PQM for Operational Efficiency
PQM and Operational Performance
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Predictive Quality Management (PQM) is a strategic framework, providing a structured approach to develop (or re-develop), implement, and manage the ‘quality’ of those business processes that support and enable the capability to fulfill the mission of the Enterprise. However, PQM itself is not the game… PQM is the ‘ante’ to enter the and play well in the game of business.
In the world of business, performance is the name of the game… Performance for results that matters to the business: Process + People = Performance for Results that matter.
Results that Matter to the Organization
What are the results that matter? Profit. After all, you are running a business not a charity. Every Enterprise, like it or not, is judged by its stakeholders for the EBIDTA and Net Income that is produced by the organization. EBIDTA is an economic and/or financial term, an acronym, that stands for "earnings before interest, tax, depreciation, and amortization". EBITDA is a measure of the earnings potential of a business.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) removes some of the costs of doing business to reveal the profitability of its core operations.
A company's earnings are its after-tax net income. This is the company's bottom line or its profits. The calculation of Operating Income, however, adds some of those costs back in to reveal the company's actual net profit. Operating income shows how much money a business is making after its costs of doing business is deducted. Therefore, the operational focus must be on creating the results that matter to the business, at the lowest feasible operational cost. This will allow the business to be sustainably profitable and scalable with sufficient operating income to work with. What can operational leadership do to manage operational cost? Focus on reducing operational inefficiencies to manage and control operational expense.
Gross Profit = Sales Revenue – Operational Expense (cost of operations)
Achieving success in the ‘game’ of business stems from a workforce that efficiently executes the work of the Enterprise by transforming their time ($$$) into effectively obtaining the results that matter. Operational Efficiency can be predictably achieved with the Predictive Quality Management (PQM) solution that enables management control over operational ‘quality’.
Operational Strategy and Moving Forward Decisively
Behavior is the manifestation of motive and agenda. The behaviors that best create credibility and inspires trust in the workforce is when leaders work as a team and act decisively. Enterprise leaders must act decisively and as a team if they expect the people who work for them to embrace and adopt fundamental shifts in the way the company operates. One thing is crystal clear: standing still is not an option if a change is required. The PQM framework provides an operational strategy that enables leadership to move forward responsibly and decisively.
The PQM Framework (Overview)
“A system must have an aim. A system must create something of value, in other words results.” – W. Edwards Deming
The ‘quality’ of that ecosystem of business processes, supporting and enabling the capability to fulfill the mission of the Enterprise, must be properly built, executed, managed, and improved for sustainable results and scalability, one business process at a time as in the PQM model for PQM:
The Predictive Quality Management (PQM) solution addresses the requisite activities within an organization to ensure that business processes, products and services are consistently developed, implemented, managed, and improved to achieve and sustain a desired level of ‘quality’ within the organization. This PQM framework enables ‘quality’ management.
Responsible leadership ensures that the work of the Enterprise is well planned and that the people who do that work are skilled, trained, and competent to execute that work, as planned.
Accountable leadership ensures that the results of the work done on behalf of the Enterprise is measured, monitored, reported, and reviewed to facilitate the necessary ‘management control’ over the results that matter to the stakeholders of the Enterprise.
