Wednesday, December 19, 2007

Trick or Treat?

It’s October and one of my favorite holidays is near: Halloween. Although this year’s holiday holds more tricks than treats as our economy teeters on the edge of recession thanks to an unstable housing market.

As we look forward to a new year that’s likely to be full of more economic bad news, it’s a good time to take a hard look at your organization’s quality system. After all, your goal as a quality professional is to help design products, systems, procedure, work instructions, data analysis and reporting systems, and more that help your organization to be as efficient, competitive, and profitable as possible.

I think it’s a great time for you—Mr. or Ms. quality professional—to ask yourself if your organization’s quality is better today than it was last month? Last year? Ten years ago? How do you know if it is better or worse? How do you define better or worse? Do you measure your quality success in terms of defects? Satisfied customers? Profits? Employee retention? Stock price? What may have been important last year or last month may not matter as much to your organization and your customers as something else today.

You may have the most accurate gages, the highest tolerances, the highest performing product, and lousy customer service. Or, you might have the best service in the industry and lousy products. What matters more? More important, what matters now? And, most important of all, what will matter tomorrow, next month, next year, next decade?

The “what will matter” question is one that Japanese manufacturers have excelled at for decades. And it’s a question that few U.S. manufacturers have been able to comprehend. Take U.S. automakers, for example. They’ve spent two decades catching up to the Japanese. And, they’ve succeeded. Their defects per thousand are on par with the Japanese, but they failed to accurately comprehend where the U.S. consumer would be today. And, I would venture to say that they have failed to guess where consumers will be next year, five years and 10 years from now.

Toyota and Honda accurately predicted that all things being equal in terms of fuel economy, defects, reliability and such, that the consumer would be drawn to functionality and design. (Although I must say that General Motors seems to be closer to hitting this mark than its rivals.)

The Korean automakers have learned from the Japanese. They’ve managed to bring their quality levels to world-class standards in a relatively short time frame. They, too, are now focusing on the future.

The Big Three should take some solace from the knowledge that the Chinese automakers with their low labor costs and government support haven’t seem to caught onto this concept—yet. They, too, are running in catch-up mode.

Another industry where forward-thinking companies are cleaning up is major home appliances. Ten years ago our kitchens and laundry rooms were filled with Kenmores, GEs, Amanas, Frigidaires, and other U.S. brands. Now, LG, Samsung, Bosch, and other non-U.S. brands are popping up everywhere. European and Korean appliance manufacturers correctly met current market needs for more energy efficient appliances that are quieter, with larger capacities, and that have more functionality.

Six years ago I bought a matching Maytag washer and dryer. I was thrilled with my purchase. At that time, it was difficult to find an appliance brand in this country that had a better reputation for quality. Sadly, I didn’t realize that Maytag’s quality had gone down the drain. My Maytag repairman is anything but lonely. We’ve had our washing machine serviced so many times that I’ve lost count. My wife (She Who Must Be Obeyed) longingly eyes the new front-loading washers every time we pass them at Lowes.

So, here’s my Halloween trick (or treat, depending on your perspective) for you: Answer these three questions:
  1.  Is your quality better today than last year? How do you know the answer to this? Do you have accurate metrics to compare? What are you measuring? How do these measurements affect your products (e.g., defects, tolerances, reliability, etc.), services (e.g., customer satisfaction, retention, etc.), employees (e.g., satisfaction, turnover, productivity, etc.), stockholders (e.g., share price, market share, etc.), and regulators (local, state, federal, and foreign governments) (e.g., environmental, health and safety compliance, etc.).
  2. What does “better” mean to your organization? What are you striving to improve and why? Obviously, your answer will include all of the above, but what else? What is happening in your organization and with your customers and the market that you as a quality professional need to know about? Is it cheap Chinese-made goods? Is it a new government regulation? A new competitor? Start from scratch. Reevaluate your quality system. See what matters to your customers now. 
  3. What are you doing today to ensure that your organization’s products and/or services are meeting the needs of your customers next year? What are you doing to determine these future needs? A crystal ball won’t help, but customer surveys, focus groups, and the like can. I know that many quality professionals believe that this is the domain of marketing or sales, but if you don’t know what customers think of your organization and your products now and what they are looking for down the road, you’re doomed. 

OK, I know this column read a lot more like a college lecture than normal, but, hey, it’s almost Halloween.


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