What is your Quality Function actually measuring?
Quality checking (QC, QA etc) has often been relied upon – or viewed as – a measure of overall quality and/or fairness of outcomes. Green scores / above 95% can often provide a misleading message to senior leadership that the business is functioning at low risk.
Let's dig further into this confused connotation and misleading identity around Quality.
It is often assumed that Quality checking provides a thorough assessment of overall quality (and adherence to regulatory requirements) which creates an ongoing dependency on these results, when in reality it is only providing a view on whether colleagues are following internal policy and procedures.
I think we can all remember those countless meetings “well, the quality scores look good so let's move on”......
What if someone was to ask “So the quality scores look good. But what are they actually measuring? What are they telling us?” and more specifically "What are they not measuring?"
Often as operational headcount increases, Quality functions are scaled up at significant cost, with no clear benefit or added ability to identify risk in the wider sense. We've all seen this happen time and time again, purely on the basis that it is perceived as being a genuine lens on operational quality.
Why does this keep happening?
Let's throw out a 'theoretical' case study and see whether any of it sounds familiar:
Operation implements a Quality Function (QC, QA)
Target for ‘quality’ set at 95%. 'Quality' scores defined as Quality Checking outputs and reported to the leadership team
Quality checking has the remit of assessing colleague competency against internal policy
Green reports are regularly achieved which build a level of comfort on overall ‘quality’
Issues impacting regulatory compliance not identified as ‘quality’ scores have been relied upon for a long period of time
Scope of Quality Function not explained at outset (just assumed to be a true measure of quality)
Target of 95% on quality checking can drive intended behaviours of not identifying, reporting and improving colleague competency (then throw in the added behavioural risk of outsourced suppliers providing quality checking on themselves, whilst having a contractual performance SLA of needing to achieve 95% on quality............. I can feel another article on this subject)
Use of word 'quality' gives a perception that the function is providing a view on overall regulatory compliance and results are relied upon too heavily
Function scaled up despite any real value being derived from it (other than noting colleague competency)
This type of Quality function is simply measuring the internal competency of your staff to follow a process. Is that really 'measuring quality'?
Perhaps we all need to stop and ask ourselves about the very real opportunities that exist for risk functions to simplify and improve its approach to measuring true quality. We have often seen businesses ‘scale up’ its ‘quality’ function because it believes it capable of providing something that by design, it cannot (Important note. I am not by any means undermining the importance of a colleague T&C scheme / to understand a colleagues ability to follow a process. I am just pointing out that this scope is extremely limited and is all too often misunderstood).
A simple re-design of your quality framework can actually be far more cost effective and provide you with a much more insightful and agile ability to measure quality.
It is hugely important to:
Debate the challenges and limitations in the current methods of measuring quality
Discuss the scope of the current quality checking function (What is it actually checking? What is it not checking?)
Understand how those scores are perceived (does it align with the scope?)
Explore whether your testing methods and frequency are appropriate given the realities of its scope
Let’s be honest. If you were given a blank piece of paper, how would you design a Quality function in your business? What would it measure?
I doubt it would measure 'Internal Competency to follow a process' and badge this up as 'measuring quality'.
It is tremendously difficult to take time out to think conceptually, when you are also expected to maintain continued reporting of the existing quality function. Churning out those reports is a time sensitive industry.
But pausing to understand ‘what’ your quality function is measuring will help you understand how much of it you should be doing (and what you are currently not doing) Leaving you time and resource to think and plan about what else you need to be doing and how you should be doing it.....(as a start, see the previous article on Outcome Testing!).....
There is obviously a place to understand whether colleagues are following internal processes correctly (particularly when you consider competency and identifying training needs) however at some stage in the lifecycle of the risk community, this type of inline checking has been relied upon and interpreted as, something different altogether....
It’s an empowering process to burst that particular balloon and get those perceptions realigned
'Quality' is defined as "the standard of something as measured against other things of a similar kind; the degree of excellence of something"
Often the Financial Services sector has had an odd relationship with Quality and almost worked up its own definition (tongue-in-cheek humour firmly intended) "the standard of something as measured against itself, the degree to repeat the same thing over and over again".
It's time we all put this way of thinking firmly behind us.
As we all know, the Financial Services sector is driven by principles based regulation (more so now, than ever before) so it’s essential that your Quality Function is fit and able to measure quality in the fullest sense. It is no surprise therefore that the FCA talks often about customer outcomes and the requirement for a business to possess a framework to measure them.
Is it time that your Quality Function was transformed and empowered to truly measure Quality?
Contact samtattersall@sygnia-group.com for more information on how SYGNIA can help significantly transform your quality function to be industry leading.
www.sygnia-group.com