Policies and Procedures - Need of an hour

I was just reading an interesting article on "Why policies and procedures". Though many of us have breathe in and out with these terms, (Thanks to so many standards & framework floating around :)) this article puts it in very simple form so I thought of sharing it across and also it was long time I penned down :)

We have heard these impressive questions & quotes viz "Why do we need policies and procedures " or "Policies and procedures help your organization" etc. so many times. Probably you may also be the one instead asking these questions. So how happy were you with the answer you gave or the one you received. May be not very. Though it might seems such an obvious question but still we have to struggle to give it clear and meaningful response. Isn't it ?

Well, nothing to hide it off but at this point we need to understand this term clearly and understand it before starting the system of policies and procedures.

If you start listing it down the reasons "Why policies and procedures are necessary", I am sure to come up with page-long lists . But of course such long lists lose meaning and value because they are too long to really remember and absorb. And plus such long list I am sure will have overlap and repetition.

So here are some four very basic reasons that demonstrate why we should develop procedures to document important process:

• Compliance
• Operational Needs
• Manage Risks
• Continuous Improvement

1. Improve Compliance

Policies & Procedures Can Improve Compliance. Every organization has to comply with some laws and regulations . Even the smallest of organizations must comply with tax laws and with state and local regulations , while some bigger organization have to cope with a myriad of federal and state laws and regulations.

Also organizations today are geared towards implementing the quality standards and need to have compliance with standards like ISO 9001, CMMI, ISO 27000 , ISO 22000, etc.

While procedures themselves may not demonstrate compliance, well-defined and documented processes (i.e. procedures, training materials) along with records that demonstrate process capability can make evident an effective internal control system and compliance to regulations and standards.

Let’s face it; if your organization is having trouble in performing the rudimentary function of obeying laws and regulations, then it is likely struggling even more at being effective and successful in fulfilling its core missions. If compliance is an issue in your organization, then creating well-defined processes documented by procedures in order to meet your legal and regulatory requirements should be a high priority.


2. Operational Needs are Met through Policies and Procedures

What is really important in your business? What is fundamental for its success? Are practices associated with them being steered by top management? How much visibility and transparency is there into the effectiveness of these key processes?
This brings us to the next important role of procedures; to ensure processes fundamental to the organization’s success are properly guided by management, are performed in a consistent way that meets the organizations needs, and that important related information and data are captured and communicated.

For example, if regularly introducing new and improved products is essential to the success of your business, shouldn't you be in control of your sales and marketing cycle that captures customer requirements and desires so they can be translated into your product design?

Shouldn’t there be well-documented design review and product launch processes? Policies and procedures are a way to document such key activities so they are executed consistently and implement the best practices for the organization.


3. Risks can be Managed with Well-Written Procedures

Risk - It's in every business , every organization. If you are saying you don't have any risks, then This is the biggest risk you are enveloping of not identifying the risks properly.

Every business must recognize and manage risk. Risk management is a process to ensure all events can be managed according to an organizations risk appetite.

Established policies and procedures act as a control activity needed to manage risk.

So whether it is a fire or a corrupt/incompetent accountant, procedures define how reasonable measures are built into processes to prevent such events, and they describe how the organization will manage and recover from such events should they occur.

Another reason for procedures that fits well into this category is the documentation of organizational knowledge . Key personnel leaving, perhaps even joining a competitor is always a risk. That risk is diminished to a degree if key organizational knowledge is documented in a procedure, as opposed to important information being stored in a person’s head, in their computer, on simply jotted down in their notebook or journal.

4 . Procedures Can Drive Improvement

Continuous Improvement is one of the most important, yet frequently overlooked reasons for developing an internal control system of policies and procedures.

One role procedures play in continuous improvement is implementing a Plan-Do-Check-Act (PDCA) approach to processes.

Clear policies (that should be developed or approved by management) describe operational goals and direction, implemented by the Plan, which includes SMART objectives and that describe best organizational practices.
The Do section carries out the plan and captures the data related to the stated objectives.
The check phase reviews the data in relation to goals and objectives, and
Act means reflective changes in the process or the procedure that improves the process effectiveness, or altering objectives to be more realistic or meaningful.

