Quality Failure

Quality improvement consultants and trainers have long promoted and rationalized quality improvement as the rainbow leading to the pot of gold. We've also said the rainbow had a pretty high arc; it was going to be a difficult climb. Why, then, after carefully pointing out the steps, do so many quality efforts fail? The answer, I believe, lies in our omission to explain the nature of rainbows.

In other words, we failed to say, "When you get well on the way, the rainbow's path will abruptly become invisible, leaving your executives seemingly stranded in mid-air -- but don't worry, this is perfectly natural when climbing rainbows." This is not a minor omission. The scare these executives get when they can't find old, familiar ground destroys trust and motivation and sends them scurrying back the way they came, feeling lucky they escaped with their names still on their office doors.

Motivation to begin quality processes has not been a problem for U.S. companies. It is now difficult to find a large company that has not attempted some change at least once. But the success ratio is much less than would be expected. In Reengineering the Corporation, Mike Hammer writes that 50 to 70 percent of companies that attempt reengineering don't succeed. Clearly, managers attempting quality improvement are in some way not fully prepared to go the distance.

If nothing else, the low success rate has taught us that quality improvement is much more difficult to implement than to understand. The reason behind this is not obvious, but it implies that what we teach companies about quality improvement doesn't align with what they need in order to achieve it. Most failed quality-improvement attempts are blamed on lack of planning, lack of understanding or, ultimately, lack of real commitment. These answers are true to a certain extent, but they're deficient because they don't reveal what happened to the commitment -- they aren't root causes. Surely, the commitment was there when management brought in the consultants and rolled out the proclamation. So something must have happened during the process of change that took the wind out of the sails. Thinking past the usual explanations and asking why again leads to inadequate training and preparation in the areas of change and expectation.executives become decidedly uncomfortable (perhaps on a subconscious level) when surprised by the realization that they are being asked to do things that totally go against everything they've ever learned about being managers. Neglecting to prepare them will leave them with insufficient motivation to carry change through this obstacle. Whether executives research quality themselves or rely on consultants, the process usually starts with a review of several different quality-improvement options, then one is chosen and the company plunges in. But this process totally bypasses the groundwork necessary to make intelligent choices. The process should start with issues that are even more fundamental:

* Internal examination of motivation.

* Determination of how much change is required to attain the desired outcome. This includes a review of the quality options and their associated risk.

* A thorough explanation of what change means.

* Inherent obstacles to change.

Motivation

The first step in deciding if quality improvement is needed is to evaluate why it is needed. What is the motivation? What a company hopes to attain and the urgency of attaining it dictates the appropriate course of action. The amount of change that can be expected is proportional to the motivation driving it. The company also needs to evaluate its current management style and quality performance, its resources and its competition. Once done, the company can begin looking at the levels of quality improvement options, but they still can't choose one until they understand the options and the degree of change required to make them work.

Quality options

Obviously, before executives can make intelligent decisions about the future course of their companies, they need to evaluate what they are trying to achieve and how far they will go to achieve it. In other words, they need to understand their goals, the quality processes available to attain them and the complexity of those processes.

All quality processes can be roughly grouped into three levels by degree of possible benefit and severity of required change, and they can be thought to reside in an organization as a management philosophy. The three categories are:

* Improvement -- Requires supervision of existing processes. Quality improvement on this level deals with routine objectives. Uses habit, routine, instinct and custom.

* Redesign -- Requires change and modification. Reevaluation and modification of existing design to eliminate inherent problems. Requires new management approaches and planning.

* Restructuring (Reengineering) -- Involves a quantum change in situation. Requires visionary leadership to guide a complete change in the way things are done. Uses new methods and new technology.

Quality changes within level one are well within the comfort zone of established practice and are therefore easier than level two or three, but they will not produce dynamic improvement. In many companies, existing processes and systems have been strained to the limits of their performance, and still the results have been disappointing.

