Avoid Missing Your Target with a Quality Audit

The New Year started with a monumental admission from one of America’s biggest retailers. Target’s foray into the Canadian marketplace was a complete and utter failure. A total of 133 stores are to be shut down with losses pegged at over $1-billion. Target had missed its mark.

It wasn’t like there weren’t signs over the previous 24-months that the company’s brash expansion plans were tenuous at best. Within the first weeks of opening, Canadians complained shelves were barren, prices were higher than expectations, and what product there was, was deemed subpar.

Any one of those things should have triggered a project audit. Clearly that didn’t happen.

Anytime is a Good Time

Traditionally audits are done once projects have been completed. However, in recent years more companies have decided there is no reason why a project audit can’t be conducted much sooner. And in the case of projects like Target where red flags waved down every aisle of their stores, sooner would have been better.

According to an article in the Globe and Mail, analysts identified numerous flags, among them:

  • Overestimation of the market size
  • Underestimation of the competition
  • Costly and unwieldy lease agreements
  • Inferior locations
  • Supply chain management issues
  • ERP system that failed them

A project audit midstream would have pinpointed some of these issues and helped to create an action plan to turn things around. Maybe the expansion would still be a failed mission, but there would be a greater chance that profit losses would have been mitigated.

Auditors Aren’t the Bad Guys

The new way to look at auditing is to see it not as externals swooping in searching for people and situations to blame, but to see auditors as those who play a vital role as part of your overall project management. This shift in perspective provides room to do a number of things:

  • Identify potential problems early so they can be corrected
  • Identify positive practices that can be used elsewhere in the organization
  • Obtain a deeper examination of business operations and execution
  • Trade facts for office fallacies and conjecture

Objectivity is the Key Word

There are two ways of doing a project audit. One way is to allow project team members to simply provide you with reports based on previously determined and measureable expectations. But that’s really not doing much more than playing lip services to the process.

It will give you information, but it won’t provide insight, and that’s what you want.

A good project audit teases out what the team itself can’t see. We all have blinders. An external audit, conducted by another project stakeholder or member of executive management – or even a third party, will raise the bar and allow project team members to speak candidly about both successes and failures.

The audit can also reveal and pinpoint issues that get in the way of achieving schedule costs, quality, or customer satisfaction. And surely in Target’s case an audit would have pointed the finger at the ERP system.

According to the Project Management Institute, there are even greater opportunities in scheduling audits, as suggested in a paper by Ginger Levin, called The Changing Nature of the Project Audit – No Longer A “Gotcha” Game.

Levin says scheduled audits are particularly effective for projects with these characteristics:

  • Strategic implications for the organization
  • Complexity
  • Spans several organizational units
  • Operating with a potentially unrealistic schedule and resources
  • Project team members who have not worked together before
  • Uses new technology
  • Costly

Scheduling also makes the audit part of the culture, which assists in removing the “gotcha” factor.

An Open Mind is Your Friend

Once you’ve identified the nature of the audit, the next step is to consider what you want the project team to have access to. It’s always recommended that auditors have unlimited access to personnel, records and facilities. But here are some other items to consider under the Five Project Management Processes of initiating, planning, executing, controlling and closing.

  • Stated policies and procedures
    • Interview employees where possible
    • Compare results to intent
  • Review records
    • Determine if policies are applied consistently and accurately
  • Include case studies of specific incident
    • Identify peaks and pitfalls
  • Conclude with recommendations

Communicate First, Ask Questions Later

Before the audit gets underway, take the opportunity to communicate with all the project team players about the purpose of the audit and the plans for execution of the results.

Large-scale projects, especially challenging ones, can be fraught with tension. If employees know from the outset that they are safe, that their concerns will be heard, and that there is real value in terms of change, improvements and accolades, they will become part of the process.

In other words – bust the myths that audits are fault-finders and operate like corporate “police”. Instead encourage openness. Everyone wants success and open communication is the path that gets you there.

Keep the Report Off the Shelf

Share the report. So often executives see reports and recommendations never get implemented, and those who are involved in the project never get a chance to make improvements or try new ideas.

A philosophy of transparency will ensure that those involved in the project continue to take ownership of the successes, while at the same time ponder ways in which difficulties can be overcome in the future.

This helps sidestep that worn our phrase: “nope, we tried that,” which seldom comes with an offer of any alternatives.

When all players involved in a project know what the project successes and challenges were they can understand root cause and make systemic changes.

This is Part IV of our Quality Control Series. To read Melissa Martin’s other posts in this series, see The Cost of Quality, Total Quality Management, and Quality Assurance.

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