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Andrew Spanyi

Quality Insider

How to Be a Transformational CQO

Three tactics that can overcome the obstacles of perception and complexity

Published: Thursday, December 22, 2011 - 12:27

Chief quality officers (CQO) are particularly well placed to lead a major transformational effort. Yet, few do so successfully in spite of having a vested role in operational improvement and having input into what the organization measures and monitors.

Although many CQOs do emphasize continuous improvement and systematic business practices in quality assurance and quality control, a more systemic view is needed when the CQO is intent on playing a leading role in large-scale change. The transformation-minded CQO needs to understand the key obstacles and how to overcome them.

The daunting challenges that CQOs face today include a preoccupation with short-term profits, a narrow view of quality by many executives, ensuring transparency and control, and dealing with an increasingly complex regulatory environment. Although all CQOs need to deal with these situations, the transformation-minded CQO must overcome two major obstacles: perception and complexity.

Perception hinders when senior leaders persist in viewing the CQO’s role as the chief counter of defects and the head of waste reduction. Sometimes this inference is from the behavior of a predecessor CQO who emphasized control and an inward focus above all else. The transformation-oriented CQO needs to disown the designation: master of quality reports and nonconformance expert. She needs to contribute to and at times lead the discussion on strategic direction and sustaining a focus on the customer’s experience.

The obstacle of complexity is a combined result of the proliferation of information technology and improvement methods. It’s common to have multiple disparate systems running financial and customer-touching applications, each creating silos of relevant data. Critical customer data are available to marketing and yet not to customer service. Key production data are available to manufacturing and yet not to product development.

Corporate consolidations increase the level of complexity as processes, systems, and data sources multiply. Similarly, the codification of various improvement methods often result in multiple uncoordinated initiatives operating within the company and resulting in more quality metrics than most companies can possibly monitor. Against this backdrop, CQOs cope with standardizing reporting procedures and ensuring regulatory compliance.

How can the transformational CQO mitigate these obstacles and establish credibility outside the traditional CQO role? He needs to excel in at least the following three areas:
• Measure what matters to customers
• Forge essential partnerships
• Promote an enterprise view

Measuring what matters to customers is the foundational tactic for mitigating the obstacles of perception and complexity. It enables the CQO to raise questions around operational performance and creating value for customers. By emphasizing metrics such as perfect order delivery (e.g., on time, complete, error-free), perfect response to inquiries and complaints (first-time right, complete, error-free), and variance to promise date for new product or service introduction, the CQO can raise thought-provoking questions that directly strike to operational performance and require cross-departmental collaboration.

When customers receive perfect orders and responses to inquiries that are right the first time, they pay invoices faster, and it contributes to increased customer loyalty and revenue growth. The addition of these metrics to the leadership team’s scorecard can offset the imbalance of focusing solely on financial measures of performance, and the ensuing discussion can counter the perception of the traditional CQO role, building the CQO’s credibility and shoring up the perception of business acumen.

Forging essential partnerships is another key tactic to use to mitigate the obstacles of perception and complexity. Establishing a close and collaborative relationship with the chief executive officer (CEO) and the chief operating officer (COO) is arguably the most important of these partnerships for a CQO and fundamental to success. Others may advocate transformation, but, invariably, the CEO leads it as the principal spokesperson in communicating the case for change and the arbiter in deciding which members of the leadership team have what it takes to succeed. The partnership with the CEO is necessary, but it may not be sufficient.

Partnerships with key members of the leadership team, especially the chief information officer (CIO), the chief financial officer (CFO), and the senior human resources (HR) executive, also are crucial. A strong and close alliance with the CIO is indispensable. It is difficult to imagine a successful transformation today that doesn’t rely heavily on enabling information technology, but the CQO, CFO, and CIO often have to contend with others seeing them as simply technical experts, and they all need to make sense out of increasing complexity. Accordingly, they should be natural partners. When aligned in their efforts, they can forge the enterprisewide view that’s necessary for thinking both strategically and operationally, and they also hold the key to the funds and technology to take action.

Promoting an enterprise view is the third tactic to use to overcome the obstacles of perception and complexity. By measuring what matters to customers and forging essential partnerships, the CQO can promote three of the key values and beliefs that are foundational for a systemic view of the business and essential for taking the high road:
• The performance of shareholders is best served when an organization performs to satisfy the needs of its customers.
• Organizations are complex social systems, and large-scale change requires collaboration across traditional departmental boundaries.
• Strategy is best executed through the improvement of the organization’s business processes.

The transformational CQO can facilitate the development of a schematic of the enterprise that’s accompanied by a story of what the company wants to accomplish, taking into account performance for customers, key business processes, and the technology that enables performance. Here it’s important to ask, not tell. This means asking questions about the current and desired level of performance needed to create customer value. The questions should provoke thought and move the leadership team toward a shared understanding of the scope of the organizational challenge and the need for collaboration. When the CQO asks questions such as, “What’s the impact of late raw material purchases on our on-time delivery performance?” and “What’s our success rate in responding to requests for proposal on time, and how does this translate into revenue?” and “What’s our track record in keeping our promises on new products?” then the ensuing discussion can serve to highlight the need for collaboration across departmental boundaries.

Once the transformational CQO takes action on measuring what matters to customers, forging key partnerships, and encouraging an enterprise view of performance, the stage is set to engage in the collaborative business practices needed to succeed in large-scale change. Then, the CQO can play a key role in ensuring that the organization communicates a compelling case for change, emphasizes early wins, maintains focus, and stresses the right pacing for large-scale change.

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About The Author

Andrew Spanyi’s picture

Andrew Spanyi

Andrew Spanyi assists organizations in resolving complex problems by emphasizing cross-functional collaboration and a customer-oriented, process focus. He is the author of: More for Less: The Power of Process Management (Meghan-Kiffer Press,2008), Business Process Management Is a Team Sport: Play It to Win! (Anclote Press, 2003), and Operational Leadership (Business Expert Press, 2010).