What Is SQDCM? Meaning, Measures, and Daily Management
SQDCM stands for Safety, Quality, Delivery, Cost, and Morale. It is a way to keep several important dimensions of performance in view. Each needs meaningful measures and a process for responding to problems; the acronym alone does not tell a team what to improve.
I first heard SQDC in 1996 at General Motors. Our plant was learning from Toyota, and putting Safety and Quality ahead of Cost challenged the priorities I had seen. The original version of this post, written as the 2014 World Cup began, used the occasion to ask which goals deserve our attention.
What does SQDCM mean in daily work?
- Safety – Protecting people–patients, staff, customers–from harm is the first priority.
- Quality – Delivering products or services that meet needs and expectations consistently.
- Delivery – Providing what the customer needs, when they need it, without delay.
- Cost – Managing resources efficiently as the result of improving Safety, Quality, and Delivery.
- Morale – Building an environment where people are respected, engaged, and able to contribute.
These are connected priorities, not five isolated scorecards. Reducing rework can improve quality, delivery, and cost together. A staffing cut that lowers this month's spending while increasing delays, errors, or exhaustion may make overall performance worse.
SQDCM in healthcare
In healthcare, Delivery often becomes Access: getting appropriate care to a patient when it is needed. Safety includes patients and employees. Quality includes reliable care and service. Cost includes the resources used to provide that care. Morale concerns the experience of the people doing the work.
Possible measures include harm events, rework, waiting time, cost per case, and staff feedback. These are examples to adapt, not a prescribed dashboard. Define what each measure includes, where its data comes from, and what decision it is meant to support. A count of reported near misses needs particular care: more reporting may reflect greater willingness to speak up, rather than more unsafe work.
Choose measures that help a team act
A useful daily conversation starts with what has changed and what help is needed. If access is poor, identify the delay in the process. If a quality problem recurs, study how the work is performed. Give someone responsibility for the next step and return to it, rather than repeating the same red number every morning.
Cost matters. The concern is treating cost reduction as a substitute for improving the work. Better quality can reduce rework and waste, but savings are not automatic or always immediate. Some improvements require investment. Review the effects on safety, quality, delivery, and people as well as the financial result.
For a leadership example, see my discussion of Larry Culp's emphasis on SQDC and putting safety first. For the underlying management approach, see Lean Hospitals.
Avoid turning the board into a blame exercise
A measure being red means it missed a target. It does not establish why, whether performance changed meaningfully, or who is responsible. One measure can be green because its target is easy while another is red because its target is demanding. Look at performance over time and investigate useful signals before demanding explanations for every fluctuation.
I explore that distinction in this introduction to Measures of Success. A board is more useful when it helps people choose a response than when it simply sorts results into good and bad.
Morale deserves the same attention as the other dimensions. Ask whether people can raise concerns, get help, and contribute ideas. Psychological safety supports those conversations; it does not remove expectations for performance or follow-through.
Start with one useful review
At your next review, choose one measure and ask: What do we know about this process? What remains uncertain? What small change could we test, and how will we know whether it helped? Keep the other dimensions visible so that improving one does not create a problem elsewhere.
Explore learning and accountability
Read a free preview of The Mistakes That Make Us to see how the book approaches learning, accountability, and improvement before deciding whether it is right for you.
An article by Quint Studer that talks about things CEOs should track daily, quarterly, and yearly…
Daily:
1. Outpatient no-shows (Cost, Access)
2. First case start-times (Cost, Quality, Morale)
3. Patient volume (Cost, Access)
4. “Door-to-doc” time in the emergency department (Safety, Quality, Access, Morale)
5. “Decision to admit to departure” time in the ED (Safety, Quality, Access, Morale)
6. Number of patients who leave without being seen in the ED (Safety, Quality)
7. Agency and overtime costs (Cost, Morale)
8. Major service issues (Quality, Morale)
9. Major engagement issues. Are any physicians or employees upset? (Morale)
What I see missing are direct measures of patient harm…. SAFETY. Where are measures of medication errors, employee harm incidents, near misses, etc. etc.?
That’s critically important. Even a luminary like Quint doesn’t, to me, put enough focus on Safety, unfortunately.
Ditto that.
Studer’s approach can be complementary but insufficient for the long-haul unless you believe you can smile and care your way to lasting improvement.
