Quality is the key to your company's health - are you looking in the right place?
It may (should!) be hard to believe now, but there was a time when companies would manufacture products or deliver services and then carry out quality checks. In both physical product and service terms this often involved inspecting a small percentage of output for issues. Any work deemed unacceptable had already used the entire input of materials (often irredeemably), labour and time to produce.
Over time the wastefulness of this system led firms to shift their quality checks to the front line. Many now examine materials before production, and design activities and train staff to decrease the chances of quality failure. This identification of problems or potential problems early, known as quality assurance, saves materials, time, and labour.
Inputs to failed processes are often not nearly as costly as the reputational damage that comes from poor quality or late delivery of products and services, however. Similarly, this can have disastrous effects across our businesses if we ignore a department which rarely make the headlines.
Genuine, well-developed corporate social responsibility programmes can change the lives of people in our value chains. This is quality assurance in CSR terms. Firms which design their supply chains to minimise the damage they do can raise communities out of poverty and improve lives. Considering the good that these projects and structures can do in advance prevents failures and can drastically reduce reputational risk. If we look, for example, at how a company like Unilever has embedded responsibility in its operations, we can see both the good it can do and the benefits to how the firm is perceived that flow from this strategy.
Even viewed in a slightly more cynical light, research by Harrison Hong and Inessa Liskovich - https://hbr.org/2015/06/do-regulators-go-easier-on-socially-responsible-firms - has shown that when things do go wrong, incurring a fine, that sanction is lower for firms that demonstrate greater social responsibility.
By contrast, some firms continue to insist on taking risks with their reputations by dealing with problems as they occur, rather than working to prevent them beforehand. I was recently surprised, though I probably should not have been, to discover that a services company with many thousands of employees in several countries and a recent track record of censure for several high profile misdemeanours and failures has a CSR staff of two, for example. I have a feeling that other organisations which have been in the news for incidents that caused serious damage to their reputations probably have a similar attitude to CSR.
We have come to see quality assurance as the ‘obvious’ thing to do. Why waste resources on checking what has already been done when we could monitor inputs and design processes to eliminate the need and retain our reputations?
Why ignore corporate social responsibility in our firms until something goes wrong, and then flail around hoping to repair the damage, when proper investment in CSR can boost our reputations now and save them later?