Quality in hard times

In last week's post, I remarked on the risk that mismanagement can teach employees not to care about the quality of their work: specifically, if employees are penalized for doing good work, they will quickly learn not to repeat the experience. A reader commented that this outcome doesn't even require active mismanagement; the simple failure to reward good work can do damage by itself. She wrote that the absence of any "consistent opportunity for reward can create a 'well, why bother then?' atmosphere." And of course she's right. I suspect many of us have experienced contemporary examples of exactly this dynamic at one point or other. In further discussion, she gave me a concrete historical example from the history of the British Royal Navy, whose officer corps had become so crowded during the nineteenth century that no further promotions were possible. Nor were there a lot of wars for the Navy to fight, once Napoleon was defeated in 1815. So with no chance for fighting and no hope of promotion, many officers stopped caring about their work and the corps began to rot.  

'What comes next? They become careless of themselves; most of them take to drink, more or less, for that is a habit almost impossible to wholly abstain from, while leading that kind of monotonous life; from that they become despised by their seniors in the service'.... The diary of a seaman in the Leander in the Pacific in 1863-5 notes seven officers court-martialed for drinking, not counting the chief engineer who died of it.*

Not officers, but you get the idea.

But this observation raises a further question. What does reward mean? Are rewards always money? If yes, we have a problem, because no company can count on consistent profitability, year in and year out. One year, somehow, times are going to be tough. One year, somehow, there won't be any extra cash on hand to distribute rewards for even the best service. And it would be painful to think that hard times might destroy the incentive for quality work.**

I have worked for companies that hit hard times, and my experience is that we continued to do good work. But everyone's case is a little different. There were a couple of people who were just there for the paycheck, or who had financial obligations that couldn't wait: they left promptly for greener pastures. And there were a couple who were laid off as the company retrenched. But many of us stuck it out, and continued to do the best we knew how.

If I ask myself Why? I see a number of factors. One is that we had already built up an ésprit de corps from working together in better times, so that none of us wanted to let down our colleagues. We weren't supporting The Company (which is more or less an abtraction), but we were supporting Larry in the next office, and Frank down the hall—people with whom we might bicker about little stuff, but whose work we still respected.

A second factor is that management communicated with us openly, and—so far as we could tell—treated us fairly. They rolled out information in All-Hands Meetings, so that everyone got the same message at the same time. And they let us know, "Here's what we can do for you today; here's what we want to do for you but can't right now; here's how we plan to get there." Knowing that we were all in the same boat made a difference. Knowing that we weren't being played for suckers made us willing to do our part.  

We discussed similar points in this blog last year. Mostly people like working together, so they are willing to cut the company some slack when things go wrong. But people can think for themselves, so they want you to tell them the truth. (And they can usually tell if you are lying!) People need you to give them honesty, respect, and simple justice every single day—which is far more often more than they ask for a raise or a bonus. So if you (as manage­ment) are willing to fulfill your obligations to give your people honesty, respect, and justice—even when you can't back those up with more money—they are generally willing to return the favor by continuing to fulfill their obligations to you. 

Thus can you ask for quality work even in hard times. But only thus!

__________

* From N.A.M. Rodger, The Price of Victory (New York: W.W. Norton & Co., 2024), p. 75. I thank Terri Williamson for raising the point out of her study of the Royal Navy, and for providing the citation. 

** The point would become even more acute in case the economy as a whole were ever to enter a contraction spiral, because then employees couldn't just jump to a profitable competitor. For explorations of this possibility, see e.g. the research of J.M. Greer, for example here.     

           

Where do you start? — take two

Last week, I wrote about employee engagement—and espcially about the research that suggests a strong correlation between employee engagement and business performance. But while I was writing, my mind started playing with the idea to see where it would lead.

In the first place, while the article that I reviewed was careful to assert no more than a correlation between engagement and performance, I reflected: If there were a causal connection, which direction would it point? Is it more likely that good business performance would cause employees to feel like they understand their jobs and have the tools they need? Or is it more likely that employees who do understand their jobs and do have the tools they need will perform well in the marketplace? Pretty clearly the second one is more likely.

In the second place, the article makes it clear that the measures for employee engagement are actionable. If your employees feel neglected and unengaged, there are concrete things you can do to improve the situation: make sure they know what is expected of them, make sure they have the tools that they need, praise them when they do well, and so on.

Then suddenly I thought of an article that I posted here four years ago. At the time, I asked: if you have just taken over responsibility for the Quality system in an organization that needs reform, where do you start? At a practical level I stand by what I said then, that internal system audits are the only way to get objective information about what's missing. But if you have several parts of the organization that need attention, where should you focus first?

Based on the Gallup results, I think the answer may be: Management.

After all, IF it is at least plausible that improved engagement drives higher quality work and improved results, and IF management can take concrete steps to improve engagement, THEN doesn't it seem likely that trying to improve performance without those concrete steps by management will be an uphill battle all the way? We have already seen that treating your people with justice and respect can be an important form of preventive maintenance to make sure the organization functions the way it should. So it stands to reason that if you want to reform or reinvigorate an organization, those are the points you should check first.

