John Guaspari
EXCLUSIVE ONLINE COLUMNIST

A common lament about total quality runs along these lines: "I thought that total quality was supposed to be the answer, but it wasn't! I thought it was supposed to be the differentiatior, but it hasn't been! I thought it was supposed to give us the competitive advantage in our markets, but it didn't!"

Such comments are more of an indictment of seriously miscalibrated expectations for total quality than of its shortcomings. The fact is that when total quality tools and principles are applied diligently and appropriately, they will lead to dramatic improvements in all aspects of a company's operations: reduced costs, improved productivity, faster time-to-market, etc. Unfortunately, the debate over total quality (and its first cousins "reengineering," "cycle-time reduction," "customer focus" and "becoming a learning organization") is drowning out a more important point.

The final analysis points to a single overriding business issue: value. When customers make purchase decisions, they compare what they got to what it cost them. "Got" can refer to intangibles (like "peace of mind" and "status") as well as to the actual hard product or service, and "cost" can refer to intangibles (like "frustration" and "aggravation") as well as the price. If you offer the best ratio of got/cost (i.e., the most value), you win. If you don't, you lose.

That was true 20 years ago, when the buyer of an American-made car could expect something on the order of six to seven defects during the first three months of ownership. And that was OK. It's not that we wanted those defects, or that Detroit did a survey and set their defect rates based on customers' responses. ("How many defects would I like? Oh, I don´t know. Six, maybe seven, I guess.") It's just that we compared what we got (a new car) to what it cost (several thousand dollars plus a number of trips back to the dealer for service) and determined that we couldn't do any better. Which we couldn't. Until, of course, we could.

The same scenario played out in any industry. Apply for a mortgage in the 1980s? It probably took five or six weeks to get your loan approved. But you were willing to wait. Why? Because you liked the feeling of not knowing whether you would qualify to own your dream house? Of course not. It was because it was the best you could do. Until, of course, it wasn't.

Talk with people who owned an early personal computer. At the time, having two 5-1/4" floppy disk drives was heaven because it meant not having to swap out diskettes as often. When they then used a PC with a hard disk, their definition of heaven changed.

Time after time, the dynamic is the same. Goods and services are offered to the marketplace, and an acceptable level of value emerges. Customers adjust their expectations, and buyers and sellers tend to cluster around that value level until someone gains an edge by offering more (product plus intangibles) for the same or less cost (dollars plus intangibles). Then a new value standard emerges.

Fifteen to 20 years ago, the edge came from applying quality tools, moving from defect detection to defect prevention, and saluting smartly when anyone said, "Do it right the first time!"

But once everybody got on the quality bandwagon, those actions were no longer enough. At that point, "Do the right things right the first time!" became the rallying cry, and customer-focused quality emerged to provide the value edge because customers are the ultimate arbiters of what those right things are.

After a few more years, the value level went up again. Having dealt with more customer-conscious suppliers, customers became more demanding. They wanted what they wanted when they wanted it, the way they wanted it. Operationally, that translated to, "Do the right things right the first time, and do them fast!"

"Time" became the focus--being more flexible and adaptable to customer wants and needs. If you were first at being fast, you gained a competitive advantage. For a while. Eventually, others caught on and became quicker and more nimble. Everybody had gained the same advantage, so it wasn't much of an advantage any more.

And so it goes, with absolute performance levels going up, but--competition being a relative matter--competitive advantage constantly and relentlessly up for grabs.

It is in such a context that total quality is best understood. Total quality is the most powerful set of tools, principles and practices that organizations have had to achieve dramatic performance improvement along any number of dimensions. Bemoaning the fact that it wasn't the answer after all misses the larger point. Ultimately, it all comes down to who can provide customers with the most value. The role of total quality is to provide the solid foundation on which to build value. That is not a denigration of total quality's contribution; rather, it is a clear-eyed elucidation of it.

One critical aspect of total quality's contributions is that it forces a focus on "key business processes," those series of cross-functional activities that are at the heart of what an organization does for its customers. This prompts a final assertion: The process by which an organization determines what is of value to its customers, communicates those findings throughout the organization and acts on those findings is the most important business process of all.

The trouble is that very few organizations do it, at least in a formal, rigorous way. Which in turn leads other organizations to assume they don't have to do it, either. Which they don't. Until, of course, they do.

About the author

John Guaspari is president of Guaspari & Salz Inc., a Concord, Massachusetts-based management consulting firm. The books he has written include I Know It When I See It and The Customer Connection.