This article appeared in Upside
Magazine (June 1993).
With the possible exception of leveraged buyouts, no subject has attracted more intense management attention over the last decade than the quality movement. You can't flip through a business magazine or get through an industry conference without being pummeled about quality. The name of the world's foremost quality guru, W. Edwards Deming, falls from the lips of all but the most retrograde managers. "Quality officers" now occupy perches near the top of many corporate hierarchies. And, in a pathetic attempt to ape the world's quality leaders, a host of American companies have copied Japanese management techniques with religious fervor--right down to the daily ritual of singing the company song.
Nonetheless, the data tell us that the great majority of quality programs are failing. Why? As yet, no one has offered a convincing explanation. But a bionomic analysis suggests that the "root cause" lies in a fundamental misunderstanding of what quality is and how it comes about.
Like virtually everyone else in Western society, most executives and managers think in rational, mechanistic terms. Products and services are objects, things designed to attract customers. Now that quality is in, old designs must be modified to include a feature called "quality." Once the quality feature has been added to the base product, the company's quality problem is fixed. Business as usual can resume.
In this conventional view, building quality into products is much like solving any other engineering problem. Certain skills must be mastered before you can generate the desired product features. Consequently, most quality programs amount to a curriculum of specialized techniques, like statistical process control. According to the normal reasoning, once those techniques are in place, quality will show up automatically, just as cars always leave the assembly line with four wheels. Yet in real life, quality doesn't seem to work that way.
In the few Western companies where dramatic quality breakthroughs have been achieved, places like Ford, Motorola, and Xerox, the thinking about quality differs profoundly from the mechanistic norm. Instead of seeing quality as a thing, or as a product feature, these companies regard it as an organizational mindset. Put another way, quality is a manifestation of the company's culture, of its way of being.
This crucial distinction is driven home by former Xerox CEO David Kearns in his new book, Prophets in the Dark: How Xerox Reinvented Itself and Beat Back the Japanese. From the beginning of his seven year campaign to turn Xerox into a quality leader, Kearns realized that he would have to remake the company from within. No program or set of techniques copied from elsewhere could raise quality at Xerox. As he saw it, Xerox's lousy quality, angry customers, and plummeting market share were the inevitable consequences of the way Xerox's people practiced business day-to-day. Xerox had a diseased culture which led to consistently anti-customer, anti-quality behaviors.
For example, in the early '80ss before Kearns' revolution began, business meetings inside Xerox had proliferated to the point where managers traipsed from one to the next, with almost no time left over for productive work. Quite often, no one knew why a meeting had been called or what, if any, result was expected. All too many meetings were pointless exercises in political posturing.
Kearns had inherited an organization where virtually all power was held by an authoritarian headquarters bureaucracy, an organization which that suppressed dissenting views and bad news from front line people in field sales, the factories, and product development. Rigid financial controls were the order of the day. The corporate mantra, carried over unchanged from the '60s when Xerox held its patent-based monopoly, was profit growth, not customer satisfaction.
As Kearns saw it, Xerox's dismal situation could not be turned around by loading a quality program atop the existing organization. Nothing short of a deliberate cultural revolution, one designed to completely transform the way the organization worked, would be sufficient. But when he pressed W. Edwards Deming for specifics on how to go about changing an organization, Deming had nothing to say. Not even the greatest of the quality gurus had figured out how to transform an organization's culture.
Ultimately, Kearns came up with his own strategy for fomenting a corporate revolution. At the critical meeting where he launched his campaign, Kearns summarized his six part plan.
"This is a revolution in the company and we have to overthrow the old regime. The quality transition team is the junta in place to run things on a temporary basis. The standards and measures equate to the laws of the land. The reward and recognition system is the gaining of control of the banks. The training is capturing control of the universities. Communications is the seizing of control of the press, and senior management behavior is putting your own people in place to reflect the revolution. All of these elements are needed to change a culture," he said.
By recognizing that quality was not a thing that could be tacked onto a product, by realizing that quality is an expression of a company's culture, Kearns was able to define his challenge correctly. As difficult and risky as the transformation of Xerox turned out to be, the revolution succeeded. Xerox won the 1988 Baldrige Award. Customer satisfaction is at an all-time high. And the company has recovered large chunks of market share, especially in Japan.
When contrasted with Xerox's stellar success, the abject failure of most quality programs offers an important insight into the fundamental challenge facing businesses today. Because of the microprocessor, and the Information Age economy that it is spawning, successful organizations, particularly those which grew up in the pre- microprocessor, Machine Age era must undergo a radical transformation if they hope to survive.
In a sense, the world-wide quality movement is one facet of the dramatic shift from the Machine Age to the Information Age economy. Companies that cling to their Machine Age mindsets have no hope of becoming world-class in quality. To deliver quality, the people inside an organization must see themselves and the nature of business success in terms radically different from those which shaped Machine Age organizations.
In the Machine Age, organizations were optimized for producing endless quantities of unchanging products in reliable volumes for predictable profits. Management's job was to make sure the corporate production machine ran smoothly. Workers played the role of sophisticated robots. Stability, order and control were the highest objectives. Change was anathema.
But in the Information Age, change is everything and everywhere. Collapsing product life cycles, turbulent technologies, proliferating distribution channels, and shifting consumer preferences compel organizations to adapt continuously. The era of stability is just a fading memory. Profiting amidst chaotic change is what business is all about.
In effect, the issue of quality reduces itself to the challenge of relentless change. Machine Age organizations, by their very nature, must reject all but the most incremental change. Stability, order, and control are utterly incompatible with continuous change. As a high-ranking executive of a major U.S. manufacturer recently confided to one of my colleagues, "I'm totally supportive of our quality programs as long as they don't disrupt things around here."
By contrast, truly quality-conscious organizations are based on the assumption of continuous disruption. Brutally self-critical, quality organizations subject every process and procedure to scrutiny and rethinking. Good enough never is. If it ain't broke, you fix it anyway. Nothing is sacred. Ceaseless pressures for ever higher levels of customer satisfaction make change the only norm.
Rejecting a mechanistic view of quality as a thing, Information Age organizations see quality as a process, as a way of working. Instead of top-down control over mindless workers, information feedback loops, like quality statistics, are established to allow intelligent workers to continuously refine their methods. Decision-making power shifts from the headquarters apparatchiks to self-directed teams, to the people who actually make a difference to customers. Regardless of a worker's level or title, he or she is responsible for thinking and acting in the customer's interest on behalf of the organization.
It takes a quality transformation, not just quality program to generate and sustain a new culture, a new way of being. Transformations, like revolutions, cannot be copied, they must be lived through.