Quality - Executives Believe Quality Contributes To Bottom Line - Definitions Vary

[Wes Bucey]

This is a press release (March 15, 2004) from ASQ.
I'm interested in comments from both ASQ members and non-members.

I've put this in the Coffee Break arena to allow more "emotion" regarding the topic than we normally exhibit in our "educational" threads.

I would expect comments regarding the basic topic (excutive perception of Quality) and the role ASQ plays, including the advisability of hiring a market research firm from Milwaukee to perform this study. Is there any relationship between ASQ elected officials or staff and this company? How was it chosen? etc. etc. (The "full report" mentioned is a series of PowerPoint slides - my pet peeve!)

EXECUTIVES BELIEVE QUALITY CONTRIBUTES TO BOTTOM LINE, BUT DEFINITIONS OF QUALITY VARY
MILWAUKEE – A survey sponsored by The American Society for Quality (ASQ) and conducted by Market Probe reveals that a vast majority of American executives believe quality contributes to the bottom line of their businesses/organizations, but the way they define quality varies.

More than 600 American executives from four industry segments—manufacturing, services (including government), healthcare, and education—provided their perspectives on the value that quality brings to their businesses/organizations. Ninety-nine percent of respondents said they believed quality contributes to the bottom line, and 92% believe that an organization-wide, coordinated effort to use quality techniques provides a positive return.

Defining quality did not elicit such uniform agreement. Sixty-four percent of respondents believe that quality is a management tool, while the remaining 36% view quality as being built into a product and service, but not necessarily a management tool. When asked to define quality, a majority of respondents equated quality to “customer satisfaction.”
“It's encouraging to know that most executives, no matter what industry, believe in the practice of quality and the value that it can bring to their businesses, not just in terms of economic return, but also in the form of customer satisfaction,” said Ken Case, ASQ president. “However, it is a bit disconcerting that many executives do not view quality as a business management tool when many of the continuous improvement efforts practiced in business today grew out of the quality discipline and the work of quality professionals.”
The survey also shows that there is a gap between executives' awareness of quality improvement processes and implementation. When asked about their awareness and usage of benchmarking, total quality management, quality circles, ISO 9000, Six Sigma, and Baldrige, respondents from all four industry segments reported high awareness and usage of total quality management and benchmarking. And, given quality's roots in the manufacturing industry, it came as no surprise that manufacturing executives report greater awareness of ISO 9000, quality circles, Six Sigma, and Baldrige than leaders in the services healthcare, and education sectors. Actual use of the six techniques across all industries as indicated by survey respondents, however, was considerably lower than reported awareness.

“The sizeable gap between usage and awareness leads me to believe that businesses and organizations either do not use quality methodologies to improve their operations or they just don't realize that the processes they have in place are attributable directly to the quality discipline,” said Case.

A full report of the findings, including industry-specific breakdown of responses and demographics, can be found on ASQ's Web site at www.asq.org/survey/.
The American Society for Quality (ASQ) is the world's leading authority on quality. The 104,000-member professional association advances learning, quality improvement, and knowledge exchange to improve business results, and to create better workplaces and communities worldwide. As champion of the quality movement, ASQ offers technologies, concepts, tools, and training to quality professionals, quality practitioners, and everyday consumers. Headquartered in Milwaukee , the 58-year-old organization also administers the U.S. Commerce Department's Malcolm Baldrige National Quality Award and is a founding partner of the American Customer Satisfaction Index (ACSI), a prominent quarterly economic indicator.

Press Contact:
Chris Lochemes
clochemes@asq.org
800-248-1946
March 15, 2004

[Jennifer Kirley]

I choose to think that ASQ's sponsoring this study is not compromisng it like, say, the small group of government sponsored scientists that disagree with the overwhelming worldwide body of scientists on global environmental matters...

My admittedly unscientific poll of MBAs of my acquiaintance has uncovered no evidence yet that Quality (with a capital Q per Tim Folkert's very nice definition) is being taught to business students. They get some theory, but are not well trained in its deployment until after they hit the work force.

What experience they get is then subject to the practices, good or flawed, of the company (one or more) they work for. GE's Six Sigma has made Quality fashionable again, but true Quality is still a job being done, I dare to say, by someone else. They could also go on to any number of business specialties (like finance) and drift away from Quality completely.