What change means

Many companies have seen the need for change beyond level one, and they have actually begun implementing visionary processes only to retreat back into level one when they realized they were not prepared for situations beyond their managerial experience and knowledge. I have seen companies embrace Deming's 13 points and fail. Of course, there are 14 points, but these companies chose to exclude point 12, which deals with abolishment of annual or merit ratings and management by objective, because it required change the companies would not make. Companies that do such things fail, not because they refuse to adopt the point, but because they don't understand radical change and its relationship to the success of the quality-improvement process.

Quality improvement within level two (where Deming's principles reside) and level three (brought forth by Lester Thurow, economist and dean of MIT's Sloan School of Management) requires changes that go beyond the boundaries of all that managers have learned about managing. But managers don't realize this when they buy into a quality-improvement process and are, therefore, not prepared to deal with it. Would they tackle quality improvement at these levels if they understood the risk? Certainly, they would be better prepared to make the decision, and because of it, those who were still sufficiently motivated to attempt radical change would have a much better chance at success.

Inherent obstacles

To further understand why quality improvement is difficult requires analyzing the fundamental structure of U.S. business. The structure of most businesses, whether they provide products or services, comes from the principles of Adam Smith, an 18th-century economist and philosopher. Smith was a visionary, and he saw in the technology of the industrial revolution the possibility for manufacturers to increase worker productivity and thus reduce costs, not by small percentages but by orders of magnitude. His fundamental idea was to break work up into a series of small tasks, each to be done by a specialist skilled in one task. The advantages came from the increased skill of each individual worker repeatedly doing the same task, the saving of time lost passing from one species of work to another and to the invention of a great number of machines that facilitated labor, thus enabling one person to do the work of many.

Today's modern businesses operate under the same fundamental principle: the division and simplification of work, which can utilize workers with fewer skills. Management of this work evolved the same way. As the chains of small tasks became longer, management divided into smaller, decentralized divisions to oversee it. But over many years of expansion, more steps were needed in the chain and, thus, more specialized workers. The larger the company, the more required steps and more required management. The complexity of the whole system fragmented work tasks, which led to more management to control it. Nonetheless, this is the structure of U.S. business, and to abandon it goes against a manager's basic understanding of business.

This is also true of Frederick Taylor's 19th-century philosophy. Taylor was another pioneer of scientific management in the machine age. He promoted separation of planning (management) from execution (workers). Good management, he believed, was the art of smoothly transferring executives' ideas to workers' hands. He even went so far as to say, "Any change the workers make to the plan is fatal to success." The fundamental concepts of Smith and Taylor are etched in stone; there is no other knowledge base, no other experience. No wonder implementing the kind of change required to compete in the new environment is so difficult, and the difficulty is compounded by the fact that very few managers who attempt change understand what it really means in the context of quality improvement.

The ideas promoted by these men of vision were appropriate in their time and helped realize great advances in productivity, but they are not appropriate now. In contrast, consider that Japan is not saddled with the ghosts of outmoded work paradigms. Their philosophy of business management is based on the teachings of Walter Shewhart, Peter Drucker and W. Edwards Deming, all U.S. quality pioneers of the 20th century. Japan has used the philosophies of these men to establish a new benchmark in performance. The hallmark features of this new performance standard are:

* Outstanding quality.

* The ability to transform ideas into products in very short time periods.

* The ability to take advantage of state-of-the-art technology.

* The ability to adapt quickly to new market conditions.

Adopting these features does not mean that U.S. business should try to adopt Japanese practices. On the contrary, U.S. business needs to develop processes based on U.S. business strengths while incorporating the hallmark features of success. Clearly, worldwide competition and information technology will demand these features in business systems of the 21st century. Can U.S. companies make the leap? Without a doubt, but executives need to be prepared to make good choices if they are to make good companies. And it is the responsibility of the quality educators to make sure they are prepared.

About the author . . .

Paul R. Keck has been involved with quality improvement for nearly 20 years. During this time, he has been employed as an engineer at Chevron Research and Technology Co., but he has also found many opportunities both inside and outside Chevron to focus on the perplexities of quality. Keck is a certified quality instructor, active in various Chevron quality activities, an author and a consultant.