Quality as a Culture

Published in SME WORLD Mar 2014 Issue

“Quality means do it right when no one is looking.” These are the famous words of Henry Ford.

W

hen I was in school, my father would always insist that I write in a good handwriting and keep the notebooks and answer sheets clean and tidy, labeled, highlighted; fundamentally well – organized. My retort would be to focus on the contents and the answers not the cosmetic appearance. Anyway, no one has really commented on my calligraphy skills (or the lack of it) and the appearance of my notebook and journals. Father would reason that many others can write the same quality of answers or even better, what will differentiate your stuff from them? I grudgingly started adopting his advice. Today, I look back and realize how profound and life changing was the viewpoint.

Quality Matters

Years later I was working under a German boss; the Late Mr. Norbert Wilms. He would go around the plant every day, take photos of dirt, breakages, loose wires hanging, unclean premises, broken drains – the list was endless. One day he wrote a letter to the plant owners saying that a drain cover in the bathroom was rusted and should be changed. Everyone was flabbergasted. Is this even an issue in a multi-crore power generation plant? He said that everything matters however small or big. Today you consider a drain cover as trivial, tomorrow you will say a small raw material issue as minor and allow under deviation; one day an alarm will be ignored and when a turbine crashes then everyone will wake up. Who decides what is trivial and what is not? And why should we settle for mediocre when we can always do better.

Ordinary Approach

Indians are often ticked for their “Chalta Hai” attitude. It is embedded in us as a supplier, buyer and end-user. Poor workmanship, late deliveries, inaccurate dimensions or alignment, incorrect quantities, ineffective communication are all part and parcel of this “Chalta Hai” approach. If we ask an electrician to visit our house/ business premises for some work, we know that he won’t visit without repeated reminders. The job that is done will probably require rework too.

We look at quality as some extraneous factor, as an element for compliance to get the material or service approved and bills passed through quality control. It often represents some paper work to complete an audit and get a certificate for a particular process/ product. This is how many enterprises and individuals view quality.

Mindset for Quality

Quality is an opportunity; it is a plinth on which businesses can achieve stellar success. It is Quality that creates Brands for which people pay a premium. But for that “Quality” has to be embedded in the basic fabric of the business and individual mind-set. Everyone has to perform routine tasks with quality and competence while aiming for improvement at each stage without an explicit demand or need.

SME players often feel that they are small, resource-crunched and hence just being able to meet orders and deliveries is an achievement. Wrong! The tea stall vendor at the street corner in all likelihood will go out of business if another vendor offers quality tea in the vicinity. And the quality tea stall has larger concrete prospects of turning into a restaurant due to repeat customers and word of mouth appreciation plying a mundane item as a cup of tea.

Quality is not an act, it is a habit. ~ Aristotle

SMEs need an “Operating System”

The sudden death of Tata Motors Managing Director Karl Slym was in the news on Jan 27^th 2014. He died on 26^th Jan in a Bangkok hotel while attending some work engagement. Immediately the papers started reporting who will be taking over at least for the short term. However, there were some statements of leadership gap, vacuum etc. 

Imagine what will be the plight of a MSME if they incur such a sudden loss! Forget death, what if the owner is suffering from a debilitating illness and is bed-ridden or one fine morning some key person resigns and quits. It might sound horrible but disaster does strike and problems come unannounced. The impact is horrendous in certain cases. 

I met a person few days’ back who quit his erstwhile company and now the company is cutting down production and shedding human resource since they are unable to manage. 

Companies like Tata have layers of management staff and professionals. They can easily shift people laterally to fill up a vacuum to tackle any crisis. They also have a well-thought of succession plan. Thus, there is not much dearth of talent and people rise to the call in such occasions. But the most important feature of these companies is the way it functions on a daily basis. They are completely system – driven. Of course some decisions and deliberations are dependent on human intervention but the assembly line and production will continue like any other day.

Slym’s death again brings back the focus on the routine topic of making system-driven organizations. The case is strongest for SMEs. They must have a strong operating system because they do not have large number of people working at various levels and there is no redundancy of responsibilities or skills.

No one is indispensable, but in SMEs . . .

Though we often say no one is indispensable but in small businesses the case is different. Here a single person often multitasks and handles disparate activities too. Due to the lack of a well-defined system and proper training, lot of work is done haphazardly. Information is stored in bits and pieces often on scrap of paper lying on our table while having a telephonic conversation. A buyer might just call up and change the dimension of an item. The person receiving the call in all probability will forget to communicate it to production and the wrong item will be delivered.

There are extreme issues in small businesses like information is jumbled into a single file or too many files are made with no clue of the purpose of each. Sometimes any person handling the function as stop gap starts making his/ her own filing system.

Computer system is another black hole. Files are saved randomly with no regard of version, content, obsolescence etc. If a computer crashes, no one knows what data has been lost until the need arises.

At times it seems like small businesses thrive in chaos. Fact is they have poor efficiency and suffer huge loss of productivity.

What should we do?

Start building your small business with proper systems and processes. Use the right tools and methods to overcome such catastrophe. They create adequate support for people to function efficiently. For example: Order Management is a system. 

You get an order, manufacture the item and ship it. There is an input, process and output. Process is how you make the system work. How will the order be received, who will receive it, where will it be stored, who will process it, when, how, how will the packing be done, who will ship it, who will confirm that the shipment has been completed and all statutory information is correct. Who will inform the customer about the completion of the order? Who will manage customer queries and how? 

A detailed process for any system is the golden key for efficiency.

