Is Quality really free?

A few weeks ago I was having lunch with a friend, and we were talking about work. She works for a small company struggling with growth, and when she started there her charter included implementing a Quality Management System. But there were always daily fires to put out first, and at this point she said she has shelved that project for the time. There are a lot more immediate things that have to be done first. Finally she sighed and said, "We just can't afford Quality right now."

This took me aback, just a little. Ever since Philip Crosby, we have all told each other that "Quality is Free." But how can that be? In fact, this slogan turns on the dual meaning of the word quality. On the one hand, quality just means doing things well. On the other hand, Quality [often with a capital Q] refers to a whole body of formal practices that organizations implement—a professional body of knowledge, with its own professional organizations and certifications. As I have said many times before (including as recently as last week), these two meanings are not the same.

Quality should be free, at the most basic level, because in a perfect world (where everyone always knows what to do) it should cost no more to do a job right than to do it wrong. In a more sophisticated sense, Quality is "free" because—even if it does cost a little bit more to do it right—you make that money back by avoiding the cost of rework or of replacing failures under warranty. This second line of thought is what justifies the cost spent on a formal QMS: yes, filling out the forms and following the procedures takes time (and time is money); and yes, you are paying inspectors and auditors who are not themselves engaged in production or sales. But without these forms and procedures and inspectors and auditors, your rework and warranty costs will eat you alive; so in the long run you are money ahead by having them.

"In the long run." That's the key. Or as one of my coworkers put it many years ago, "Therein lies the rub, bub." You have to have some time and money to spare first, before you can put the systems in place that will ultimately generate any savings.

Think of a paved road, as an analogy. Paved roads are a very basic—and very useful—piece of infrastructure. They enable the movement of human beings, the transportation of goods, and the delivery of services. Modern economies would be unthinkable without paved roads. For the economy as a whole, the net return on investment—the surplus of economic activity that they enable minus the cost of building and repairing them—is incalculably huge.

But paved roads don't grow on trees. For each paved road you see anywhere, someone had to decide where it was going to go; someone had to grade the land; someone had to lay out the road; and (only at the end of a long process) someone had to pave it. All of that required human effort, all of it took time, and all of it cost money. In an economy with no way to generate a surplus, no one can afford to pave a road.

And I think this is where my friend is, right now. There are just too many things that have to be done first, before a QMS will even be a meaningful concept. Maybe sometime in the next year she can move the inventory system out of Excel. Maybe she can regularize the purchasing activity. One thing at a time. And then in a while, when the company can afford it, she can go back to implementing a QMS.

Does that mean the company is doing a bad job in the meantime? Heavens, no! The company's day-to-day work is just fine, because the people who work there have mostly been there a long time and "just know" how to do it right. The overall level of competence across the team is very high. So yes, they are doing a good job today. The only problem is that their current methods aren't scalable, precisely because they depend on such a high level of competence. So if the company wants to grow, they are going to have to put systems in place. They are going to have to rely more on procedures and less on "just knowing." They are going to need a QMS.

Maybe next year.