I recently read of a summer course titled Breakthrough Customer Satisfaction at Harvard Business School. That's progress, I think.

So, no, the survey results do not surprise me at all.

Do the same survey around here and I think I know how it will turn out, sigh.

Jennifer

[ZeeMan]

What executive in his/her right mind is going to say that they don't believe that Quality has an impact to their business? They may as well just tear up their ISO certification letter on the spot. That's like asking "Do you think companies should behave ethically?" I'd be more interested in a breakdown of the 1% who didn't think Quality affected their bottom lines.

Asking a non-question like that leads me to think that ASQ might have - just maybe - had a particular agenda in mind for the survey...

Here's some more great survey questions:
Do you think the economy affects your business?
Do you think weather affects farming?
Did you know your Mom hates you?

[Rob Nix]

I thought the same thing when I read Wes's post (moments ago) Zman. What an underwhelming sense of the obvious!

It is like the statement that 9 out of 10 dentists prefer sugarless for their patients who chew gum. Only that one dentist knows where his paycheck comes from.

And after attending the ASQ AQC for the last few days, and hearing Ken Case and others speak, my confidence level has not improved dramatically.

Most of the discussions were either touchy-feely (e.g. "the human side of six sigma") or debates regarding definition. But I did learn that, yes indeed, my mom loves me.

NOTE: There were some very good presentations at AQC as well.

[ZeeMan]

I'm glad I'm not the only one, Rob. I find logic - at least in my market segment - tends to be an ill-regarded and under-utilized tool.

I suppose that Wes probably already had that thought in mind when he made the post, so I'll try to take a stab at the other content.

My experience is that executives are not in the business of having an opinion on quality. They're in the business of making the Board of Directors happy who, in turn, are in the business of making the shareholders happy. While I'm sure they're all aware of quality issues and programs and the like, they will err on the side of making money when push comes to shove. If that means allowing product out the door to make sales projections for the quarter, even though they know they'll see those products returned for repair in a month or two, they'll do it. That gives them a couple of months to figure out how to make next quarter's sales.

I recently took an ethics course at a local college. It was interesting in that it dealt less with ethics from a business standpoint than it did from a philosophical standpoint. It got me thinking that quality - in many regards - is the corporate morality police. We have to make sure that we're doing the 'right' thing (from a customer's perspective; from a company's longevity perspective) even when it is hard for the company to do so in the face of other enticements - like getting paid now.

My hope is that our continuing effort will not so much change executive's minds, but help shareholders understand how a dedication to quality is a fundamental tool in assuring the long-term profitability of their investments. If we do that, it'll filter down to the executives faster than you can say Taguchi.

[Wes Bucey]

Originally Posted by Rob Nix

I thought the same thing when I read Wes's post (moments ago) Zman. What an underwhelming sense of the obvious!

It is like the statement that 9 out of 10 dentists prefer sugarless for their patients who chew gum. Only that one dentist knows where his paycheck comes from.

And after attending the ASQ AQC for the last few days, and hearing Ken Case and others speak, my confidence level has not improved dramatically.

Most of the discussions were either touchy-feely (e.g. "the human side of six sigma") or debates regarding definition. But I did learn that, yes indeed, my mom loves me.

NOTE: There were some very good presentations at AQC as well.

The one thing I can bet without having been present is that the "very good presentations" were NOT by ASQ staff or elected officials. How about it, Rob?

Frankly, I would have thought this little piece would have drawn many more posts dripping with sarcasm and scorn for

• the fact the "full" report is only a series of PowerPoint slides - no details
• the fact the report didn't indicate the expertise of the polling company (none is obvious to me)
• The "dumb factor" of the questions (thanks, Zeeman!)

I had an interesting conversation last week with several of my wife's fellow graduates (she just got a Masters degree early in May.)
They were all hooting over the "customer satisfaction survey" they received from the University which was loaded with self-serving "forced" answers on a number scale 1 - 10.

We all hooted at different things:

• I couldn't restrain my absolute scorn for the incredible number of grammatical and wrong word choice errors.
• Uniformly, the graduates were appalled that there were only multiple choice or graph answers allowed - no essay questions.
• They wanted to be heard as individuals, not as statistical blips.

Yet, if 2 per cent of the graduates are toadies who complete the survey with high scores, the University will tout the results as if it represented the feelings of the entire class.

