Report from Shanghai

I'm writing this month's column from a conference room in the Shanghai Academy for Quality Management, which I've had the pleasure of visiting this week. I'm here to discuss increased cooperation between Quality Digest and the SAQM.

Led by the dynamic Tang Xiaofen, the SAQM--which is somewhat similar to the American Society for Quality--is a leading provider of training, registration and certification services. It also publishes a number of books and Shanghai Quality magazine.

Quality Digest has run several Chinese-related news stories during the last two years from Shanghai Quality. I am pleased to report that we will begin publishing even more news and articles from China in 2006.

Since my last visit to Shanghai in 2004, the SAQM has moved into new headquarters, a world-class facility consisting of two seven-story buildings with impressive meeting facilities. What hasn't changed is the organization's intense focus on promoting quality awareness in China.

The good people from the SAQM have told me about the Chinese government's commitment to quality. In fact, the government has mandated a performance excellence standard for Chinese businesses to follow. In addition, the government has recently funded a survey to be conducted by the SAQM on the effectiveness of certification in promoting economic growth.

The Chinese government understands the importance of quality in keeping China competitive on the world market. It's unfortunate that the U.S. government has not taken a more active role in promoting quality as a key strategic advantage. The Malcolm Baldrige National Quality Award is an excellent program, but it has never been promoted as it should be.

China may have a political system different than that of the United States, but its economic system is as capitalistic (if not more so) than our own. Everywhere you go in Shanghai, you see signs of free enterprise: Advertising is everywhere, shops are full of designer goods, and entrepreneurship is alive and well.

While here, I was interviewed by Shanghai Quality. The editors were curious about my thoughts on how China could be more responsive to customer needs and how Chinese companies could better compete in the U.S. market.

I told the magazine that I believe it's absolutely critical for any successful enterprise, be it a manufacturer, service organization, government or charitable organization, to listen to the voice of the customer. At its core, quality is conformance to requirements. Those requirements are always determined by the customer, whoever that customer may be. The organization must constantly attempt to determine its customers' needs. The methods for doing so are relatively simple and well-documented: customer surveys, focus groups, feedback forms, etc. An organization that fails to listen to the voice of the customer (both internal and external) is doomed to failure.

Chinese manufacturers have had tremendous success in the U.S. market primarily because of the low cost and high quality of their goods. However, most of the Chinese goods sold in the United States are sold with a U.S. brand name or are somewhat generic in nature. As Chinese manufacturers begin to market products in the United States under their own brand names, they must be more conscious of the tastes of the U.S. consumer. As I mentioned previously, this requires listening to the voice of the customer. It's essential to be obsessive about determining what the customers' needs are and then meeting those needs. Low prices are attractive to consumers, but without quality the success of a low-cost strategy will be short-lived.

Through the enhanced cooperation between the SAQM and Quality Digest we hope to bring you more insight into the uniquely Chinese approach to quality. Just as we learned a great deal from the Japanese about quality during the 1980s and 1990s, I believe we will begin to learn about quality from the Chinese in this decade. I see great opportunities, for example, in using the Chinese model of government to promote economic growth through quality improvement.

The Chinese people have a unique history and have overcome great obstacles to take their rightful place on the world stage. Instead of fearing the Chinese, we in the United States need to be open to them and learn from their success. Our political systems may differ, but we do have a long history of cooperation and we share a dedication to ensuring better lives for our citizens.

There are those who may disagree with me. They fear China and worry about the United States losing jobs and our manufacturing base. I understand this concern, but China is here to stay. As I wrote last month, we feared Japan during the 1980s and the change that the Japanese manufacturing surge wrought. There will be many changes to our economy in the coming years. It's in our own best interests to embrace the Chinese and learn from them instead of turning away in fear.

What do you think of China and its effect on the U.S. market? What are your experiences with Chinese quality? What do you think the future holds for our relationship?