As a company grows there are chances that the quality of their product or service can decline as resources are drawn thin. This post will explore methods of maintaining product or service quality while promoting continued growth.
It takes a considerable amount of ambition to start and operate a successful business. Business owners say that owning a business is hard work but can also be exhilarating – gaining new clients, seeing a new product introduced to the market, and expanding into new territories. However, the ambition that motivates business owners to venture into entrepreneurship can also be their Achilles’ heel. The excitement and thrill of growth can tempt business owners to grow too quickly.
But there are many pitfalls to attempting to grow too fast. One pitfall is taking on new clients without the resources to accommodate the new business. Another is pushing a product to market prematurely to “seize an opportunity.” Or taking on debt without a realistic repayment plan. Sometimes business owners hire new staff before they have revenue to pay them, or they may be tempted to open new offices or locations that are too big. All these pitfalls lead to increased expenses before there is revenue to support them. What happens when a growing business lacks resources? Something must give and it’s often quality that suffers.
The chain reaction
It’s a downward spiral. The owner accepts a large order and over promises on delivery. Suppliers are unable to provide critical materials needed for manufacturing. The owner then improvises, accepting materials that are less than standard. They may let a part of the process “slide” to complete the order on time. There is pressure to hire new staff to complete the order and get working before they are properly trained, causing the new employee to make errors. Mistakes may cause rifts among workers. The work force becomes stressed, spread too thin, overworked and burned out, which causes attention to detail to lag and quality suffers. Customers complain, the company receives negative comments on social media, which affects future business, and so on.
However, damage to brand name and image is the least of the effects. Products or services that are not up to par put the company and the business owner at risk of recalls, loss from wasted product that must be destroyed or won’t sell, loss of future profits and even potential legal action. This is just the short list – there are many consequences to putting out a poor quality product.
The good news is it is entirely possible to scale up growth in a way that maintains quality in the product or service. Below are some ways to grow and maintain quality.
Understanding customer expectations
Business owners must understand what their customers’ expectations are in terms of the quality of the product or service and whether or not the product or service is living up. This is the most important data a business owner could obtain. Without knowing what the customer wants and needs, there is a risk of creating a product that is useless and won’t sell. The good news is gathering this data is not difficult.
There are many easy ways to collect data on customer expectations. Simple customer surveys can be created and sent by email and tallied automatically. Or, staff can gather data by asking customers a few quick questions or an email can be sent when an order is completed. Another method to collect data is to set up a dedicated customer suggestion phone line or special email addresses to take feedback.
One data point that is helpful to collect from surveys is the net promoter score. This is a key performance indicator (KPI) that many companies use as a method to determine how well they are doing. The net promoter score is a benchmark that indicates how likely customers are to recommend the business to their friends.
Another method to collect data is through mystery shoppers, which provide an objective view of customer service during the sales process. Mystery shoppers will secretly shop the business unbeknownst to the staff. Then, they provide feedback to the business owner based on criteria that the owner determines ahead of time.
The objective behind collecting customer data is to then apply the findings to changes in the organization to increase quality and customer satisfaction in the product or service. Quality improvement tools can be used to identify ways to implement customer feedback.
Use quality improvement tools
There is an abundance of tools, in fact an entire industry, developed to help businesses measure, manage, and assure quality. These tools can be learned and adapted to all types and all sizes of businesses.
Once the problem is identified, solutions must be found. One way to identify where the breakdown in quality is occurring is by performing a Root Cause Analysis. This process offers the business owner a way to discover calculated solutions and avoid hasty decisions. It is a mindset, an “opportunity mentality” that focusses on how challenges can create opportunities for improvement and treats the root of the problem and not just the effects. KnowledgeCity offers a comprehensive course on “Root Cause Analysis.”
Other total quality management tools such as Six Sigma and Lean Six Sigma are methods that help business leaders improve performance, reduce defects, increase profits, enhance workforce satisfaction and increase the quality of products and services.
Six Sigma is an overall business strategy and improvement process that focuses on improving quality by reducing variations in processes to solve problems: define, measure, analyze, improve, and control (DMAIC). It uses quantitative and qualitative techniques such as statistical process control, control charts, failure mode and effects analysis (FMEA) and process mapping.
On the other hand, Lean Six Sigma relies more on data than processes. It focuses on preventing defects by reducing variation, waste, and cycle time, utilizing work standardization and flow, which creates a competitive advantage for the business.
Test a minimal viable product
An approach to new product development is to introduce a minimum viable product (MVP) which is a product that has the most basic features at rollout to the market. The product is tested with early adapters that provide feedback, allowing the company to make improvements in subsequent releases. This process ensures a higher quality product that meets customer expectations. This method can save money as it uses fewer resources and reduces risk in the early stages of the product release.
These are just a few ways that a business can scale up and maintain quality as it grows. But there is so much more to learn and consider.
Small business owners can learn more through the U.S. Small Business Administration (SBA) – a free resource available to entrepreneurs. The SBA operates Small Business Development Centers (SBDC) in communities across the U.S. to help small businesses start, grow, manage, and find funding for their businesses.
Finally, leading an organization through a quality improvement process can be somewhat overwhelming as the process has many moving parts to it. Business owners should approach the process one step at a time, focusing on the most problematic areas first as identified by customer surveys.
Growing a company while maintaining quality is a balancing act that requires that business leaders have wide array of skills. KnowledgeCity has a vast library of courses, white papers and articles that can help business owners increase their skills in these areas, including the aforementioned course entitled “Root Cause Analysis”. Taking advantage of these resources can help you ensure the success of your business and the quality of your products and services.