The approach is highly attractive because it can move patient satisfaction scores, at least in the short term, and is relatively simple to do for the leader that believes this is a fundamental way to reinvent the way of managing.
I’ve seen this as Productivity Quality Cost Morale. Do you know where the set comes from?
Where PQCM comes from? I don’t know. SQDCM is pretty standard in the auto industry anymore – Toyota or otherwise.
[…] See on http://www.leanblog.org […]
My reply to Michel Baudin’s post/comment about this topic:
Thanks for reading and commenting, Michel. Sure, these aren’t going to be the only five “true north” things that matter or the top five for any software business. And, they’re probably more directions than goals. You’re right that these need to be turned into measures… and they can’t just become something that “degenerates” into meaningless targets or quotas (like the waiting time scandal with the VA). Part of the inspiration for my post is seeing hospitals that barely give lip service to safety… what they’re really measuring and really caring about is cost, cost, cost. That’s not right.
Mark –
As you seem to have a knack for doing, you’ve hit the nail on the head. SQDCM are great first steps in measuring any business. I’m of the persuasion that, early in a Lean Transformation, the Champion and their staff need to hold phase 1 of a Hoshin Kanri and establish top-down metrics against which to hold themselves accountable.
I typically have this core group (Champion & Staff) review their mission statement and ask the questions:
* What does our mission commit us to do?
* What will we measure to know whether we’re achieving those commitments?
Once the core group has established these top-level metrics, they need to appoint one of their own members to be “accountable” for each metric. This accountability comes in two forms: posting performance & improving performance.
Next comes the cascading of each top-level metric to every subordinate leader, establishing a goal for each metric and holding each subordinate leader accountable for publishing and improving on each.
Over time, elements of these metrics get cascaded down to every leader in the organization. In each case, leaders need to post their performance publicly and establish an ongoing list of Actions that will improve performance of each metric. These public postings become a focal point for senior leaders, during their daily Gemba Walks, to initiate conversations targeted at coaching their subordinates.
That, in turn, establishes a new form of leadership: “servant” leadership. The role of leaders transitions from command & control, to helping their subordinates identify the root cause of their problems and, using the Socratic Method, work through the resolution to them.
In some cases, the subordinate will not have the positional power to overcome their obstacles. In those cases, the servant leader will use their own positional power to overcome the obstacle; or, will escalate it upward until the appropriate power is brought to bear.
This methodology not only improves performance, but forges “relationships” between leaders & led. The fact that leaders initiate each activity by first performing it themselves, creates another key element of Lean: leading by doing.
In these ways, leaders not only improve performance throughout their organization, but begin to change the culture itself. That, of course, improves the ‘M’ of your metrics: morale.
[…] Having a balanced set of goals, putting safety, quality, and patient flow first… […]
[…] the Lean mindset, I was taught that the key priorities for an organization were SQDCM – safety, quality, delivery (think of this as patient access), cost, and morale. If this […]
[…] In the next presentation from a Chinese hospital, the speaker started talking about the need to “improve [patient and employee] satisfaction through Lean management” and that “we have the same goals and purpose” as I expressed in my presentation… namely safety, quality, waiting times, cost, and employee morale (SQDCM). […]
[…] focused on value, which means better quality and lower cost (or the typical balanced set of SQDCM metrics), not just cost or […]
In SQDC, how is Cost measured? You said Cost is the end result, and I agree. Because of that, it seems to me that on an SQDC board if Safety, Quality, or Delivery were red, then Cost would automatically be red, because cost is related to the others. Is there a set of circumstances where Cost would be red and Safety, Quality, and Delivery were green?
Cost could be measured in a number of ways, depending on the level of the organization. It could be a “labor hours per unit” measure, or a cost per unit, etc.
Green / red is pretty arbitrary since we’re comparing to goal. It’s quite possible for SQD to be “green” if the goal isn’t very challenging and for cost to be “red” if there’s a really aggressive goal that’s being met.
I really enjoyed how you are drawing a parallel between the Lean management system and the excitement of the 2014 world cup. The vlog provided and pointed out the importance of setting clear goals using the “SQDC” which stands for Safety, Quality, Delivery, Cost. These goals are important for guiding a principles or your team’s action and efforts. I like how the vlog emphasizes the importance of balanced approach and that lean isn’t a cost cutting methodology it is the end result not the primary goal.