Lack of clear communication is a common impediment to improvement and success. Procedures can also build important internal communication practices into processes.
For example, the collection process can include notifying the Sales Department which customers aren’t paying their bills, so the Sales staff isn’t spending time making sales calls to customers who do not pay for what they buy is one of the most important, yet frequently overlooked reasons for developing an internal control system of policies and procedures.

One role procedures play in continuous improvement is implementing a Plan-Do-Check-Act (PDCA) approach to processes.

So go ahead and embrace the power of Policies and procedures in your organization.

Final note - "The existence of procedures themselves does not demonstrate internal control; procedures that clearly document processes and that are used, followed, and maintained do."

Black Hole of Communication

Have you ever wondered , that why people remember some event , occasion, or for that matter fight , arguments etc more than the simple words someone has communicated. It's simply because People remember experiences & feelings more accurately than they recall words.

Long after people forget what you said , they remember how you made them feel.

As you know we have two minds - one is our conscious mind (left brain) & other is sub/un-conscious mind (right brain) . Both react differently when we communicate.

The conscious mind wants structure and order whereas the unconscious mind remembers the feelings & subjective experiences. Therefore, if you want your message to be understood talk to the conscious mind but if you want it to be remembered communicate to un-conscious mind.

Thus, its essential to communicate and leave people with positive experiences , because when everything else fades , they still remember how you made them feel.

Ask people how they felt at the end of the conversation . You may simply ask , " hoe do you feel about our discussion"? have I left you feeling positive or have I missed something?". This gives people an opportunity to reflect on how they are feeling.

The mission here is to communicate to the two minds, so that you get your point across by communicating to conscious mind & have people experience positive feeling by tapping the connection with un conscious minds.

Most of the times you would have end up assigning tasks to your team/sub ordinates saying it as urgent, high priority. Something like this statement - " This is important but don't forget this..." or " This needs to be done by Friday along with everything else"..OK so what's wrong here..I have so many important tasks that are urgent.

But the point here is, you fail to meet your objectives because "When everything is urgent , Nothing is urgent ".
Our mind treats all information as equal unless important points are highlighted or marked out. But when leaders/managers fall into trap of "wanting everything yesterday" , you are sending the message that every things is a priority . and people are then left confused , uncertain as to which direction to take.

Therefore, always communicate your priorities and provide "By when" date for delivery. Because if you don't communicate your priorities , others will establish them but this still requires a mutual understand of what is urgent and what is really urgent.

Know Precisely what you want and state it clearly...

JUST BECAUSE YOU "SAID IT" DOES NOT MEAN...
Anyone heard you.
Anyone heard you correctly.
Anyone cares.

JUST BECAUSE YOU SAID IT " REPEATEDLY", DOES NOT MEAN...
Anyone is moving.
Anyone is moving fast.
Anyone is moving in the right direction.

How you communicates makes all the difference..so go ahead and make that difference !!

Some Communication Tips for Leaders

Communication, is the most important vehicle for unleashing the power of people. This is the tool which can either motivate the people or derail them completely.

But almost all the times , we use communication just as means of passing information instead of using it as a powerful mean to get connected with people.

Each one of us want to make an effective communication , so that "what is heard " by people is "what we said" . But usually it happens in opposite manner , what is heard by people is not what we said but something else & here crops up the problem of not getting the results we wanted .

And usually we account this problem to the people who are listening, but in reality the problem lies with us in communicating.

Recently I came across one very good book ("Say It Right The First Time" ) which unleashes communication skills in a very simple manner.
So, I thought of just pinning down some of the key take aways. I will be put these in form of daily series.

Words are Potent. All words have meaning & impact. They can either move the action forward or backward ; there is no such thing as Neutral comment.

And the truth is your competence, expertise & commitment will not overcome Poor Communication skills.

Therefore , as a Leader you need need to harness the power of your words & accept the accountability for how they impact others. In simple terms be an owner in everything you do or speak.
When you act as an owner the focus is on fixing the problems rather than fixing the blame.

So, key point is to first "Become Accountable" which is being 100% responsible for how your words impact others .

