All Ears

Abstract: When presenting proposed quality improvement initiatives to senior management, it is important to speak their language by including important financial metrics that will hold their attention. A quality professional must be able to build a business case that descri…

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A very good article, which is very useful for any non-accounting/finance background people.
--Anil Skariah, 09-04-2009

Money matters most, and investment in Quality results in direct and indirect cost reductions.
--Girish Trehan, 08-05-2009

Highly recommended...A must read for a quality professional.
--Robin Francis, 07-26-2009

Improvements in moral, brand enhancement and operational flow are great qualitative benefits. But proving the case financially opens the channels of support and enables you to prove the reality of the former.
--John Morrison, 07-25-2009

Well written and gives concise explanations to all of the basic terminology used to determine costs. I especially appreciate the examples given to describe the metrics being used.
--Kevin A. McWatt, 07-21-2009

I have to agree with Paul and Shree regarding the lack of participation in quality by management. Why is it that the burden of proof always rests on those wanting to solve problems and not on management who are hesitant to initiate the needed change? Is there a company anywhere in North America where data is required for both sides of a decision? That is, the proponent of an idea would present data for change and the opponent would then present data for remaining the same? My experience is that as long as the suggestion is to NOT spend money, you will always be supported, even though it may be extremely foolish to pass up an opportunity.

Further compounding the problem of supporting proposals to management is the fact that most of my company's cost and price information is kept from general viewing by employees. Without knowing what the most significant costs are and without knowing what our price of goods sold is, it becomes pointless to attempt to use financial arguments.
It is very unfortunate. As it was mentioned, those who know seem to find success in Japan instead of their hometowns.
--Jeffrey Vust, 07-16-2009

Excellent point put forward, followed by a succinct Management Accounting refresher ... Unfortunately, in the world dominated by Jerry Maguire-styled management with a mantra of "show me the money," the Jurans and Demings of the world go to Japan to use Quality Principles.

The sad part of the business culture today is that quality is left to a few engineers/eng. managers in the lab or manufacturing lines, where unfortunately they are mostly creating reports or graphs that don't spell out business issues and cost impacts. My take is that the problem lies on both sides of the table (management and quality professionals). Everyone needs to see quality as an integral part of the business with real costs associated with it (or lack of it ... be it inefficiencies, reworks, customer satisfaction and market share losses due to recalls or regulatory issues). It's high time to change the perception from "quality is engineering's business" to "quality is everyone's business!"
--Shree Balachandran, 07-14-2009

Good article, but Japanese executives would all understand quality terminology without the need for translation. Food for thought!
--Paul Harding, 07-14-2009

This is an excellent article on the basics of an income statement and how to use simple justification methods to help sell the merits of a quality improvement project. Easy for anyone in business to understand.
--Greg Sutton, 07-13-2009

Agree, excellent article. Since most of our jobs are related to the viability of a business, this is highly recommended reading for quality professionals.
--Dana Hawthorne, 07-12-2009

Excellent article. Puts it all together.
--Al Arseo, 07-01-2009