Now I want to draw a distinction. If you have to address "Quality issues" throughout an organization, that can mean two different things.

• Case 1 is a case like the Riverville plant that I discussed last month. The people there wanted to do a good job, but they had a different definition of how to get there than the managers of Octopus Enterprises who had recently acquired the place.
• Case 2 is more severe. It's the kind of place where people don't care about doing a good job, and just want to get through the day.  

In Case 1 people still have the right attitude, so I think the core issue is one of communicating how the new system will help them achieve the same good results they are already trying to achieve with the old system. Ideally, the new system will make things easier, though as we saw in the case of Riverville, the transition can be tough.

But Case 2 is brutal. And there I have to ask, How did things ever get this bad in the first place? My assumption—and I admit it is just an assumption—is that most people start off wanting to do a good job. If that's no longer the case in a particular workplace, my first guess is that the employees have been taught not to care about doing good work by management practices that penalize them when they do. The other possibility is that management inadvertently hired one or two bad apples, and then failed to remove them before they succeeded in corrupting the others. Either way, it is unlikely that the rest of the organization will reform until things are improved inside management.

And really, ... how would you reform an organization's Quality focus without insisting on Quality in management? I think it would have to be like the old Internet meme: The beatings will continue until morale improves.

CAVEAT: I have never had sole responsibility for turning around the Quality performance of an entire organization. And I know that ideas which make sense at my desk are often wrong in the real world. 😀 So I might be wrong about this too. If you have experience that leans in a different direction, please leave a comment to tell me about it!  

           

How much does engagement matter?

We’ve talked about “engagement of people” as a fundamental Quality principle, and at a superficial level it sounds obvious. Disgruntled employees are distracted by being unhappy, so they are likely to turn out bad work; happy employees are not distracted, so they can focus on what they are doing and turn out good work. On the other hand, the world is full of simple formulas that sound right but don’t stand up to empirical investigation. What about this one? Is it true? Or is it just an agreeable fairy tale?

In fact, the correlation between employee engagement and business outcomes has been the subject of fairly extensive research over the years. Last month I ran across a recent study by the Gallup organization, called “The Relationship Between Engagement at Work and Organizational Outcomes: Q^12® Meta-Analysis: 11th Edition” This report dates from 2024, and it is part of an ongoing project by Gallup. There are references in the notes to how the results have shifted since the previous edition. (Answer: not much.)

Briefly, what does the report say?

• The authors define a way to measure employee engagement, and then they identify eleven different ways to measure business performance. 
• They review a whole lot of companies, covering over three million employees. 
• And they find a consistent correlation: the companies whose employees feel the most engaged also have the best performance.

Why do you care?

• I’m glad to see the correlation with performance. Yes, I expected it. But it’s nice to see that it’s true.
• I like the way they measure employee engagement, because the metrics are actionable. I’ll explain what I mean in a minute.

Tell me about the method

Sure. The research pulled together 736 studies across 347 organizations in 53 industries, located in 90 countries; in total they reviewed 183,806 working groups, containing 3,354,784 employees. [See p.4 of the report.] This paper itself is a “meta-analysis,” a statistical method to combine studies of different sizes in order to filter out any idiosyncrasies and make the results comparable. The study establishes correlations but does not directly address causality. [See p.17.] In some cases, the authors deliberately omitted data from 2020, when effects related to COVID-19 clearly overwhelmed the effects that they were studying. [See p.18.] Overall, the findings “show high generalizability across organizations…. [M]ost of the variability in correlations across organizations was the result of sampling error, measurement error or range restriction in individual studies.” [See p.28.]

Fine, what were the numbers?

The study rated organizations based on their employee engagement scores. Then they calculated their business performance on each of eleven measures. Then they compared the business performance of those companies with high engagement against the business performance of those companies with low engagement. And they calculated the percent differences in the two sets of rankings. Here is the key table of results: [See p.5.]

Median percent differences between top-quartile and bottom-quartile units were:

• 10% in customer loyalty/engagement
• 23% in profitability
• 18% in productivity (sales)
• 14% in productivity (production records and evaluations)
• 21% in turnover for high-turnover organizations (those with more than 40% annualized turnover)
• 51% in turnover for low-turnover organizations (those with 40% or lower annualized turnover)
• 63% in safety incidents (accidents)
• 78% in absenteeism
• 28% in shrinkage (theft)
• 58% in patient safety incidents (mortality and falls)
• 32% in quality (defects)
• 70% in wellbeing (thriving employees)
• 22% in organizational citizenship (participation)

The paper spends many pages explaining the method and the calculations, but this table is the payoff. Companies with high engagement have 78% less absenteeism than companies with low engagement? Wow. Where do I sign up?

Wait—how do they measure employee engagement?

I thought you’d never ask.

The metric is something developed by the Gallup organization over years. It’s called Q¹², and it is based on a list of thirteen questions which the employee rates from 1 to 5. Twelve of these questions are very specific and concrete; one of them is a general evaluation. Here is the list: [See p.12.]