Hey hey wait..are you thinking that if you accept the blame you are becoming accountable. When people say," I am accountable", they often think it means , " I am to blame".
But this is not true. 100% Accountability is :

• Choosing to be an OWNER in everything you do
• Accepting responsibility (Not Blame ) for your impact on results & people
• Focusing on what you do instead of waiting for the others to act

Here are 7 Keys to speaking Accountabily

1. Talk Straight responsibly - Be Direct, Honest & straightforward

2. Inspire Positive action

3. Collaborate with others

4. Build ownership

5. Commit with integrity

6. Hold people accountable

7. Recover Quickly - Remember perfection is not the quest; Recovering quickly is the goal.

Will continue more on Communication in my next post.

Cost of Software Quality - New mantra to quantify ROI

My breather has been unusually quite long i believe ..so after a long breath I am back to action :) .

Recently, I came across one of the important concept in Software Quality which unfortunately has seen little use to date. It is "Cost of Software Quality (CoSQ) or Cost of Quality (CoQ) ".
CoQ has its footsteps from manufacturing and is now finding its way to software , which is one of the most economically challenging & important field of the current era.
Even though many successful products & systems exist in the world today, lack of attention to quality has also led to many unsuccessful software products & software projects that are late , over budget or canceled. Sounds familiar !! Yes it is ..

Software Quality Matters !!

So, does quality also costs ? Yes definitely...but Is it the " poor quality " or "good quality" that costs more ?
This is where fits CoSQ an important metric to calculate "How much the Quality costs".
I recalled here a very famous dictum : " You can't improve if you can't Measure " . Same goes with the Quality also , which is often a less thought of area/function in software.
If you can't measure Software quality how can you improve ?

CoSQ Model - What's this funda all about !!

CoSQ is a framework that is used to find out how much good and poor quality costs .
But before we dive into the mechanics of how to calculate this and use it , lets first ponder why & where CoSQ can be used within software.

Why CoSQ ?
In the projects there are many common areas of concern or problems that usually go unaccounted as there is no direct measure against each of them. These include :
1. Excessive turnover
2. Poor team work
3. Lack of Planning
4. Lack of competitive knowledge
5. Poor Problem Handling
6. Lack of good practices & standards
7. Ineffective project performance & many more..

And these all cost to our project . How ? By producing lower quality product, which demands lot of effort in rework, defect fixing , etc.
But these types of costs are usually invisible to the management. CoSQ metric comes as a rescue here. It provides measure of these invisible costs & makes the economics of software quality visible to your organization. Thus, it allows "quality" to participate in decisions equally with cost & schedule concerns.

Where CoSQ can be used ?

1. Provide measure to compare the success/failure of various projects and/or organisations.
2. Measure the impact or ROI of the organizational software quality improvement programs.
3. Previously hidden costs related to poor quality becomes visible.
4. The economic tradeoffs involved with software quality becomes visible , thus leading to better decision making.
5. Provide cost data to demonstrate the relationship of employee efforts to the bottom line.

Applying CoSQ to Software ..

CoSQ is broken down into three different type of costs :
a) Appraisal Costs - Those which are incurred in the appraisal & achievement of acceptable quality . These include , testing, reviews, inspections , product audits, etc.

b) Prevention Costs - Those which are incurred in order to prevent poor quality from occurring. Eg. Training, Process Improvements, Metrics collection & analysis, TQM, adopting quality standards.

c) Failure Costs - Those which are incurred due to lack of quality . Includes rework , re-reviews, re-testing, remedial upgraded & fixes, warranty etc.

Failure cost can be external if quality problem is detected after shipment or Internal Failure costs if detected prior to shipment.

In nutshell ..
Cquality = Cconformance +Cnon conformance

Conformance costs include Appraisal & Prevention Costs. Non Conformance costs include Failure costs (Internal & External)

Cost of Poor Quality = (Total Rework due to Defects / Total Actual Effort) * 100

Cost of conformance (achieving quality) & costs of non conformance (poor quality) have an inverse relationship.
So as the investment in achieving quality increases , the cost of poor quality decreases.

Now hold on..here lies the key to CoSQ principle.

The Cost of Quality is a significant cost on any project . So , ask yourself a question . How high is your Cost of Quality? I know immediate answer you would have will be Yes, it includes reviews, audits , QA infrastructure, and preparing tests—those are your “Appraisal Costs”. But how high are your “Failure Costs”—the cost of defects and rework?

