Building upon the inaugural Global State of Quality launched in 2013, ASQ has again partnered with APQC to provide a comprehensive, quantitative global view of the state of quality.

The ASQ Global Stage of Quality 2 Research—Discoveries 2016, provides a deep analysis of quality, including current gaps and opportunities. The Discoveries 2016 report seeks to advance the understanding of quality and continuous improvement’s role and impact in organizations worldwide and what it means for businesses, communities, and society in the future.

During the analysis of the data, key themes and findings emerged, with the report organized into five themes. The Auditor Online will bring you highlights from the report in a series of articles starting with the first key theme: “Quality: Strategic Asset, Competitive Differentiator.”

Before we take an in-depth look at the first theme, three statements were identified in the report that represent explanatory factors used extensively throughout the analysis. These are highly related to the variability in the application of quality practices. Interestingly, these statements are consistent with the research from 2013:

• There are significant differences in the use and application of quality practices between organizations that are manufacturing-focused and service-based. However, this gap closed slightly in the current report period.
• An organization’s size plays a smaller role than industry in the application of mature quality practices.
• There is no significant indication that the use of quality practices differs by region.

Quality: Strategic Asset, Competitive Differentiator

The first theme in the ASQ Global State of Quality report for 2016 addresses the shift toward centralized governance and the increased frequency of quality metric reporting.

How to govern and manage quality efforts to maximize the impact on core organizational outcomes is a common challenge for organizations.

Quality is considered to be a strategic asset by 36 percent of responding organizations—an increase of 14 percent from 2013.

The study also revealed that organizations are becoming more proactive at using quality to drive organizational success—from how quality is used to drive profitability to how the concept is governed.

The report addresses the continued trend of viewing quality as a strategic asset and competitive differentiator.

Once a solid foundation for quality assurance has been established, an organization can build off this through implementing more mature quality practices to leverage quality for the benefit of the customer. In this light, quality can be expanded beyond its traditional role to create customer value and enhance brand image—both key competitive differentiators.

This is particularly common in world-class organizations that have quality so deeply ingrained in their culture that it’s impossible separate their organization from quality. (The report separates organizations by world-class or non-world-class status. World-class organizations represent those with the strongest end-to-end quality practices.)

The report also addressed the increase in organizations that leverage quality to mitigate risks and solve problems. This shift has led to increased visibility of the quality function, with the executive leadership of many organizations required to increase the frequency that quality measurements are reviewed.

The maturity of quality systems is also considered. A mature quality system focuses on proactively creating value, rather than simply being relegated to compliance activities. Through taking this proactive approach, the quality function is seen as a strategic partner throughout the organization. Benefits of fostering a mature quality culture include driving profitability through brand enhancement, effective data use, and providing an exceptional customer experience. It is no surprise that world-class organizations excel on these points and in areas including innovation, data use, and sustainability practices.

Considering maturity, competitive differentiation, and continuous improvement can raise the question, how can organizations use quality to drive profitability? Quality measures can be used to establish strategic goals that drive performance, measure business processes, support trending or predictive analysis that emphasizes pre-emptive decision making, and to incentivize employee performance. Again, world-class organizations excel in this area. For non-world-class organizations, this gap presents an opportunity to catch up.

The way that organizations structure their quality governance and management to maximize impact can heavily influence its quality culture.

Although the report found an overall shift toward centralized quality governance, manufacturing organizations tend to use a quality department to govern, whereas service organizations are more likely to have senior executives govern quality. These observations are consistent with the 2013 data. Overall, 75 percent of organizations have centralized quality governance, with a shift toward a centralized department since 2013. Larger organizations have seen an increase of 35 percent toward a centralized approach. The report raises an interesting point on this topic: “does one model better suit a particular industry sector, or will the trend continue over time toward a centralized approach?”

Visit The Auditor Online in the coming weeks for more interesting findings from the ASQ Global Stage of Quality 2 Research—Discoveries 2016 report.