The Culture of Customer Satisfaction

Recent trends in the business literature show a significant focus on the mechanics of the culture of organizations. Annual training reinforcing the quality and compliance requirements of organizations is a common end-of-year task. To provide some context for the training, it is important to look at the synergy between the cultures of compliance and quality, and how that synergy supports customer satisfaction.

Customers are the lifeblood of any organization, and without them innovation does not progress because there is no revenue, profits or market value.[1] This is the primary rationale for the linkage between quality and customer satisfaction in all of the ISO quality management systems. Quality is in the eye of the beholder, where customer expectations, use experience, and longevity all are critical factors in determining the level of satisfaction customers have. For organizations to be successful in promoting these factors, they must encourage these factors by incorporating them into the fabric of their quality culture.

The general focus on the culture of an organization began in technology companies as a way to create an innovative work environment to foster creatively and new product development. Executives began to realize the value of having corporate beliefs was a way to promote a corporate vision and create a better work environment in order to promote employee engagement, retention, productivity and teamwork. These characteristics are also essential in a culture of quality as well.

Quality management systems also had a role in fostering the focus on culture. The push to standardize regulations and medical device requirements in the mid-1990s created the first regulatory requirements for corporate policies directed at quality culture. The goal of those policies from a regulatory viewpoint was to increase accountability for quality to an organizational level, and from a standard requirement (ISO 9001, ISO 13485) use that corporate focus to create a quality focused work environment for the purposes of promoting and enhancing customer satisfaction to develop brand loyalty and a more reliable supplier base.

The FDA regulation incorporating the requirement for medical device manufacturers to express and promote a quality policy was effective in October, 1996. This change in regulatory philosophy was concurrent with a bestselling book entitled It Takes a Village. The title, based on the African proverb “It takes a village to raise a child” had “[T]he simple message …is as relevant as ever: We are all in this together.” This is also consistent with the FDA preamble enacting the final rule for Good Manufacturing Practice requiring executive management set a quality policy. The approach was that all team members are responsible for quality. The FDA said: “[T]he quality policy is to be supported by all personnel and established by top management…it is the responsibility of the highest level of management to establish a quality policy and ensure that it is followed.”

General corporate compliance followed a short six years later with the enactment of the Sarbanes Oxley Act. This Act addressed corporate records for accounting and investor protection as a result of the Enron and WorldCom scandals which defrauded the investor markets of several billion dollars. This law created the compliance requirements and reporting requirements around which the need for a similar approach to the quality regulation in 1996 required executive management to create a compliance culture similar to the quality culture, by reiterating it was management’s responsibility to maintain a sound internal control structure for financial reporting and assess its own effectiveness. It is the auditor’s responsibility to attest to the soundness of management’s assessment and report on the state of the overall financial control system. The financial markets would rely on those reports.

Like the developing quality requirements, the controls were ‘preventative’ and intended to eliminate lapses, either intentional or inadvertent (SOPs, work instructions and standardized operations); or ‘detective’ intended to identify errors and irregularities that have already occurred (inspection, oversight, internal audit). In both systems, the check was to test the controls with the external auditor for the independent check. The compliance audit focuses on external accounting audits and in the same manner quality/ISO auditors focus on the quality records to demonstrate controls customers can rely on. The compliance culture focused on internal activities, whereas the quality culture focused outward activities (product) with the metric of customer satisfaction.

For innovative medical device companies, particularly those which are public or are startups raising capital, balancing both of these cultural requirements can be difficult. Corporations in particular have been more concerned about the compliance aspects because of the legal implications and direct financial effects. In an effort to achieve efficiency, corporations have often equated compliance with quality. This equation does not enhance customer satisfaction which is the goal of quality.  Compliance is a minimum requirement. Quality far exceeds compliance, particularly when it is focuses on its link to customer satisfaction, a key tool in capturing new business and strengthening the bonds we have with existing customers.  New business opportunities start with the customer having expectations that the product or service will meet their requirements. This expectation is confirmed with demonstrations and use experience. The combination of customer expectations and use experiences build loyalty, completing the three critical factors of customer satisfaction. Compliance may be an expectation, but it cannot build use experience or longevity. Only quality can add that value.

The best image of how the compliance and quality cultures interact is a tree. The compliance culture is the soil the tree is planted in. Companies cannot prepare to proposer without a compliance with applicable regulations (both financial and quality) at its base. The structure and requirement for a quality system are part compliance requirements for medical and healthcare companies and function as the seed. It is the structures we build for the development of innovative products that nurtures the seed and becomes the tree. The tree grows because resources and staff efforts are devoted to create an innovative team environment for the tree to prosper. Customers are drawn to the fruit of the tree and choose fruit that they perceive meet their expectations. Through use of the product, customers gain experience with the product and the services associated with the product. On that basis, customers constantly evaluate whether to continue using the product, building the last critical element of satisfaction – longevity. Therefore, the outcome of quality culture is the output of the tree – fruit; an outcome that can be affected by compliance, but is well beyond the output of compliance alone. Therefore, it is appropriate to say that all compliance is part of quality, but the quality culture must rise above compliance to meet customer expectations. Quality is following requirements even when no one is watching, just because it is the expectation of the customer.

In conclusion, the culture of compliance is a subset of the culture of quality. Both cultures are rooted in the belief that we are ‘all in this together’ and that open and honest communication is vital – particularly between the company and its customers. Quality continues by building on its processes and using the information from customers to improve those processes to make them more responsive. Finally, in both compliance and quality, success and/or failure are assessments made by looking backward. Forward-looking companies use the assessments for experience and as a learning tool to improve processes, develop people, and correct mistakes, making the quality culture stronger. This feeds back as the reward for service improvements and enhances the user experience, but working on a core value of customer satisfaction. This links the company to its customers. By enhancing longevity, the company making the products is rewarded with a stable/growing customer base, and the customer is rewarded with a stable and reliable supplier base.

[1] Grönroos, C. 2005. Service Management and Marketing. A customer relationship management approach. Swedish School of Economics and Business Administration

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