Failure Costs, which are the more significant Cost of Quality & are the ones that happen to us. We incur these “Costs of Poor Quality” every time a defect comes to light, both during testing and after release. Failure costs take many forms:

• The effort that our developers spend investigating and diagnosing defects, and then reworking designs and code to correct them.
• Slips in our schedules, as testing uncovers defects that require rework and re-testing.
• Our customer support costs, most of which are for helping customers to deal with all of the defects we shipped to them, while developers spend even more time in investigation and rework.

But, the biggest Failure costs are nearly impossible to quantify; loss of customer good will, tarnished reputation in the market, and loss of product momentum.

Since some components of the Cost of Quality are under our direct control and some others are not. So you can gain control over them indirectly, by investing in Appraisal Costs that minimize Failure Costs, reducing your total Cost of Quality and making it more predictable.

Therefore, leveraging Appraisal/Prevention costs to Reduce Failure Costs.

Some data facts ..

As reported consistently in software industry, Failure Costs rise exponentially as the project progresses and we all know that defects are most expensive to fix late in project lifecycle.
And on top of it reducing Appraisal costs will increase our total Cost of Quality, because it is likely to result in an even larger increase in Failure costs.

The CoSQ is reported as percent of development costs in software . But it can also be reported as percent of sales/profits. CoSQ in software organization can range from 40-55% of the development costs with conformance to nonconformances costs ratio from 1.5 -2.0. But it has been observed that implementing process Improvement such as CMMI has helped to bring down the CoSQ from 70% to approximately 40 % of the total project cost.

Therefore, a well-designed & implemented COQ (Cost of Quality) software will facilitate your organization to rapidly improve at maximum rate.

CoSQ represents the "non-usual" process which is usually hidden by conventional tracking mechanisms.

Introduce CoSQ into your organization and it will help to understand value of software quality & at the same time eliminate the wide-spread & devastating effects of poor software quality.

To sum up in short, Software Quality Matters and thus measuring the CoSQ !!

Breather :)

It's time to take a breather today. I think I wrote enough on Six Sigma today..

Will scribble some more "general" quality concepts in my upcoming blogs.

Road Ways to Six Sigma

Customer knowledge and effective measures fuel Six Sigma Engine with three basic motor parts . All of these focus on "Processes" in your organization :

1) Process Improvement (DMAIC)
2) Process Design/Redesign (DMADV)
3) Process Management

Let's touch upon these briefly.

Process Improvement :

It Refers to strategy (DMAIC) for finding the solutions to the pre-existing problems in order to eliminate the root causes of problems.

DMAIC is a five step process to attack problems:

Define the problem and what exactly the customer requires.
This is the step where you need to set goal & the Goals needless to say definitely have to be SMART ( Specific , Measurable , Adequate , Reliable, Time Bound)
The team identifies CTQs (critical to quality characteristics) that have the most impact on quality - separating the “vital few” from the “trivial many”-and creates a map of the process to be improved.

Measure the process to determine the current performance, what are the defects in the current process and collect relevant data for future comparison.
Simply Put => Ask, HOW ARE WE DOING?

Analyze the data collected and determine the root causes of the defects/problems.
WHAT IS WRONG?

Improve or optimize the process to remove the causes of defects .
WHAT NEEDS TO BE DONE?
& Finally

Control the process to make sure that defects don't recur and maintain the process performance in future.
HOW DO WE GUARANTEE PERFORMANCE?

DMAIC is primarily used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately. It's like you know how to make chapati but still you end up with an Indian Map :))

Process Design/Re-Design :

Although DMAIC fits a wide range of business situations , but there are times when a different path through DMAIC is needed such as :

a) When business chooses to replace rather than repair one or more core processes.
b) When you discover that improving the existing process will never deliver the quality customers are demanding.
c) When the business identifies an opportunity to offer an entirely new product or service.

And here comes DMADV as a savior to these types of scenarios.

Define customer requirements and goals for the process/product/service

Measure and determine customer needs and specifications.
Basically identify CTQs

Analyze the process options to meet the customer needs. Here you need to develop and design alternatives, create high-level design and evaluate design capability to select the best design.

