsletter. If you would like an article written for your organization newsletter please contact NQI [email protected].