Best practice report: 8 key areas for measuring quality effectively

Are you really as good as you think you are? An enterprise-wide quality measurement program can help you assess just how effective your key processes are. Here are eight key areas you need to focus on to get it right, according to an APQC best practice benchmarking study.

Although organizations have been devising ways to measure quality for decades, many have not elevated the measurement of quality to an enterprise-wide concern. Most efforts focus on measuring quality within specific supply chain or product development processes, or they focus exclusively on results or finished products.

In 2011, APQC conducted a Collaborative Benchmarking study to find out how organizations track and measure quality in processes throughout their businesses. The study team considered the approaches of all the participants in the study, but it identified four organizations with particularly exemplary practices in quality measurement: Altera Corporation, Caterpillar Inc., Chemonics International, and Textron Inc. The team examined these organizations more deeply.

Based on the information shared in the study, most organizations are still only beginning to develop effective approaches to measure quality. Nonetheless, the experiences of the study participants revealed key foundational practices required to mount a stable and effective quality measurement system. The study team also noted several emerging practices that the four exemplary organizations are leveraging to get even better results. All the foundational and emerging practices uncovered during the study are listed in the table below.

Because measuring enterprise-wide quality is such a new discipline, these practices should be considered as stepping stones toward more defined best practices that organizations will develop over time. 

Foundational and emerging practices in quality measurement

#1: Align Enterprise Quality with Strategic Goals and Initiatives

Foundational Practices

• Align all quality activities—not just a few—with enterprise objectives.
• Gain senior-level commitment to enterprise-wide quality to boost strategic alignment.

Emerging Practices

• Embed quality activities into key processes across the organization.
• Fully integrate ISO certification and auditing programs into enterprise quality systems.

#2: Establish Structures and Resources to Get the Desired Results

Foundational Practices

• Designate an individual as the owner of the quality function, with ultimate accountability for quality activities.
• Establish a strong quality group with clear responsibilities, directives, authority, and resources to govern quality activities.
• Allocate appropriate resources to the quality function based on the organization’s needs and goals.

#3: Create Supporting Policies, Procedures, and Tools—Not Mandates

Foundational Practices

• The quality function (or group) supports and evaluates quality throughout the enterprise but does not mandate the details of how quality is achieved.

Emerging Practices

• The quality function leads continuous improvement efforts in various business units, acting not only as a quality expert but also as the project manager.
• The quality function creates and maintains a set of standardized quality tools, including enterprise quality data dashboard systems that allow for detailed analysis and reporting.
• The quality function oversees enterprise compliance and assessment of product and/or service quality (e.g., ISO certification and federal requirements).
• The quality function provides quality-specific training to staff throughout the organization. Several of the exemplary organizations have internal universities that provide in-depth quality training to staff.

#4: Select, Define, and Standardize Quality Measures Across the Enterprise

Foundational Practices

• Define and enforce standard guidelines for designing quality measures.
• Report no more than 10 quality measures at the executive level.
• Trade lagging outcome measures for leading predictive indicators where possible.

Emerging Practices

• Create a quality scorecard using both internal and customer data.

#5: Allow Business Unit Leaders to Establish the Performance Targets for Enterprise Quality Measures

Foundational Practices

• Allow business unit leaders to establish the performance targets for enterprise quality measures.
• Establish performance targets at the business unit level and ultimately approve them at the enterprise or executive level.
• Report Quality Measures at Least Quarterly.

#6: Report Quality Measures at Least Quarterly

Foundational Practices

• Collect enterprise quality data electronically through spreadsheets and intranet data entry.
• Aggregate metrics using individual data components.
• Report quality measurement results to business unit leaders at least monthly and to the rest of the organization more frequently.

Emerging Practices

• Automate quality data collection.
• Use a dashboard that provides drill-down detail.

#7: Design Quality Measures to Focus on Value-Added Quality Activities and Core Strategic Objectives

Foundational Practices

• Align quality measures with customer expectations throughout the value chain, not just during the delivery process.
• Connect quality data to continuous improvement activities.
• Link quality measures to compensation.

Emerging Practices

• Share with all employees a central dashboard linking individual efforts to organizational objectives.

#8: Use Measures to Promote a Culture of Quality

Foundational Practices

• Celebrate quality practices and achievements with awards, events, or other activities and incentives.
• Create challenging goals that shift according to periodic reviews.

Emerging Practices

• Train all new hires on basic quality management principles.
• Provide transparent access to quality data to everyone in the organization.

Conclusion

By establishing an enterprise-wide quality measurement program, an organization begins to develop practices that increase the value it gets from investing in a quality management infrastructure. The practices above can help organizations as they form new processes and generate support for quality improvement. Some of these practices stem directly from what we already know about measurement programs in general, and others speak more directly to the concerns of a quality-centric program. Use them to inform quality measurement decisions for the entire organization.

About APQC

APQC is a member-based nonprofit and one of the leading proponents of benchmarking and best practice business research.

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