Quality Meets the CEO

Corporate management does not care about quality.

This is the cold, hard reality of the software world. Management cares about profits, revenues, earnings, and market share. Software is a profit center that makes money. Quality is a cost center that eats money. One of the primary reasons why quality assurance and testing have so little influence within a corporate organization is because you, the quality professional, insist on talking about quality instead of the bottom line.

I know this because of my fairly unique role as both a writer and speaker on software quality, and also as the CEO of a fast-growing software quality business. Every day, I am faced with making difficult decisions regarding the quality of our work in the face of pressures to maintain profit margins, decrease time to market, and pay the bills. Every CEO faces these issues and works to provide "good enough" quality to his customers, while satisfying the needs of the company shareholders, employees, and other stakeholders in the organization. This article is about these tradeoffs and how-by understanding the CEO's perspective-you as a software quality professional can more effectively communicate quality concerns and needs to all management.

The CEO's Job
The ultimate role of a CEO is to provide a long-term return on investment to the shareholders of the company. However, shareholders are much like black-box testers. Their perception of the company is based upon what they see as output: quarterly earning reports, new products on the market, new strategic partners. In much the same way that testers will immediately dismiss the quality of a new release if the first five tests fail, investors will reduce the value of a company if short-term earnings do not meet their expectations. The issue of short-term progress versus long-term gains is the central conflict that a CEO must address when making decisions. Place too much emphasis on the long-term, and investors will bail (with the exception, apparently, of Internet stocks). Ignore the long-term and some other company will pass you by.

So how does a CEO deal with this short-term versus long-term conflict? I handle each decision as if I'm a shareholder, seeking a return on investment.

Take, for example, the question of buying equipment versus leasing it. While in the long-term it costs less money to purchase equipment, leasing is a better alternative if short-term cash flow is a concern. In this scenario, the short-term viability of the business takes precedence over long-term return for the money spent on this equipment.

Of course, it's often not this simple. One might argue in the example above that leasing equipment is always a better alternative, freeing up short-term cash for investment in something else-but that assumes the money will actually be used in a manner that gives a greater return. All of a sudden a simple decision about how to pay for office equipment has become a complex decision that relies partially on unknown future events and a CEO's ability to quantify the risk that these future events will provide a greater return opportunity.

When you ask me to make a decision, it's not usually about which way to pay for something. But you still have to understand that I do not judge your proposal in isolation; it's one of ten or twelve, all contending for the same pot of money. You have to convince me to decide that your proposed action is the best alternative. The proposal that will have the advantage is the one that clearly states a business case-and demonstrates an understanding of the short-term/long-term tradeoffs and any associated risks.

Basically, good decision