What is the importance of quality to organisations and why does it matter? Having raised the issue of brand in a previous blog, the impact of product failure or a service that doesn’t deliver what the customer expects has a significant negative impact on how you or your business is perceived in the market place.

Further, with the growing prevalence of the Social Media, poor quality in any way can be broadcast to an extremely wide audience. Branding is one negative, but the other issue that is of significance is the cost of rectification. This can take the form of product replacement, product repair, partial or full refund, and the customer’s claims of productivity losses, which in some industries can dwarf the cost of any repair or rectification. Confronting the issues and discussing them with the customer is also necessary, which is likely to be a hostile situation. You will need to justify the failure and your part in this. These issues will never be clear-cut and assigning responsibility will be an extremely contentious, costly and time-consuming exercise. I can assure you that nobody emerges from these types of disputes as a winner. Genichi Taguchi (who in the 1950’s was the first person to apply statistics to improve product quality) alluded to this when his observation lead him to the conclusion that poor quality was reflected in the loss a product imposes on society after the product is shipped.

So is quality and the supporting quality standards important for your business? I believe that quality standards should always be set. These standards need to be appropriate for the business. Do you need to undertake full ISO accreditation or the certification relevant to the industry you work in? My experience is that to undertake full quality certification is very expensive to implement and for ongoing maintenance.

So the answer to "What level of quality standard is required" is that it depends on what rigour is required by your business to document processes, have traceability of products & services sold and what are the risk faced by your business and the stakeholders in your business if you do not have some form of process control. You must consider the losses you could incur if something goes wrong. Do you have professional indemnity or public liability insurance? If you do, but no process to avoid claims, how long will you be insured for? If you continue to deliver the wrong or defective product, if your new products and services fail to advance your customers business or through the supply of faulty products or services your customer business is at risk, what then is the growth potential of your business? While quality and quality systems do not prevent failures, they certainly draw attention to where failures may occur. Can you imagine a pharmaceutical supplier not having the highest level of quality systems?

I have been involves in many implementations of quality systems at large, medium and small sized organisation. In many instances, there was an expectation that this should be done because the competition was doing it, or we could not compete for business because we didn’t have a recognised quality system. I think this is the wrong reason to develop quality systems. Quality processes and systems must add value to the business and to your customers. Further when quality techniques are applied correctly to business, R&D, manufacturing, assembly processes, recruitment, management processes, customer service etc., the focus must be on improving or at the very least maintaining the the customer’s current experience. The benefit to the business must outweigh the burden of the cost. If costs are onerous and customers do not benefit from quality initiatives why would organisations pursue quality improvements? Peter Drucker who practiced as a Management Specialist from the 1950’s onwards believed that quality in a product or service is not what the supplier puts in; it is what the customer gets out and is willing to pay for.

In one of my businesses we had a product failure that was delivered to the customer (our quality system was not rigorous enough to pick up the failure before it was delivered). The irate customer notified us that the product was not to standard. Our response surprised the customer. We immediately sent somebody to a remote site to rectify the fault and reviewed with them, the quality system that allowed a defective product to be delivered. Changes were made to our process (quality systems should be dynamic) as a result of that discussion which, I believe, prevented future recurrences of defective products being delivered. As our employee left the site, the customer loaded his ute up with a further $10k of work! A poor performance on our part was turned around to our and our customer’s advantage. This simple example re-emphasis my belief, that quality and the supporting quality systems are a necessary and important part of the products and/or services that you offer.

If you would like to discuss this further or review any aspects of your business please contact Robert on This email address is being protected from spambots. You need JavaScript enabled to view it.  for a 16 point business audit and report