Managing risks and controlling costs, it’s a question of culture.

Risk, according to one dictionary definition, is

“The possibility of suffering harm or loss”.

Failing to manage risk hits the bottom line; contrary to widely held opinion there is no conflict between managing safety and quality and maintaining profitability. Relying on regulation, supervision and box ticking is extremely expensive and is not wholly effective; it is the decisions that people take “at the coal face” that affect results, and corporate culture and management behaviours influence those decisions. As Aristotle succinctly observed in 300BC,

“We are what we repeatedly do. Excellence, then, is not an act, but a habit”

Challenging the approach

Quality, Safety, finance, HR; different disciplines will each have their own perspectives on risk. What each aspect of risk has in common is that non-conformance impacts the bottom line. Working for 20 years in the rail industry made me aware of how a disjointed approach to managing different aspects of risk causes confusion, frustration and waste; managing compliance becomes a cost driver.

Over-regulation is expensive and ineffective; excessive documentation and disjointed approaches cause confusion at the “sharp end”. Collaborative working presents additional challenges; where several contracting organisations work together on large projects the problems escalate, different cultures and systems must be aligned. Clear, easily understood and simple to manage processes and systems are therefore essential.

I worked for 15 years for an American organisation. Observing the different approaches to managing safety in the UK and in the USA was enlightening; it was a simple matter of economics. In the USA we had contracting teams; each team had output targets to meet but they all understood that they could not meet those targets if they had accidents or quality defects to deal with. Furthermore, in the USA there is no National Health Service; employers buy health insurance for their employees and insurance premiums are affected by preceding years’ claims. In other words, the link between safety and the bottom line was immediately visible and measurable.

Keeping it simple

A significant factor in safety performance in the USA was the way in which work teams were organised. Everyone in each team worked together all of the time; everyone knew their role and what was expected. They developed work practices together and they addressed and eliminated problems and looked out for each other as a team. That familiarity was a key factor in ensuring productivity and safety.

TQM and the EFQM Business Excellence model principles develop similar understandings of each team members’ needs; they are the fundamentals of Qualitin’s methodology and it is the reason I joined them as an enthusiastic partner. Qualitin is a global enterprise that specialises in strategy execution.

What differentiates it from other ‘solution providers’ is its simple, practical approach to embedding TQM principles into organisational cultures. It engages managers at all levels and enables them to execute strategy in a clearly demonstrable way. It provides them each month with opportunities to make and be recognised for improving processes that deliver continuously improving results.

Established for 18 years, and with its origins in the steel processing industry, Qualitin has successfully helped organisations ranging from fewer than 10 to more than 17,000 employees in sectors including utilities, food manufacturing, retail, not-for-profit social enterprises and charities.

Serasa Experian in Brazil is a notable example of Qualitin’s added value. Over a four year period Qualitin helped Serasa to grow sales by almost 300% and to improve EBIT by over 400%. Current UK clients include a large further education college, a legal services company and a food manufacturing organisation.

So, how can the rail industry benefit from Qualitin’s experience?

Taking action on causes

Organisations are often very good at dealing with the effects of problems but not necessarily so good at addressing and fixing their causes. Focusing on causes is however absolutely essential in order to prevent reoccurrences. Whilst root cause analysis is well embedded at operational safety level it is not always adopted at senior management level. Qualitin’s approach focuses on identifying and fixing causes at all levels; it addresses the systemic and process issues that affect performance in all areas.

Qualitin’s ICG methodology ensures that strategic objectives are clearly defined and quantified and that all key business metrics are aligned to support them. It typically results in individual managers having fewer, but more useful kpi’s and that enables them to focus on what really delivers improvements. By using kpi’s to enable managers to demonstrate success, rather than as a stick with which to beat them, ICG therefore develops the kind of cultural and behavioural change that is much more effective and sustainable than over regulation.

Focus on processes, not people

So, what makes Qualitin’s ICG methodology so different? Deming said

“A bad process will beat a good person every time”

In many organisations the blame for under performance is focused on individuals. This is demotivating and encourages the concealment of problems. ICG focuses on the capabilities of processes, it is managers’ responsibility to identify and correct root causes; this approach provides managers with opportunities to demonstrate successes.

Waste less time debating history

By focussing on process performance and debating only those results that are abnormal, and by using results to identify improvement opportunities rather than to apportion blame, it is possible to focus more effort on ensuring a better future. Site meetings can be made shorter and more effective and performance can be readily monitored against project and corporate objectives.

It is innovative

Innovation and learning from other sectors is a key objective for the rail industry. Such innovations need not be confined to products and services; worldwide, using Qualitin’s approach, thousands of managers in hundreds of organisations have achieved the kind of step change business improvements that the UK rail industry seeks.

 Tony Withers is Implementation Director at Qualitin Global
               

tony@qualitin.com

www.qualitin.com/icg