It's been so long, I forget whether the ASQ survey indicated how many surveys went out versus how many were returned. What kind of followup did the poller do to get responses in the door? What level were the executives who purported to fill out the survey? Did a staffer fill it out for the exec? I sure would have preferred some raw data to sift for myself.

In my own experience with hundreds of folks in the executive suites at various employers, customers, and suppliers over the years, I can tell you that 100% would answer "yes" if asked if Quality were important in their company. If asked to list the most important factors for their companies without any other prompting (definitely NO list of choices!), I doubt Quality would rank in the top ten for those same executives.

Back during the Eisenhower presidency, it was a common "knowledge" that to get hired at any major American corporation, all you had to do to survive the interview was to remember that every answer had to reflect a strong belief and faith in God, Mom, the American Flag, and apple pie. Vegetarians were as bad as Communists, no degree was better than one from a radical campus like Berkley, and you could drive any car you wanted, as long as it was American.

Sometimes, when I see executives and whole industries marching in lockstep, I wonder if we've progressed one iota from those repressive times.

Deming must be spinning in his grave at all the fear that reigns rampant in industry and life in general today. Some recent headlines of jailing folks without due process reminds me of those terrible years of McCarthy's witchhunts when a mere whisper of "communist" or "homosexual" could get someone blacklisted for life.

The big question to answer is always, "Who benefits from 'dumbness' and fear? There are two ways to deal with dissent when implementing a change in any process:

1. convert the dissenters through reason, logic, and even rewards
   or
2. eliminate the vocal dissenters and control "closet dissenters" through fear they will be also eliminated.

Why do so many organizations seem to choose option 2?

[Bill Pflanz]

[QUOTE=ZeeMan]I recently took an ethics course at a local college. It was interesting in that it dealt less with ethics from a business standpoint than it did from a philosophical standpoint. It got me thinking that quality - in many regards - is the corporate morality police. We have to make sure that we're doing the 'right' thing (from a customer's perspective; from a company's longevity perspective) even when it is hard for the company to do so in the face of other enticements - like getting paid now.QUOTE]

If we are acting as the corporate morality police then that explains why we are sometimes ignored. Defining quality is a lot like defining ethics. Ethics are personal and generally learned early. Doing the right thing means something different to different people. We may not agree with the ethics but there are executives that believe making money for the company is more important than any other issue.

I am not defending unethical executives, but just noting that they have made a personal decision about their ethics on what is right. As shown by the numerous postings on dealing with management, getting them to change their beliefs about quality's importance is not any easier than getting someone to change their ethics.

Good discussion thread.

Bill Pflanz

[Craig H.]

Bill

I agree that it is a question of ethics, but all of us are influenced by our surroundings. Lets look for a second (at least from my view, fire away if you disagree) at just what kind of environment executives at public corporations exist in.

It is true that they answer to the board, and through the board, to the shareholders. They also answer (to a lesser degree) to entities such as the SEC. One thing that seems to me to be somewhat common to these entities, and something oft forgotten, is the role the brokerage firms and stock exchanges play.

They make money primarily when stock (and other instruments, but lets focus on good old common stock) is bought or sold. It is in their interest, therefore, to maintain as high a degree of volitility as possible within the markets (at least just up to the point that all confidence is completely lost, a la 1929) because the volitility spells stock sales /purchases which equals profit. The way to generate this volitility is to focus on the short term, ignoring statistical realities (such as a process being in control, maybe?). Am I making too big a jump if I compare this to Deming's tampering?

So, the force that at least encourages a short term viewpoint, the focus on next quarter's numbers, is motivated by the desire for profit by the brokerage houses and their allies.

How many shares of these are publicly traded?

Executives walk a tightrope, much like politicians. They would be foolish to take a negative stand against anything the represents "goodness". If you were to ask them how important their employees' diet is to the success of the company, does anyone here think a single executive would say "its not important", even as the Twinkees (sp?) roll out their door? To their mind, I believe that their main ethical challenges are to make shareholders a profit and stay in business. The playing field dictates that they focus on the short term numbers, or the long term questions are moot.

As far as ASQ being involved, I wish I could say I was surprised. Anyone else here think our new, enhanced (read: increased) membership fee structure is being put to good use junk (spam) mailing post cards for the latest book release? ASQ, give me a break please. You are becoming the thing we most despise.

Craig