The Quality Progression: Getting Beyond the Obvious

Tom Peters

Industry Week magazine proclaims that service is priority #1 for business in the ’90s. Other publications and pundits say it’s globalization or time-based competition. So I guess quality, the ’80s obsession, is now under control.

Hold on. Polls taken in 1988-1989 suggest that the consumer is unconvinced that American producers are closing the quality gap relative to our most formidable overseas competitors. I agree. There are success stories, such as Motorola and Xerox, among the 1988 and 1989 Malcolm Baldrige National Quality Award winners. But these firms hardly represent the norm. And, to be honest, I remain skeptical about even the award winners.

Here’s why. I see the quality improvement process as consisting of six stages. Most firms haven’t gotten through Stage One. The award winners are seldom beyond Stage Two.

Stage One: “Conformance quality.” This is the home of “do it right the first time” (the battle cry of quality guru Phil Crosby) and statistical process control (Dr. W. Edwards Deming et al.). Conformance quality—getting production or service process variance under control—is the staple of this stage. Employee and work-team involvement are musts. Probably no more than 25 percent of our manufacturers (and 10 percent of our service firms) have mastered Stage One.

But accepting conformance quality as the answer to quality woes masks a near-fatal flaw. At issue: Conformance to what? The “what” is usually engineering specifications that have little to do with customer tastes. Most conformance quality programs are hopelessly internal in their orientation.

Stage Two: Answering “Whose specs?” In a recent interview in the Financial Times of London, Du Pont Chairman Edgar Woolard admitted that “We were not focused enough on the external world.” Describing the success of the firm’s Stainmaster carpet, he added, “For the first time, we actually went to the marketplace and found out what the customer most wanted in a carpet, which was ease of cleaning.”

Service improvement expert Ron Zemke sarcastically concludes, “Left to our own devices, we pay more and more attention to things of less and less importance to the customer.” Stage Two firms attempt to get the customer into the specification—through more focused market research, enhanced efforts to listen to (and then take seriously) salespeople, more regular customer visits.

Stage Three: Perception is king. Healthcare industry research reveals that few malpractice suits are the result of unhandy scalpel work by doctors; most are the product of a series of demeaning actions that discolor the whole hospitalization process for the patient. An early Honda Acura ad read, “To fully appreciate the precision that goes into our 24-valve, 2.7-liter, 161-horsepower engine, touch the ashtray.” Such are the bases of our judgments about quality of a product or service.

I’ve long declared that “perception is all there is.” Well, it isn’t quite all—but it’s a lot. Stage Three firms, and there are few of them, learn to turn the attention of all activities, from design to manufacturing to purchasing to accounting, to “soft,” perceptual traits. It isn’t easy—just ask Walt Disney!

Stage Four: “All to the customer.” Moving through Stage Three really means learning to let the customer run your show. Stage Four, then, is almost obvious. You must, somehow, get everyone out with the customer; get customers routinely into every nook and cranny of the organization. I often challenge executives to invite no less than 50 percent outsiders, customers, distributors, vendors—to annual “strategic retreats.” At the other end, in the plant, printer Quad/Graphics provides a sterling example: It is unusual not to find numerous customers floating around a Quad/Graphics printing plant. The neat trick is going much further, getting all the indirect functions—accounting,
order entry, personnel, MIS—consistently out and about with customers.

Stage Five: Teams with customers. Making customers full-scale partners requires even more. This next step involves getting most everyone working with outsiders (customers, distributors, vendors) on improvement-project teams. The joint teams work at conformance-quality improvement, process improvement (e.g., order entry), accounting-systems improvement, product design. The distinction between insider and outsider starts to disappear. Support-function participation is as important as direct-function participation.

Stage Six: “No barriers, no borders.” I have an infuriating way of sketching organization charts these days. I simply draw a big circle on a flip chart and proclaim, “Everybody in.” The quality masters of the ’90s will get this point: To achieve true responsiveness to customers’ needs, barriers between functions inside the firm, and borders with outsiders must be destroyed.

Have any gotten to Stage Six? Yes, some bits of some firms. I see signs of it at the likes of steelmaker Chaparral, textile-maker Milliken & Co., Quad/Graphics, Monsanto Chemical Co., Texas Instruments, and Motorola. The point: Would-be winners must establish a scheme that includes all six stages of the quality progression. Getting to, and through, stages one and two is no mean feat; but it’s not enough for survival.