Quality process meme

Once again trying my hand at memes. Let me know if you think it works.

This one follows on from the discussion in this post a couple of years ago.

   

Are you in the 77%?

For the last few weeks we've been talking about audits—how to approach them, and how they can go wrong. But a couple of years ago, TÜV SÜD America published a white paper about a study they had conducted of over 500 companies, on how those companies used their internal audit program. (You can find the paper here.) What they found was that a whopping 77% of companies used their internal audits merely to satisfy the requirements of ISO 9001, so they could hold onto their certificates. Of course certification is important, but those numbers suggest that far too many companies are missing out on the concrete benefits that internal audits can provide.

Many of these benefits are things we have discussed already: most significantly, that if something is wrong you want to find out before your customers do. But the paper also brings out some themes we haven't emphasized yet.

• Audits can help you assess how well an organization is aligned around its targets. I've seen cases where each department's goals and metrics flow seamlessly from the level above them, and all cascade down smoothly from the corporate goals defined by top management. I've also conducted audits where I asked senior people in responsible positions how their goals aligned with the corporate targets and gotten back nothing but a blank stare.
• In much the same way, audits can give you a reality check on how well communication is working between teams, or between levels in the organization. We've all seen times where Department A describes how they hand off their work to Department B, and then Department B describes the exact same hand-off so differently that it's hard to believe they mean the same thing. Similarly, if top management tells you that the company is in the middle of a bold transition to a radically new way of working, it's not unreasonable to expect that people on the floor might have heard about it. They might not be able to quote the initiative verbatim*, but if they've never heard of it at all the company might want to follow up and find out why not.
• And audits can find and highlight best practices. This is an under-appreciated feature of the audit program, but an important one. If someone off in a corner has figured out a better way to do his job, he might never have thought to tell anybody. But if the new method works better and makes life easier, everyone benefits from learning it. I worked for some years in a department where internal auditors were explicitly required to find something good to say about each department we audited, and to look hard to find best practices. It was good coaching and I'm still grateful for it.

All of this is to say that audits are a critical support to internal communication. Communication is difficult: even in small groups it can go awry, and in large organizations it can start to resemble the party game "Telephone." Peter Drucker highlights this awkward fact in his book The Effective Executive: 

When General Eisenhower was elected president, his predecessor, Harry S. Truman, said: "Poor Ike; when he was a general, he gave an order and it was carried out. Now he is going to sit in that big office and he'll give an order and not a damn thing is going to happen." 

The reason why "not a damn thing is going to happen" is, however, not that generals have more authority than presidents. It is that military organizations learned long ago that futility is the lot of most orders and organized the feedback to check on the execution of the order .... All military services have long ago learned that the officer who has given an order goes out and sees for himself whether it has been carried out. At the least he sends one of his own aides—he never relies on what he is told by the subordinate to whom the order was given. Not that he distrusts the subordinate; he has learned from experience to distrust communications.**

In most organizations it would be impractical to ask top management to go check on the implementation of every policy and procedure year after year. The solution is to implement internal audits.

__________

* Compare, for example, my remarks on the "well-known auditor trick" of asking employees to explain the Quality Policy.     

** Peter Drucker, The Effective Executive (New York: Harper Collins, 1967, 2006) p. 141.  

          

"What does it take to bribe you?"

Someone actually asked me that once, during my years as an auditor: "What does it take to bribe you?" Fortunately I saw the smile and knew she was joking, but the question still took me by surprise. 

Let me give you a little context. I was at a startup back then, and we were working to get our initial certification to ISO 9001. Departments had been writing procedures for a couple of months, and we were just about to start our very first round of internal audits. I had walked over to Purchasing, to confirm the time for their interviews the next day. The woman I spoke to confirmed the time, but she was obviously very worried about being audited because she'd never been through it before and didn't know what to expect. So after she checked her calendar for when I was supposed to arrive, she giggled nervously and blurted out, "What does it take to bribe you?"

To be clear, I've never been seriously offered a bribe in exchange for a good audit report, and of course I wouldn't accept it if I were. For that matter, I've never worked with an auditor who explicitly asked for a bribe. All the same, I've heard stories. They are always vague about the details: "I heard from this guy I know that he once had an auditor who ...." But they were still troubling. One story I heard was about an auditor working for one of the big registrars (never named), who would let it be known before he arrived that at the Closing Meeting he expected to find a bottle of good Scotch hidden in a convenient place in the room so that he could stash it with his papers and laptop as he made ready to leave. And all I could do was to shake my head with incredulity: first, of course, that he would sell his professional judgement at all; but second, that he set the price so cheap. So at the same time that I was indignant he had asked for a bribe in the first place, I was also thinking, Really? One lousy bottle of Scotch? Is that all your integrity is worth?

