At a time when many companies are cutting back on non-essential personnel and activities, one of the programs at risk of being cut may be quality control. In fact, some large real-estate service firms scaled back or eliminated their quality-control initiatives years ago in response to earnings pressure. Firms that remain dedicated to providing top-tier client service, however, continue to view quality control and benchmarking as key components of success in every economic climate.
High-quality service does not come about simply by throwing money around. A quality initiative must be constantly examined, measured and refined using a deliberate, consistent process. Implementing and maintaining this process is expensive, and companies focused on short-term goals may be better off pursuing a low-cost strategy rather than competing on the basis of quality. Over time, however, the cost of a well-run quality-control and benchmarking initiative is more than offset by the benefits: superior property performance, higher tenant retention rates and lower employee turnover, to name a few.
Defining quality control
Quality control is the process by which a company measures performance in terms of compliance with standards that have been set, and then relates that to customer satisfaction through a continuous improvement process. Real estate firms and companies in other service industries, as well as manufacturing firms, have integrated this process into daily operations, and have seen significant improvements in tangible and intangible assets as a result.
Benefits include fostering greater communication throughout an organization, generating employee buy-in of policies and procedures and increasing client loyalty. On the downside, the process can be costly due to the large investment of employee resources required, as well as time-consuming. Whether the benefits outweigh the costs depends largely on the company's depth of commitment to quality — at a corporate level, and at a cultural level.
To succeed, a quality-control program must incorporate four main phases: development of standards, employee training, measurement of results and refinement of standards based on those results.
Standards are the foundation for a continuous improvement process. To be effective, standards must be ambitious enough to drive employees to do their best. However, unachievable standards have a de-motivating effect on employees and ultimately do more harm than good. As in many industries, objective standards for real-estate service performance can be obtained from industry associations and private-sector sources. Corporate officers may also have strong opinions on acceptable standards for quality control. Most importantly, quality-control managers must seek feedback from the people closest to the work — the employees who will be judged by the standards set.
Obtaining employee feedback on standards is smart from a practical standpoint — after all, they know what is achievable and what areas can be improved. Beyond practical considerations, it is important that employees feel they are a valuable part of the quality-control process from the outset, so they are in step with management when it comes to meeting and exceeding standards.
Once standards are set, employees must be trained on policies and procedures in order to meet the standards. When done correctly, training is expensive and time-consuming; however, it pays large dividends in terms of employee expertise and productivity.
After standards have been set and training has been conducted, the quality-control manager must gather data to judge the effectiveness of the program through some measurable means. The quality-control manager chooses among a variety of internal and external measurement tools:
customer and employee surveys;
industry-wide performance data from third-party providers;
quality management reviews, involving extensive personnel interviews and investigations by third-party firms;
internal performance management reviews; and
corporate checks of internal customer satisfaction.
Quality control is not a finite-life project, but an ongoing initiative that uses past progress to set new standards and procedures. As with the initial standards phase, revision of standards must be done with employee input in order to achieve the desired results and to coax great ideas out of employees.
The quality control process is not magic — it may be several years before a quality initiative shows up in empirical data such as property performance, client satisfaction levels and employee retention. Senior executives can console themselves with this bit of wisdom: most employees want to do a good job if they have a sense of how to achieve that goal and a belief that their hard work will be noticed by management. In providing a clear set of procedures and a means of two-way communication, management virtually guarantees a more stable, happier and more productive workforce that will eventually improve the bottom line.
Jim Dismukes is senior vice president and national director of operations for PM Realty Group.