Have a look at the Total Integrated Baldrige Excellence System Framework. It is a good model for developing your company’s operating system. It will give an idea on which areas need to be focused on and standardized. How will you manage your customers and employees? How will you plan for the future and expand the knowledge that you have gained? How will you create the Leadership pipeline? How will you get work done in your business everyday without fail? 

Start with the basics. Identify the functions. Establish systems. Define process and workflow on paper. Create formats and fonts for data collection, communication and reporting.

Go to each and every work area regularly and see how things are done. It will give you an idea to define systems. Routinely audit your systems to improve and check deviation. As Deming suggested – Plan – Do – Check – Act.

Deliberate

Any business has common functions like order, procurement, production, planning, IT, materials and distribution. If you are able to create the right operating system for each function and develop strong processes, your business will remain resilient and prepared to face distractions, anomalies, calamities. 

Benjamin Franklin said – “By failing to prepare, you are preparing to fail.”

Social Media for Small Business - Is it worth the time?

This article was published in Indian Management Jan 2014 Issue.

Education and Enterprise

In the Mahabharata, Abhimanyu entered the Chakravyuh but could not make his way out. He was not short of valor or intent but lacked knowledge on how to tackle it.  Business world is replete with examples of people who made it big by the sheer dint of their hard work. Education was often not their primary strength. Dhirubhai Ambani’s success is a case in point.  

There are two schools of thought - one that feels education has no bearing on one’s capacity to setup and run an enterprise, the other which believes education to be the very foundation element for successful enterprises. The issue is completely debatable and there will be enough examples to prove both thoughts.

However, companies like the Reliance Group did not grow simply due to the sharp business acumen, instinct and common sense of its promoters. They systematically developed a professional team to take on the world. Every successful MNC or small business today has educated and experienced people at the helm of affairs.

Chanakya’s role in establishing the Maurya Empire by methodically defeating the Nanda Empire is historical. He was the advisor to Chandragupta Maurya and his son Bindusara. A learned man in the field of economics and politics, he guided the emperors to their success. 

The most important function of education at any level is to develop the personality of the individual and the significance of his life to himself and to others. ~ Grayson Kirk

Building an Enterprise

Setting up an enterprise requires a vibrant skillset and intellectual capacity to navigate the system by complying with each and every aspect.

Theoretical knowledge to practical application

Suppose the enterprise is setup to make DC motors. One will need to understand the science behind DC motors, its application and how to make good quality motors.

Functional Knowledge

What are the various functions necessary to run an enterprise? What skillset will be required to complete the functions? How many people will be needed to manage the function? These are generic concerns.

Accounting, Legal and Statutory Compliance

Every enterprise however small or large has to compulsorily adhere to each applicable legal and statutory requisite without fail.  We cannot claim ignorance as the cause for any non-compliance. The legal hassles in such cases can often lead to closure of the enterprise altogether. The onus is always on the entrepreneur in-charge.

Management Skills

Certain people have very good idea and knowledge of say automobiles and can setup a good garage to fix vehicles but might not possess the necessary management skills to run the establishment successfully. Decision making is an everyday aspect of a business. Not all decisions can be made on gut feel, guess work or biased assumptions.

Without education, one can start a venture but will most definitely need structured learning and knowledge to scale-up and sustain.

Value of Education

In school, we were taught a Shloka in our Sanskrit class which encompasses the true subtext of education.

vidyA dadAti vinayaM, vinayAdyAti pAtratAM |

pAtratvAddhanamApnoti, dhanAddharmaM tataH sukhaM || 5 ||

Translated into very layman terms it means knowledge gives discipline, from discipline comes worthiness, from worthiness one gets wealth, through wealth one accomplishes good deeds and from that derives joy. All these are necessary for enterprise to succeed.

We often confuse between literacy, education and knowledge. They are not frivolously interchangeable. Literacy means able to read and write, while Education is developing a skill through accumulation of knowledge through learning. It equips us to think. Knowledge is the outcome of our perception, learning and reasoning. Education helps us to understand our surroundings and often invoke innovation.

The one real object of education is to have a man in the condition of continually asking questions. ~ Bishop Creighton

With education we build a compendium of theoretical knowledge. There is a logical flow in our education system which structures the knowledge brick by brick and not in random packets.

Simulation is a new method for learning. It is used in medical science, for learning to navigate aircrafts and trains even in case of financial modeling. This use of technology is quite contemporary and helps develop strong conceptual clarity.  

Learning through case studies is another method which can train people to improve their though process and cognitive skills.

Many curriculum have compulsory factory visit and training to expose students to real life situations and motivate them to get a first hand feel. This is like a driving school where one hones driving skills.

With education our plinth is made stronger and prepare us to face the challenge of operating an enterprise successfully. We learn to understand markets, consumer preference, change in technology trends and global economic fabric where our enterprise finds its existence.

In German society, it is said that the education system is designed to create thinkers and doers. It is the job of the thinkers to learn, create plans, allocate resources, create backup plans and basically provide for all possible outcomes of any event. The plan is created in such detail and split down to sub-segments that comprehension is effortless. The doers are expected to use their skills to simply execute the plan without improvisation or questions. This is often said to be the attribute which gives them supremacy in many fields.

Education opens your mind to seek answers, to more questions, or philosophy in life, about our approach towards the enterprise, our customers and their wants, how we treat our suppliers and employees, respond to the environment and create a sustainable venture. We can create an enterprise without education but will not be able to sustain for too long.

The principle goal of education is to create men who are capable of doing new things, not simply of repeating what other generations have done - men who are creative, inventive and discoverers. ~ Jean Piaget