"The absence of alternatives ...."

We've talked at some length about how companies learn to improve. But in many ways it sounds like a difficult process, requiring a lot of persuasion over a long period of time. So it must be tempting to wonder if there is anyway to shorten the exercise. 

Can you force a company to get better?

Henry Kissinger, of course!

You can certainly supply strong motivation. Years ago I worked for a small startup that had no special interest in certification. We knew our technology was good, and that's where we focused our attention. Then one day our largest customer told us that they had adopted a new policy: after January 1 of the next year, they were going to cancel all contracts with any supplier that had neither ISO 9001 certification nor a solid plan to get it. I remember our CEO announced to us in a Town Hall meeting that our new strategic plan required us to work towards certification with all deliberate haste. As he laid out the details, he quoted Henry Kissinger: "The absence of alternatives clears the mind marvelously."

Grigory Potemkin: Don't
let him plan your ISO
9001 implementation!

Does it work? Well, we got our ISO 9001 certification, although by the time we finally achieved it our market had changed and we no longer relied so heavily on that one customer. (The tech market is notorious for turning on a dime.) But there's a risk to this kind of forced compliance. If you are not very careful with the implementation of the new measures—ISO 9001 regulations or whatever else they might be—your organization could settle for a superficial or "Potemkin" compliance in which the new methods are used to create an overlay over top of the old ones. One day every year, at the time of the audit, everyone follows the new methods and uses the new terminology; then for the next 364 days, work is done like it always was before. This is not an effective approach.

We've talked about this risk before (for example, in this post and this one) and it is always real. When Robert Cole summarized research on American companies adopting Japanese quality methods in the 1980's and 1990's, one study in his pool focused on six second-tier automotive suppliers who were required by the major OEMs* to adopt Total Quality Management (TQM). Of those six, only one adopted the methods in a way that made a lasting difference, or that was fully integrated into the normal way of working. Four suppliers adopted the new approach "rather mechanistically, with the methods not being used regularly or to their greatest potential." And one supplier did nothing at all. Cole describes this nearly-perfect statistical distribution dryly as "a full range of outcomes," and points out that in many cases it was only years later that these suppliers finally put in the effort to upgrade their operations.** 

Naturally this is only one study. It doesn't prove that if you try to force improvements on your suppliers, you'll have only one in six odds of success. But it does remind us—what we already know—that improvement is never easy. It does suggest that if you want your suppliers to improve in some respect, you should work with them, stay engaged, and support them on their journey. As we've seen, external support always makes a difference. And in the long run that support may be more effective than giving your suppliers an offer they can't refuse.    

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* OEM = Original Equipment Manufacturer. In this context, it means General Motors, Ford, Chrysler, and so on. 

** Robert E. Cole, Managing Quality Fads: How American Business Learned to Play the Quality Game (New York, Oxford: Oxford University Press, 1999), pp, 127-128.