• Q00.  (Overall Satisfaction) On a 5-point scale, where 5 means extremely satisfied and 1 means extremely dissatisfied, how satisfied are you with (your company) as a place to work?
• Q01. I know what is expected of me at work.
• Q02. I have the materials and equipment I need to do my work right.
• Q03. At work, I have the opportunity to do what I do best every day.
• Q04. In the last seven days, I have received recognition or praise for doing good work.
• Q05. My supervisor, or someone at work, seems to care about me as a person.
• Q06. There is someone at work who encourages my development.
• Q07. At work, my opinions seem to count.
• Q08. The mission or purpose of my company makes me feel my job is important.
• Q09. My associates or fellow employees are committed to doing quality work.
• Q10. I have a best friend at work.
• Q11. In the last six months, someone at work has talked to me about my progress.
• Q12. This last year, I have had opportunities at work to learn and grow.

I said above that I like this way to measure engagement, because nearly all of these points are actionable. The Gallup organization deliberately chose to ask about issues that individual managers can correct! So if someone carries out a Q¹² survey at your place of work and your department scores low in this or that area, mostly you (if you are a manager) can do something about it. Make sure your people know what is expected of them; make sure they have the tools that they need; make sure they are doing work they are suited for; praise them when they do well; and all the rest. These are part of your job as a manager anyway. The use of this metric means that if you carry out all these tasks conscientiously, you can overcome any bad score related to engagement. You can improve. And we have already seen that quality in management is a critical benefit to the whole organization. 

And in other news ….

Meanwhile, for those who thought the whole point was obvious from the beginning, take heart. In other news, researchers have carried out an expensive study to prove that the best bait for mice is cheese.*      

__________

* “During a six-month period in 1973, The New York Times reported the following scientific findings: A major research institute spent more than $50,000 [$377,390 in 2026 dollars!] to discover that the best bait for mice is cheese….” From Jerry Mander, Four Arguments for the Elimination of Television (New York: Quill, William Morrow and Company, 1978), p. 53.

           

Quality when you have no choices

Last week I argued that Quality has a role in determining the attitude management should take towards workers in the organization; because if management doesn't offer the rank-and-file such simple considerations as respect, truth, transparency, and justice, the organizational machinery is going to break down. In that sense, I said that showing your people respect and justice are just a form of preventive maintenance.

Was I wrong?

I got a reply telling me I was wrong. Specifically, this reader argued that sometimes people are trapped and can't walk away. She reminded me that I have written before about monopoly situations (like public utilities) where competition is absent, and that in such cases customer care often takes a back seat. 

As an aside, it is clear to everyone how these two cases are the same?

Under a monopoly, one party (the seller) provides a good, often a necessity (like gas, electricity, or water). So long as he continues to provide it, he can charge more or less whatever price he wants and can offer more or less whatever level of service he chooses. People who need the good in question will continue to buy from him because there are no alternatives.

By the same token, if membership in some organization offers benefits that some people can't do without—or if an employer hires people who can't afford to quit—those people will stick with the organization on (more or less) whatever terms the organization chooses to offer, because there are no alternatives.

The full comment introduces other examples as well, ranging from slaveholding to contracts with teaser rates. But in all cases the topology of the power relations is the same, even if the magnitudes are very different. 

Anyway my critic concluded—with respect to the discussion of ASQ's current controversies that started this whole thread—that "if there is a benefit to membership that’s (a) independent of the local programs, and (b) unavailable elsewhere, it seems to me that ASQ leadership can do whatever they darn like with your dues, and you members just have to lump it."

"We don't care. We don't have to."

It's a logical argument. We've already discussed that if the lines are too long when you go to renew your driver's license, you can't just patronize a competitor instead; so, perhaps unsurprisingly, there is usually a line. If a public utility messes up your service order, you may not have a lot of recourse short of contacting the regulatory entity that oversees them. And everyone remembers Lily Tomlin's famous line as Ernestine the telephone operator—even people who aren't old enough to remember Ernestine herself: "We don't care. We don't have to." (Ironically, she was spoofing the phone company, which is no longer a monopoly.)*

As for ASQ, whose management controversies, as I say, started this whole thread, there does seem to be a sense in some quarters that the membership are responsible to the management and not vice versa.

• On the one hand, there are regular exhortations from ASQ management encouraging the local sections to find new ways to attract and retain members.
• On the other hand, as noted in an earlier post, headquarters has cut off all the regular remittances of member dues to the local sections (notwithstanding that people are sensitive to loss).
• Nor was there discussion or consultation with the section leadership in advance of this decision (notwithstanding that people are sensitive to slights).
• Nor has there been any public discussion of these controversies inside ASQ. In fact, just last week there was an update to the Community Guidelines for the myASQ discussion forums, forbidding discussion of ASQ's Board of Directors or their decisions.** Nominally the update was to "ensure myASQ remains a welcoming, helpful space focused on our shared professional interests." But concretely that means, among other new provisions, that "Community members shall refrain from using myASQ for activities related to the ASQ Board of Directors or other Society elections, including posting discussions, blogs, and direct messages, unless explicitly authorized in writing." It is not clear to me whether ASQ hopes to keep members from finding out about the controversies, or just wants to push discussion to other locations. (There is extensive discussion on LinkedIn, for instance.) Either way, these developments have all taken place notwithstanding that people can judge independently of how you want them to.

