The Cost of Poor Quality and its Relation to Poor Communication

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The Cost of Poor Quality and its Relation to Poor Communication

“There is only one boss, and whether a person shines shoes for a living or heads up the biggest corporation in the world, the boss remains the same. It is the customer! The customer is the person who pays everyone’s salary and who decides whether a business is going to succeed or fail. In fact, the customer can fire everyone in the company from the chairman (CEO) on down, and he can do it simply, by spending his money somewhere else. Literally everything we do, every concept perceived, every technology developed and associate employed, is directed with one objective clearly in mind – pleasing the customer.”
Sam M. Walton, CEO Wal-Mart

As we all know quality is defined as the degree to which the project fulfills requirements. Product quality relates to the individual characteristics that the product should have to satisfy the customer or end user needs. Quality is only a perception until it becomes a reality for or to the receiver.

The intent of this paper is to emphasize the effects of Non-Conformance Costs and how they relate to poor communication.

The PMBOK Guide (2013) states that “Cost of quality includes all costs incurred over the life of the product by investment in preventing non-conformance to requirements, appraising the product or service for conformance to requirements, and failing to meet requirements (re-work). Failure costs are often categorized into internal (found by the project) and external (found by the customer).”

Communicating Effectively

The following statistics show some examples of the importance of communicating effectively and the impact of poor communication for an organization and in a project environment:

  • In 70% of our communication we filter out or change the intended message of what we hear.
  • US$135 million is at risk for every US$1 billion spent on a project
  • 56% of that is at risk due to ineffective communication.
  • Effective communication is associated with a 17% increase in finishing projects within budget.
  • Employees’ morale drops when communication is ambiguous, unfocused, or unclear.

A very important task for a PM is to ensure that the guidelines regarding the work required to produce the product or service intended, are given in a clear and concise manner. In addition, the PM needs to verify that the project team understands the message related by him/her.

The impact of poor communication affects everyone in the organization:

  • Increased employee turnover: Employees and team members are not clear about what is expected of them.
  • Ineffective change management: People react negatively to changes when they do not understand clearly how these changes are going to affect them. Management will probably be resistant to different or better ways to do things until they understand how these changes are going to affect the bottom line.
  • Poor customer service: Customers will be negatively impacted, especially when they perceive that their requirements have not been clearly understood and/or met, or when they are not getting the answers or support they need, etc.
  • Failed project delivery: Projects do not finish on time, within budget and with the quality standards previously identified.
  • Lower shareholder return: Shareholders lose revenue.
  • Lower efficiency: Processes and procedures are ineffective.

There are also communication barriers that can negatively influence the understanding of guidelines, processes, procedures as well as gathering customer requirements. Some of these barriers are:

Differences in perception and viewpoints: There are times when one key stakeholder or a team member may think that their way of doing things is the only way. This creates a negative work environment and people will not be willing to provide new ideas because of fear of rejection.

Cultural differences: It is important to be respectful of other people’s culture and backgrounds to gain knowledge and insights from them.

Using jargons: There are instances when a meeting is scheduled with the customer and a technical team to review product specifications and the language used is too technical for the customers or other stakeholders to understand. Therefore, it is important to always identify the audience and use language that can be understood by non-technical attendees.


In summary, quality is defined by the customer. The PM and project team need to collect customer requirements to be able to plan and manage quality. The communication factor cannot be ignored as it plays a very important role when it comes to delivering expected results by the customer.


By Sophia Crawford, MAP, PMP, ITILv3

Professor of the Knowledge Areas for Project Management I (Quality Management) course in the Master in Project Management Program at the University for International Cooperation.

Por |2018-08-11T05:57:08-06:00septiembre 21, 2017|Categorías: Artículos, Global School of Project Management|Etiquetas: , , , |

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