Design (detailed) & Implement the new process/product/service to meet the customer needs

Verify the results , maintain performance and ability to meet customer needs

Follow whichever approach fits your organization need and have a smooth ride to six sigma

Key Ingredients for Six Sigma Recipe

The Six Sigma way (An Implementation Guide by Pande) introduced six critical ingredients which one need to blend within the organization to get good six sigma recipe :)

1. Genuine Focus on the customer
2. Data and specially fact driven management
3. Process focus , management & improvement
4. Proactive Management
5. Boundaryless collaboration
6. Most Importantly -- Drive for Perfection and Tolerate Failure
Crust of Six Sigma :

As a whole Six Sigma crust is composed of few key molecules:

* Critical to Quality (CTQ): Attributes most important to the customer (you will lot about CTQ in six sigma )
* Defect: Failing to deliver what the customer wants
* Process Capability: What your process can deliver
* Variation: What the customer sees and feels
* Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels
* Design for Six Sigma: Designing to meet customer needs and process capability

With this basic uphold I think it's time to step in some fundas of six sigma....

Uphill to Six Sigma

Six Sigma - A new name for old vision !!
This mean providing near to perfect products and services to the customers. Sounds little wary.Yes it is!! "Near to Perfect" or "Perfect" :
Yes this is what six sigma aims for & this definitely has been the motto or vision of all the buineses so far .

But then why now...there is so much wave about Six Sigma.
Because being sucessful and more importantly staying successful in business is more challenging today than ever before. Thanks to Ambanis, Tata's and Birla's and many more.

Six Sigma provides some of the Power Tools to improve the services & products to levels of accuracy and quality which has been seen so far only in precision manufacturing.

Six sigma put simply is strive for perfection.

Core of Six Sigma :

Six Sigma basically is data-driven approach to achieve quality. It combines some of the best tecqhniques of the past with recent breakthroughs in Management Thinking & Plain Old common sense.

Six Sigma = Goal of reducing defects to near zero.

Six Sigma stands for Six Standard Deviations from mean. Sigma is the Greek letter used to represent standard deviation in statistics.It tells you how much variability is there within group of items. More the variation - Bigger the standard deviation.

Yes, you guessed right so purpose of six sigma is to reduce the variation and achieve very small standard deviations so that the customer requirements are met.

And when we say customer requirments are met, this means there are no or nearly zero defects.

Hence, Six Sigma is a disciplined, data-driven approach for eliminating defects in any process -- from manufacturing to transactional and from product to service.

Six Sigma Lineage :

It was started first time in Motorola. Bill Smith at Motorola in 1986 pioneered this process .
It was originally defined as a metric for measuring defects and improving quality, and a methodology to reduce defect levels below 3.4 Defects Per (one) Million Opportunities (DPMO).

Six Sigma is a registered service mark and trademark of Motorola, Inc. Motorola has reported over US$17 billion in savings from Six Sigma as of 2006.

In addition to Motorola, companies which also adopted Six Sigma methodologies early-on and continue to practice it today include Bank of America, Caterpillar, Honeywell International (previously known as Allied Signal), Raytheon and General Electric (introduced by Jack Welch.

Six Sigma on it's uphill journey has eventually evolved & is now applied to other non-manufacturing processes.

And here we go...Today we can apply Six Sigma to many fields such as Services, Medical and Insurance Procedures, Call Centers etc....

After all who doesn't want more business :)

My First Post

Today is that one fine day where I just landed into the blogging arena. I just thought it would be good container to pour in the knowledge and also enhance my ability to present about whatever I read ,learn, experience in my own simple understanding.

Let me start with explaining little bit about my blog title .

Quality Everywhere ... Yes practically Quality is Everywhere.

We all perceive Quality in our daily lives . Quality is something definitely we always look for , Isn't it ?? Being in any context. We want good quality food, quality clothes to wear , quality music, quality house , good quality roads to make our life little simpler , good Car, TV, mobile and on the top of all we all yearn for Good Quality Lives .

So, Quality as dictionary meaning goes is " Degree of excellence" or "Fitness for use " . In simple terms it's a perception of the degree in meeting our requirements. It's like -Quality is something to be desired.

Let me cite here few Quality Definitions as interpreted by some of the Quality Gurus' :

a) "Degree to which a set of inherent characteristic fulfils requirements" as ISO 9000
b) "Conformance to requirements" (Philip B. Crosby in the 1980s).
c) "Fitness for use" (Joseph M. Juran). Fitness is defined by the customer.

So, Quality find its way everywhere !!