So on the face of it, it does look like there is some point to my critic's argument.

Yes, but no

But I think "on the face of it" is the key qualifier. In general, exploitative monopolies can succeed in the short run, but they fail in the long run. Unless they offer benefits that are worth the cost, in the long run people figure out how to make other arrangements.

My critic talked about slavery. I am no expert in the economics of slaveholding, and I will leave any discussion to those who are. But if we look at a situation that was similar in some respects—I'm thinking of mandatory collective labor in the old Soviet Union—everyone knows that the private or black market economy was far more productive than the official, collective economy.*** It's true that most people couldn't run away. But they were often unmotivated. We've discussed before that the deepest source of Quality is love. For that very reason, though, if you don't care about what you are doing then your work will be no good. It will be at best transactional: Do this to get that. Pretty soon that becomes Do as little of this as you can get away with to get that. If everyone else is doing the same thing, the whole enterprise becomes a house of cards. The joke in the Soviet Union ran, "They pretend to pay us, and we pretend to work."

Think about it for a couple of minutes and you can come up with any number of other examples. It is true that sometimes the obstacle posed by this or that monopoly is very large. It may seem insuperable. But sooner or later, someone will find a way around it, if the monopoly doesn't fall apart first (like the Soviet Union) from its own internal inefficiencies. The only reason Christopher Columbus tried to reach Asia by sailing west was that the people who controlled the overland route were charging too much for spices.

What about ASQ? The society sells educational materials related to Quality, and it offers certification in the various Quality disciplines. These goods are professionally valuable to anyone in the field. In the terms posed by my critic above, they are "(a) independent of the local programs, and (b) unavailable elsewhere"—at least today. But strictly speaking you don't have to be a member to buy them. Members get a discount on classes and certifications, but non-members can buy them too. So is membership worth it? That's a personal decision, but it does give you the chance to make personal and professional connections with other members. And for some forty thousand people worldwide the answer is plainly Yes.

On the other hand, membership has been dropping. ASQ does not formally advertise membership totals, but Google estimates the following numbers overall:

• In the 1990’s: 136,000 members
• In the early 2000s: 100,000 members
• In 2010: 80,000 members
• In 2020: 52,456 members
• In 2024: 40,000+ members

Was this decline caused by the controversies over ASQ management? There is no way to know. All we can say is that it is consistent with what we might expect if members were unhappy with the direction the society's management had taken, but did not think they had the means to change it. But there could be any number of other causes as well. And, as Quality professionals, we know better than to jump to conclusions.

In the end, I stand by my argument that Quality matters in management. Yes, it is always possible for someone to mistreat his employees in the short run and still get some kind of results. But in the long run, such a system will get brittle and sluggish and fall apart. It's the same thing in the market: in the short term, a fast-talking shyster might fleece a few people out of their cash by selling them the Brooklyn Bridge, or gold-painted rocks. But it never lasts. 

__________

* Yes, this counts as "foreshadowing."

** By a remarkable coincidence, the update came shortly after I published this blog post here.

*** "Collective farmers were allowed to cultivate small plots of land and sell surplus produce in private markets. These private plots, though only about 3% of all farmland, produced a quarter of the country's agricultural output." See this article, "How Did the Soviet Economic System Affect Consumer Goods?" by Andrew Ancheta, Investopedia, September 09, 2023.     

      

Quality in management

Last week, I raised the question whether Quality has anything to say about how an organization manages its people and resources internally. To ground the discussion in a concrete example, I referenced a dispute that is currently under way inside the American Society for Quality (ASQ) about funding and budgetary priorities; but honestly I could have picked any number of other companies instead. There's nothing special about the ASQ controversy. From my point of view, really, there were only two benefits to writing about this example: first, I'm a member of ASQ so I happen to know about it (because the topic is unfolding around me in real time); and second, the critical details are already available in public so I could discuss them without violating anyone's confidentiality. (If you check last week's article, you will find footnotes with URL links for all of the substantive data.)

Remember the real question

On the other hand, it's never very useful just to write that "XYZ Corp. did a bad thing." What are the rest of us supposed to do with that? The useful thing is to write information that we can take back to improve our own work. And that brings us back to the original question: Does Quality have anything to say about how an organization manages its people and resources internally?

Last week I took the wrong approach, by checking what ISO 9000:2015 says in the Quality Management Principles. Oh, the information in there is sound enough! But it's all just recommendations, and it's mostly stuff we've heard before. So it's easy to imagine someone in an organization's management saying: 

Look, I believe in providing Quality to our customers. But when it comes to all that talk about "internal transparency" and "treating your employees with respect," I just don't have the time. I want to Ship Product and Make Money; and all that touchy-feely stuff about employee relations and being a Nice Guy—that's all a luxury. Get to work and get your job done. End of story!

