A process map is a useful tool that helps you visualize all the steps in…
You have heard that question asked time and time again with quality issues. For a CFO, if you cannot quantify the financial benefit, then you cannot justify the initiative. Quality is a great thing, but in the real world, cash is king! Quality professionals just cringe at this train of thought. Can you provide a clarity with initiatives that eases the financial mindset?
Quality and the Cash Conundrum
This is the eternal dance of business. Implementing initiatives that drive business while producing results that are financially successful. A recent study looked at quality and continuous improvement initiatives on a global scale and their financial relationships to the organizations. The study revealed that 40% of organizations have connected efforts to financial performance. They were able to quantify and qualify their continuous improvements with improved financial performance. It is energizing that these organizations connected quality and financial performance in all of their initiatives. However, the disturbing news was the other 60% of those studied failed to make the connection between quality and financial performance. These organizations either didn’t know the financial implications or they didn’t measure them.
Putting Quality into Perspective
As professionals, this study must be a wake up call to the industry. Our practice and tools keep us professing the proven value of initiatives. Obviously, our message is being heard, with the caveat that if you achieve quality, you will reap financial rewards. This mantra is consistent to keep the reputation of our practice, but it cannot be sustained when looking at the financial health of the organizations we serve. When analyzing and promoting quality initiatives, it is crucial that we also understand financial implications and impact. Those factors cannot be ignored. For the cornerstone of all successful business operations is understanding the fact that cash is king.