I did once work with an auditor whose price appeared to be cheaper than that, though he never said it openly in so many words. He was an external auditor working for one of the registrars, and I'll call him "Moe" (which is nothing like his real name).At the time I was working for a different startup from the one I mentioned above, and we were going through our initial certification audit. Moe was the Co-auditor in a two-man audit team. During the first few interviews, Moe said very little and was generally pleasant. But then the audit team got to our warehouse. And out in the front was a big vending machine with cold soft drinks. Moe asked for a Coca-Cola. The Warehouse Manager explained that the company didn't own the machine, so he couldn't just reach in and give him one. But he added that of course Moe was free to buy his own drink, as long as he was careful not to spill it as he walked around.

Moe just shrugged and said, "Never mind." But from that moment, he began to write Nonconformities at a brisk pace. I think he wrote 30 in the Warehouse alone. One or two of those were perfectly valid, but many of them were just silly. Fortunately the Lead Auditor overruled him, throwing out the most vacuous ones and downgrading many of the others to Opportunities for Improvement. But we all saw the change in Moe's demeanor, and it all seemed to happen right around the time we didn't give him a free soft drink.

The next year we had Moe again, this time as the only auditor. We were partway through the first morning when Moe asked if he could have a Coca-Cola. This time I jumped up out of my chair, fed my own quarters into the machine, and brought him one. Moe was pleasant and cheerful for the rest of the audit. And in the end he gave us only two findings (both trivial to resolve).

Was this bribery? Nobody ever said anything explicitly about any quid pro quo. But the simple question of whether we gave him a free Coca-Cola seemed to make all the difference in how Moe approached the audit. Probably there's a better explanation; but when the audit was over my professional opinion of Moe was not very good. We kept the same registrar after that, but we got a new auditor. I never saw Moe again.

And of course that's how it works for anybody. People remember what you do; and if you are shady or unethical, clients will avoid you and opportunities will be steered somewhere else. Even if you don't count the massive damage to your own self-respect, the sullied reputation is a really big price to pay for a bottle of Scotch or a Coca-Cola. It's never worth it. Don't go there.

So what did I tell the nervous young woman from Purchasing? Fortunately I understood that she was joking, and that what she really meant was that she was worried and didn't know what to expect. So I smiled as warmly as I could and told her, "I'm a big sucker for a logical argument. If you can show me why the things you do make sense, that will carry you a long way right there." And that seemed to help.

           

How audits grow a Quality mindset

We've been talking about audits in the last few posts, so I thought it was very timely earlier this week when I ran across an article called "3 things to love about internal audits." The author is Sara Adams of Greenlight Guru. And while some of the points she makes are ones we have discussed before, she also takes the topic in new directions.

The three things Adams loves about internal audits are these:

• Internal audits empower quality-driven, cross-functional teams.
• Great internal audits spot potential issues before they become real problems.
• A risk-based approach to internal audits makes for better prioritization.

We've discussed her second point at some length when talking about how audits are a value-added activity that uncover areas of the business which need attention. (See, e.g., this post.) And her third point is a good one that might be worth deeper exploration in the future. But it's her first point that I want to talk about today.

It turns out that one of the best ways to engage your people with the Quality system is to ask them to help with internal audits. Don't limit yourself to the Quality department. People across the organization can be trained to do audits, if they show an interest and if their managers are willing to let them put in the time. And the benefits show up in several ways.

One benefit is that your auditors bring a variety of perspectives to their work. Quality professionals can get in a rut like anyone else; if all your audits are conducted by Quality personnel, there's a risk that they will always follow the same predictable lines. But if you've got one auditor from Project Management, another from Manufacturing, and another from Purchasing, they will be attuned to different kinds of risks and will end up asking different questions. This diversity of approach can only strengthen your audit program.

Another benefit is that when people from multiple departments are all trained to do audits, they come to understand why the Quality system has the rules it does. Sometimes Quality rules can look pretty arbitrary if you don't know the reason behind them. But as you train people to carry out internal audits, they learn how many different things can go wrong and why the rules are in place to begin with. Then when their colleagues start grumbling about this or that requirement, they can explain where it came from. It's an effective and low-key way to let Quality thinking seep into your organization.

I once worked for a company that took this one step farther. After one of their brightest software architects had one-too-many fight with the Quality department, they assigned him to a two-year stint working in Quality and made him responsible to get ISO 9001 certification for a recent acquisition. He was really good in his new role, and I learned a lot from working alongside him. What's more, he was able to communicate with engineers who felt the way he used to feel, because he understood their point of view.

Organizations often struggle with the question how to encourage a Quality mindset across the board. One way is to enlist people from many different departments to help with internal audits.