Most proprietors would dearly love to expand their businesses by 285% in three years. and to raise their business efficiency at the same time. In fact, you could hardly achieve the former without the latter - fourfold expansion puts a heavy strain on processes and systems.
That realisation no doubt helps explain why over 80% of dealers selling Sharp photocopiers signed up for a programme that's called 'Integrated Quality Standard', but which actually aims beyond quality - at total business development. The 285% is Sharp Electronics' own target: since it operates only through dealers, they must grow in step, and so will their profits, if IQS pays off.
The programme forces the traders to concentrate on weighty matters which affect all companies, but which most (especially dealers) never tackle with true professionalism. It covers every function, starting with management itself. The bosses must define and document policies for finance, marketing, sales, operations and services, health and safety, the environment and (the key to everything else) human resources.
Establishing a 'delegate, not abdicate' structure and culture is crucial. John Keith, whose Business Development Unit consultancy is running the project, says that 'The biggest problem is changing from themselves to a management team.' Very likely a former copier salesman, the freebooting entrepreneur must install both management disciplines and the skilled people who can apply them.
Sharp's dealers, typically employing 30-50, had several incentives to take their heads out of the usual small business sand. The industry had earned a bad name for the financial skulduggery that attracted the stern disapproval of the Office of Fair Trading. IQS guarantees, among many other points vital to customers, that the finance and leasing arrangements are honest and transparent.
Another compelling reason is that Sharp needs badly to break into the corporate market, selling bigger copiers to bigger companies. The dealers are just as hungry for the big time - and sophisticated customers buying more sophisticated products require higher standards from their suppliers. If you want to upgrade your clientele, you have to upgrade your management.
How much upgrading was made clear in the Sharp case by an initial, quick appraisal which showed each dealer, activity by activity, where they fell short, measured in precise percentages. Inevitably, there's a long distance to travel between this starting point and the objective. That's external certification by an independent body, testifying that the company has satisfied six sets of quality standards. Annual checks will follow.
This is the first time, Sharp claims, that anybody has integrated the whole half-dozen, from ISO 9002 to BS-7750. The initials and the certification badges, while nice for letterheads, aren't important in themselves. What matters is that every single item in the business system has been examined. What's found wanting (or missing altogether) then gets submitted to planning, improvement - and testing.
Testing is the word. Take finance. How many proprietors, hand on heart, can swear that the following are up to snuff? Financial planing, budgeting, margin control, management accounting, variance analysis, costing systems and cash management? Anybody who needs 'variance analysis' explaining needs much else besides.
Nobody pretends that modernising management comes easy or cheaply. The programme takes 30 consultancy days at most - some of Sharp's dealers had already embarked on their own quality programmes, and will need less help. The average dealer will pay £7,000-8,000, the highest £10,000-11,000, with their Japanese supplier picking up the other half of the tab.
That's by no means all the cost. These relatively small companies - 55 dealers with 130 outlets, mostly exclusive to Sharp - have only a few managers and supervisors, who all have to commit a great deal of time and effort. As Keith says, 'They have got businesses to run. How hard and fast can you push them?' That's the snag that kills many efforts at self-improvement.
Yet the real issue is how good a business you're running. For this particular programme, it's quite early days. The first certification isn't expected until October, with the rest complete by February. Significantly, the dealers insisted on all doing IQS simultaneously, not in stages, as their friendly supplier originally intended. But nobody wanted another dealer stealing a competitive advantage - and that's what it's all about.
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