Is he wrong?

Getting to work is fine, but he's wrong to call human relations a luxury. But ISO 9000 isn't the best place to see it. Let's back up and remember what Quality is about.

The Quality perspective

Quality means getting what you want, but there are a lot of ways to do that. Critically, Quality is not built in the abstract from a set of axioms or natural laws: there's no set of rules that unfailingly give you Quality. If anything, Quality is more like a giant Lessons Learned exercise, where we cobble together useful techniques by analyzing one failure after another and figuring out what it takes to make sure those failures never happen again. But since there are many different kinds of failures, there are many different Quality techniques—so many that it can be hard to summarize them all.

Still, there are general points that they all have in common. One of them is that if you want some assembly (like a tractor or a stamping machine) to continue to work well, you have to understand the components that go into it and how they are assembled. What kinds of failures are normal for these components? Does this material rust or corrode? Does that material bend or warp? Do these gears need regular cleaning and oiling, or is it better to leave them alone? All of these are normal questions that any Quality Technician responsible for a large machine would consider on a daily basis.

And here is the critical point. The organization itself is a kind of large machine, and its components are human beings! Quality requires that we understand the failure modes of our machines, to prevent breakdowns. Therefore Quality also requires that we understand the failure modes of our fellow human beings, to prevent organizational dysfunction. 

Failure modes

What do we know about human beings, that relates to their possible failure modes in organizations? We know a lot, and there's no way I can summarize it all in a single blog post. But let me list a few facts that I hope we can agree on.

• People are capable of free will.
• People are capable of independent judgement.
• People are capable of rational thought.
• People work together naturally in groups.
• People want to feel respected, and are sensitive to slights. (See research on disrespect, e.g. here.)
• People are, on the whole, more fearful of loss than covetous of gain. (See, e.g., the research on Loss aversion.)

Already, even these six points entail consequences for the management of any organization.

• Because people have free will, they must (at some level) want to be part of an organization, or they will simply walk away. (I discuss this point in more detail in this post back in the spring.)
• Because people have independent judgement, they choose whether to stay with your organization based on their own criteria, and not yours. In fact, different members of the organization might have different criteria from each other.
• Because people are capable of rational thought, you can give them reasons to stay with your organization and expect them to listen. But the reasons you give them should make sense. Also, because people can see with their own eyes, the reasons you give them should match what they can see for themselves—i.e., the reasons should be true. If you give your people reasons that are visibly false, the risk is that they will stop believing you even if you later tell the truth. Also, as I have discussed before, the easiest way to make people think that something is the case is to make sure it really is the case.
• 
  Because people work together naturally in groups—Aristotle called us "πολιτικὰ ζῷα" or "political animals" [Politics 1.1253a]—your people probably want to work for you, by default. And people regularly accept some kind of authority over their work, without chafing at it. But they will not accept just whatever authority you feel like exercising. While a willingness to work together is natural, so is the deep-seated expectation of justice. It is true that people sometimes disagree around the edges about what constitutes justice. But nobody who has a choice will remain part of a community without it.
• Because people are sensitive to loss, be careful before you take things away from them. Of course sometimes you have no choice. Sometimes there are good reasons. But in that case, it is important to counter-balance the loss by giving them something else in exchange. At the very least, you have to explain what you are doing and why. This shows them respect (and people want respect); it also offers them the truth (and people want the truth).

Notice what this means. I have not said one word about Being a Nice Guy. But a small collection of known facts about human behavior (and human failure modes) has already shown us that—if we want to prevent the organizational machine from breaking down—management has got to offer the rank and file respect, truth, transparency, and justice.

This isn't soft-heartedness or soft-headedness. This is just preventive maintenance. And preventive maintenance is one of the fundamental Quality disciplines.

If you are interested, I can use next week's post to review how ASQ has handled its current controversy, in light of these points. Let me know what you think.       

       

Does Quality require shared sacrifice?

We usually think about Quality as one aspect of an organization's interactions with its customers. To the extent that we discuss internal behavior, we usually talk about behavior that has an effect on the customer experience: error-proofing, for example; or calibration; or lessons learned.

But does Quality have anything to say about budget management? What would that mean? Let me start with an example.

Once upon a time, I worked for a company that had several offices across the United States. And we hit hard times. (Since most of my career was in tech, I got pretty familiar over the years with the alternation of boom and bust.) To help us weather those hard times, an announcement came out one day that all of us in the rank-and-file were going to be put on 80% salary. We were told explicitly, "Just work four days a week, because that's all we can pay you for."

But that was only half the message. In the same announcement, we learned that:

• the Regional President had cut his own compensation to ZERO for the duration of the emergency. No salary, no bonus. Nothing.
• the rest of Senior Management got to keep their salaries, but their bonuses had been cut for the year. (And for people at that level, the bonuses represented a large fraction of their total compensation.)

In other words: however hard the austerity measures were going to pinch us, they were going to pinch Senior Management too. The message was clear that we were all in this together. So everybody pitched in, nobody grumbled, and after a while things turned around so we could go back to normal.

