Fighting Back Against Unpredictable Business Risk With A Quality Culture

Getting it right the first time

The business case for developing and maintaining a quality culture has never been more compelling. A convergence of factors has made doing so both necessary and challenging. Growing complexity and reach of global supply chains provide greater optionality, but that same complexity may also increase the opportunity for lapses in quality and weak oversight. Mandates to reduce costs may come at the expense of compromises in process and operations, and when such mandates are not accompanied with quality assurances, the result can be disastrous.

Entering new global markets, as well as growth through mergers and acquisitions may also lead to unintended compromises in quality, especially when assimilating two different cultures in the case of a merger or acquisition or entering into a new market which may have vastly different expectations. Board-level mandates to increase EBITDA may also cause quality issues when an overwhelming demand for short-term growth may also cause a series of unintended consequences. And finally, macroeconomic realities like tariffs and trade wars may cause an organization to rethink their supply chains and break away from established and proven partnerships, entering into new deals with partners who have yet to be prove themselves.

What is a quality culture

Everyone has a different understanding of quality culture, but it is fundamentally rooted in improved operating performance and the ability to perform more effectively. The result in greater productivity and less risk, less re-work, and fewer interruptions to the supply. The concept applies to any industry, but in the case of pharmaceuticals, the concept of quality and achieving a “right-first-time” mentality is essential and potentially life-saving.

Al Riles, former principal at Tunnell Consulting, defines quality culture by talking about its actual benefits: “Quality culture generates improved operating performance so the organization is performing much more effectively. There is greater productivity and less compliance risk. There is less re-work and fewer interruptions of supply to the market, which often results in lost revenue. So if you have a culture in place that drives these types of outcomes, that is what you want to embrace to ensure the organization is moving in the right direction.” Quality culture is characterized by multiple key components:

  • A quality culture is characterized by motivated employees who consistently strive for high levels of quality.
  • Achieving a quality culture is an ongoing process of continuous improvement and a mindset shared by all.
  • A quality culture is led by example, and leadership will be visibly engaged in supporting the development of a quality culture, and will engage and motivate others to do the same.
  • A quality culture is the “sum of all parts” of the organization and needs to be continuously monitored and fine-tuned as the organization grows.

The benefits are significant. Beyond the superficial, maintaining a quality culture will generate improved operating performance, and in the case of the pharmaceuticals and life sciences industry, benefits include greater productivity and less risk in terms of compliance. In such an environment, there tends to be less re-work and fewer supply interruptions, and as a result, the risk of lost revenues will diminish.

Right-first-time mentality

Manufacturers of everything from consumer goods to pharmaceuticals have their own approaches to manufacturing quality, ranging from a “fail-fast” approach that allows for incremental improvements, which works very well in the case of software where launching a “minimum viable product” (MVP) is an acceptable way to get a product to market and make incremental changes along the way. MVP won’t work for all industries though, and a more studied “right-first-time” approach works best in highly regulated environments such as pharmaceuticals.

Not surprisingly, leadership and employees alike often do not understand what a successful quality culture looks like, and often there are divergent ideas on what that quality culture vision should be. As such, the first step of a successful quality culture transformation is a comprehensive evaluation of all parameters that affect quality throughout the organization. Success involves engaged leadership, easily understood objectives and effective communication from the first point of on-boarding and training.

Other factors of success include a centralized project management framework, a compelling message, and metrics to monitor and report on progress. The quality culture needs to be continuously monitored, with a process created for capturing lessons learned from both failures and successes.  

A cultural shift

A “right-first-time” quality culture is part procedure, and part cultural shift. It can’t be affected with simple C-suite mandates – management needs to inspire staff members, get them involved in the process, and potentially initiating changes to technology and process on the back end. “You have a culture in place where everyone embraces that fabric that includes the right behaviors and values, rewards and recognition, clarity on roles and responsibilities,” said Riles. “The working fabric of the company gets well-defined because everyone is functioning around the same key elements that constitute what is considered to be a strong corporate culture.”

There are obvious challenges to creating a right-first-time environment. Primarily, implementing such a shift means having to deal with employees who are in a mindset of doing things the same way it’s always been done, and clinging to their traditional roles. When emphasizing a culture of quality, it is incumbent upon leadership to make sure those employees understand the process that requires them to define the change, and to prepare the stakeholders for what’s coming – and make sure they understand the impact it’s going to have on the product, throughout the organization, and to all of the people in it.

This represents a top-down, bottom-up approach. When you need a change in quality culture to happen, it has to happen where the work actually takes place.

This cultural shift – besides creating an environment of quality – also leads to greater employee loyalty and less turnover. “That comes from the fact that they are being rewarded and recognized for their contribution,” said Riles. “It has an impact on employees wanting to work for a company that is generating a product that meets customer needs. They have pride in the fact that they are producing a high quality product – and there is an emphasis of quality over just production.”

Make it measurable

Everyone wants quality, but nobody really knows what it means unless metrics are in place to measure it and put it out in the open. According to Riles, “A lot of it has to do with being clear in terms of defining and communicating the quality values. We do this by getting the organization to incorporate quality values into the performance management process, and publicizing when quality has overruled manufacturing and why.”

Defining metrics is part of the process and without that definition, quality initiatives will be reduced to simple and meaningless slogans. Having clear metrics, making the quality culture measurable and visible accomplishes two goals: It provides a framework to measure success, and it also creates more visibility and creates another way to encourage people to embrace the quality culture. Those visuals will also provide a way to remind people where they stand on the metrics.

Making it measurable requires defining the terms, expectations and values. This becomes a mechanism to reinforce the commitment to quality.

Case study

In one example of creating an effective quality culture, Tunnell Consulting worked with a pharmaceutical manufacturer which had been exposed to increased regulatory inspections, compliance challenges and quality deficiencies as a result of rapid growth.

An initial assessment uncovered existing strengths that could be leveraged, as well as cultural challenges that had to be better understood. Rapid growth in the biologics division of a pharmaceutical manufacturer had resulted in increased regulatory inspections, compliance challenges and unexpected quality deficiencies. To meet the company’s goal of achieving best-in-class quality, Tunnell Consulting conducted an assessment and created a roadmap for a sustainable quality culture to allow the company to improve operating performance and productivity, reduce compliance risk, maintain a reliable state of quality and compliance, and grow the business without further quality disruptions. The first step was to establish a cross-functional Quality Improvement Team to assess quality and compliance issues and recommend remediation strategies. Tunnell’s assessment addressed the process and people issues that make up the organizational culture, and uncovered several strengths that could be leveraged along with some cultural challenges. Some of the challenges that were getting in the way included divergent views between sites about the state of the company’s quality culture. An actionable set of recommendations included both quick wins and medium- and long-term wins, including steps in leadership development, strategic planning, organizational structure, on-boarding and training, succession planning and career development, rewards and recognition, process improvement and metrics.

Making it happen

A “top down, bottom-up” approach effectively builds a quality culture by holistically addressing the entire organization and getting across-the-board buy-in, from the board room to the production floor. This requires a two-front approach – communication of the goals and benefits of quality culture, and gaining the cooperation and buy-in from all personnel. Often the latter will require specific steps such as coaching and mentoring, as well as reward and recognition.

Achieving the quality culture requires coaching and mentoring. This starts with seeking out individuals in the company that are the bright stars and individual contributors, and coaching them and mentoring them on how to implement the tools and processes needed to develop and maintain a quality culture. Often those individuals, if they are not yet leaders, will become future leaders of the company.

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