It's a great story, and the best part is that it really happened. But of course stories like this aren't exactly common. And I found myself reflecting on it as I considered some recent news from the Board of Directors of ASQ (American Society for Quality).

ASQ and hard times

In principle, ASQ is a volunteer organization. That is, there are a number of administrative roles at Headquarters (and perhaps other places) but the bulk of the work is carried out by unpaid volunteers. 

The Society is divided into geographically-based Sections, so that people who live in a common area can get together, get to know each other, and do things in common. The idea is that social interaction can be useful professionally, but also it's just a nice thing to do.

There are also annual membership dues. These dues cover the overall Society activities, and a fraction of each member's dues goes to that member's Section to help pay for local Section activities.

The fraction of annual dues allocated to a member's local Section is sometimes adjusted, but lately has been hovering right around 6.5%. (That's six-and-a-half percent, not sixty-five.) The remaining 94+% goes to the central organization.

But not this year. The money is normally disbursed quarterly. According to the "Member Unit Financial Management and Reporting" policy approved 2021-11-12, clause 5.1(g), "Dues allocations will be paid quarterly during the year and as soon as practical after the start of each quarter but not later than 30 days after the start of the quarter." In fact, though, Q1 2025 came and went with no sign of the quarterly disbursements. Finally on April 16, we received a communication from the Board of Directors that the Q1 dues allocations would not be distributed.* The explanation was that all our dues allocations had been invested in the stock market; and with the start of a new Administration in Washington DC, the stock market was behaving erratically.

Then on August 4, the Board of Directors announced that they won't distribute any dues to the local Sections for Q2 or Q3 either.** This time the explanation was that they simply couldn't afford to make the payments. ASQ's deficits are too high, and the budget is stretched too thin.

Where's the money going instead? 

The Board announcement explained that ASQ is now rolling out a members-only AI tool called Quincy, "offering members 24/7 access to expert insights, tailored recommendations, and ASQ’s extensive content library at your fingertips." (I guess the Board hasn't been following the recent news about how likely AI is to hallucinate answers to technical questions.) 

Also they've been putting a lot more money into the members' website, "which recently received the Community of the Year award from Higher Logic." [I had to look up who Higher Logic is, but I guess this is a big deal for people who know.]

And of course there are the administrative salaries. The Board announcement told us in tones of alarm that over the last three years distributions to the local Sections worldwide had totalled some $850,000 per year. That sounds like a lot of money. 

• But in 2022, Catherine Jordan (ASQ's outgoing CEO) took home $539,594 in total compensation; while Siddhartha Bhatnagar (the incoming CEO) took home $306,784.*** (Overall total for 2022: $846,378.) 
• In 2023, the numbers were a little more modest: Bhatnagar's total compensation had risen to $415,573, while Jordan's had dropped to only $325,110.**** (Overall total for 2023: $740,683.)

I have no more recent information. But if someone asked me where ASQ could find an extra seven- or eight-hundred thousand dollars a year to keep supporting the local Sections, ... gosh, I think about my experience with that earlier employer (where the CEO cut his own compensation to zero) and the arithmetic looks simple and compelling.

Of course, maybe the Board already had the same idea. Maybe our CEO is currently serving for a dollar a year, or less. I don't remember seeing an announcement, but I might have missed it.

So I asked. I emailed ASQ Component Relations a week ago, asking about any announcement on the subject. Just this morning I finally got a reply that said "ASQ does not share information regarding staffing and/or staff compensation." I wish I were surprised.  

In their defense

I had better clarify a couple of points that make this situation different from the one I started with.

Because ASQ is (largely) a volunteer organization, the dues allocations which have been stopped did not constitute anyone's personal salary. Nobody was relying on this money to pay groceries or rent. 

Many Sections had built up savings over the years. Those with no savings who needed money for an event were encouraged to ask their Regional Director for a special emergency allocation.

And Sections are allowed to raise money on their own (within certain limits). There's nothing to stop a Section from offering a dinner event and then selling tickets to cover it. 

What about Quality?    

With all that said, what does this have to do with Quality? Even if we assume the worst about the current state of ASQ executive pay, does the Quality discipline have anything to say about it?

Yes, but it's indirect. In ISO 9001:2015, pretty much the only clause with any relevance at all is 5.1.1(e) which requires: "Top management shall demonstrate leadership ... by ensuring that the resources needed for the quality management system are available." (ASQ management can probably argue they have done that, by telling us to use our savings and offering special allocations where needed.)

ISO 9000:2015 has a little more to say. I'm thinking of the seven Quality Management Principles that we discussed last spring, particularly the principles of Leadership and Engagement of people.

Recommended actions under the heading of Leadership include (clause 2.3.2.4):

• create and sustain shared values, fairness and ethical models for behaviour at all levels of the organization;
• establish a culture of trust and integrity; ...
• ensure that leaders at all levels are positive examples to people in the organization. [All emphasis is mine.]

Recommended actions under the heading of Engagement of people include (clause 2.3.3.4):

• communicate with people to promote understanding of the importance of their individual contribution; 
• promote collaboration throughout the organization; ...
• conduct surveys to assess people’s satisfaction, communicate the results and take appropriate actions.

These are suggestions, not requirements. And for the most part they are written so generally that it is hard to tell what actions satisfy them. (The very last point about surveys can be objectively assessed, but the others are a lot less solid.) Nonetheless, I think they all point to establishing a kind of common interest between leaders and led, a sense that we are all in the same boat. It may in fact not be possible to describe this kind of common interest strictly in terms that can be supported by objective evidence, but I want to say that most of us know it when we see it—and that most of the time we probably agree with each other's assessments (positive or negative).*****  

Using that kind of criterion, the company that I described at the beginning of this post had clearly implemented the Quality principles of Leadership and Engagement of people. For ASQ, perhaps the best we can say is that an affirmative answer to the same question is not obvious without more data.  

What do you think?

Since the formal standards are so vague, what do you think? 

• Does a commitment to Quality require shared sacrifice? 
• When hard times pinch, should top management make it a point to be visibly squeezed as hard as the rank and file? 
• Why does it matter, or why does it not? 
• Finally, what do you wish I had said in this essay, that I failed to say?

Leave me your remarks in the comments.

__________

* See, e.g., this LinkedIn post.  

** See, e.g., this LinkedIn post.

*** Source: ASQ's 2022 IRS form 990, publicized by Dan Burrows in this LinkedIn post. Of course these numbers don't count salaries for other positions, or any other administrative expenses.  

**** Source: ProPublica Nonprofit Explorer website. Again, these numbers don't count salaries for other positions, or any other administrative expenses.    

***** Even back in the Middle Ages, the justification for compensating kings and nobles and knights so much better than peasants was always that when danger threatened, the kings and nobles and knights put themselves at risk to protect their people.   

      

What is Relationship management?

Relationship management is the last of the seven Quality Management Principles, but in a sense it brings us back to the first one—Customer focus. In the broadest sense, relationship management is about taking care in your interactions with all of the interested parties that affect your work, and your customers are clearly on that list. So you could almost say that customer focus is just a part of relationship management. 

In reality we treat customers separately because they are a very special kind of interested party, and because they have some very special needs not shared by the others. Also—speaking historically—the whole concept of Quality grew out of a concern for customer satisfaction. It is the existence of customers that gives us the concept of Quality in the first place, and so it is not unreasonable for customers to have one Principle all to themselves. 

But in the long run we do well to nurture relationships with all our interested parties (or all the relevant ones); and this principle reminds us to do just that.   

Why bother?

Remember who your interested parties are. ISO 9000:2015 explains that:

The relevant interested parties are those that provide significant risk to organizational sustainability if their needs and expectations are not met. [2.2.4, para. 2]

In other words, these are the people who can ruin things for you. It pays to stay on their good side.

More exactly, you want to encourage them to act in a way that helps you and does not thwart you. But why should they do that? What's in it for them? It is up to you to find a way to appeal to them, so that they see helping you (or at any rate not thwarting you) as in their own best interest. If you can think along these lines consistently—that's relationship management! The rest is just details. 

Who is involved?

Anyone who wants something from you. That could include your landlord, your neighbors, and the state revenue office. Mostly you exclude customers, because (as noted above) they are already handled elsewhere. And you want to focus on the ones that pose the biggest risk. For most companies, most of the time, this means your suppliers.

But it might include others as well. Even your competitors can be considered interested parties. That's what trade associations are about, after all: they are venues where competitors can meet to cooperate on common issues, like encouraging a general market for their products. (Someone once quipped, "You have to sell coffee before you can sell Folgers.") 

Informally, you probably already know which interested parties matter to your business. Formally, you'll capture a list when you document the Context of your Organization. Whether you need to document them any more extensively than that is up to you. (You may remember that last fall I described a stakeholder matrix which captures a lot of information about each interested party, but it's more than most organizations need most of the time.) 

What next?

And after that, it all depends on what you need. A common approach for some companies is to set quality objectives for their suppliers to meet, and then offer support as the suppliers strive to meet them. 

Whether this approach will be useful for you depends on many factors, but it is only fair to add that an important one is surely the question, "How much of the supplier's total business do you provide?" If you are a major customer for this supplier, they are likely to want to work with you. If you are a minor or negligible customer for that supplier, they may be less motivated.

It can also happen that your supplier might point out features of your own operations that hold you back. Maybe you ask your supplier what it would take to negotiate lower prices, and they tell you, "All your orders come in as emergency rush jobs with no lead time. Since we can't plan for them, we have to charge you premium prices." That's a sign of a Quality problem in your own operations—namely, that your planning isn't very effective. If you can solve that problem, it will benefit you in dozens of ways not limited to the prices you pay your suppliers!

If you and your suppliers can help each other in even simple ways like this, you have take the first steps towards growing your relationship into a kind of partnership.

Of course you can go farther. You can enter into collaborative relationships with other businesses, if there is value to be had by doing so. There's even a standard to help you define a system for such collaborations: ISO 44001—Collaborative business relationship management systems. But that's not for everyone. As always, it depends on what you need.

Even if you don't need any formal partnerships and aren't interested in collaboration, though, you still need basic relationship management. No company is an island. And if you treat your interested parties like they matter to you, the odds are good that you'll matter to them.

       

What is Engagement of people?

Last week we talked about the nature of leadership, and about leadership's role in choosing a direction for organizations. But leadership is only half the story. Leadership gives the organization a will, so to speak, by making decisions; but it is the membership that gives the organization hands, to carry out those decisions and get things done. Without its membership, without its hands, the organization scarcely exists at all.

What people often forget is that the cooperation of the membership is ultimately voluntary.* It's easy to forget this fact in ordinary conversation—"I've got a family to support," "I've got a mortgage to pay,"** "Only a few more years to retirement and freedom"—but a fact it remains. The only thing that keeps the members of an organization working at their jobs is that they want to be there. Otherwise they'd walk away.

It is therefore very strongly in the interest of organizational leadership to convince organizational membership that they want to stay. And all the ways and means there are to convince people to stay can be summarized as "engagement of people."

So how do you engage your people?

I'm pretty sure the first step is, Pay them. 😀

But of course that's not all of it. We've all heard people say, "I wouldn't do that kind of work for any price." So what else is needed? It depends, because we all prefer different things. It also depends what options each of us has available. 

There are any number of familiar considerations that make one workplace more attractive than another, so that people want to stay there longer:

• It helps if the leadership treats you with respect, as a responsible adult.
• It helps if the leadership treats you fairly.
• It helps if the leadership communicates clearly what they want you to do, so you don't have to guess (and risk guessing wrong).
• It helps if you feel like everyone's on the same team, and like you are all accomplishing something that matters.
• It helps if you have the chance to learn and improve at your job over time. It is even better if your coworkers and leadership recognize that you have learned and improved, and reward you accordingly.

And so on. Type the search terms "what makes a company a good place to work" into your favorite web browser, and you'll get a long list of ways to engage your people.

How does this affect Quality? 

Love and caring are the deep sources of Quality; so people who love their work and focus on it will do better work than those who don't. For this reason, many of the points I just listed improve Quality because they rid the workplace of distractions. 

As just one example, if you feel that your workplace is managed unfairly, that's a huge distraction which will prevent you from focusing on the work itself. Therefore leadership must not only be fair, but they must be seen to be fair, so that workers don't spend all their time guarding themselves against a perceived risk of injustice. 

The other points work similarly.  

There are also measures leadership can take which affect Quality directly.

• As we discussed last week (under "the paradox of empowerment"), no one can be an expert in everything. The more that leadership encourages employee empowerment at all levels, the more likely that problems can be addressed promptly by people with the right expertise.
• Empowerment also entails what W. Edwards Deming called, "Driving out fear." In an organization managed by respect rather than fear, employees will speak up about potential improvements, and will take initiative to implement them. But when you crowdsource the continual improvement process, you can expect more and faster improvements.
• As leadership introduces measurement against objective standards, employees become more willing to measure their own performance against clear definitions of high achievement—and therefore to aspire to higher performance in the future.
• ISO 9000:2015 even suggests that the organization can conduct surveys to assess how well employees are satisfied with their workplace, with the intention of communicating results openly and taking corrective action where needed. Readers may remember a discussion last year where I expressed doubt that such a question would really measure what it claims to measure. But if leadership can find genuine ways to assess engagement—even informal ones—that information has to be useful.  

Every organization has to engage its people at some level, simply to survive as an organization. But the more thoroughly and effectively you can engage with your people, the more they will feel both free and inspired to do a good job. And that's Quality.

__________

* See, e.g., Étienne de La Boétie, who points out in his Discourse on Voluntary Servitude, 1577, that even kings and governments rely on voluntary cooperation from subjects and citizens. 

** The character Nick Naylor, in "Thank You For Smoking," calls this "the yuppie Nuremberg defense." 

         

Know your stakeholders

Change can be hard. This is true for many reasons; but at an organizational level, one of the main reasons is that the people involved in or affected by a change may resist it. Maybe the change will be too hard for them to learn, maybe it deprives them of benefits they were getting under the old system, or maybe … well, they could have all sorts of reasons. But if a few of them dig in their heels, the whole job of implementing even a minor change becomes exponentially harder.

Of course this is why change management is a field, and why stakeholder engagement is one of the main topics in that field. Over the years, practitioners have discovered that some methods work better than others to win people over to your side when you are trying to implement a change. Today there are organizations, like the Change Management Institute, that focus on nothing else.

Yesterday I had the opportunity to attend a webinar sponsored by the Quality Management Division of ASQ, which introduced the CMI's Body of Knowledge (CMBoK™). The webinar was presented by Douglas Wood and Sandy Furterer, both of ASQ. Of course, in a single hour the presenters could touch on only a very few topics, but I found it useful all the same. And for those already looking ahead to next year, Wood and Furterer promised they will be back in 2025 to present an overall change management approach for middle managers. Stay tuned! (Yesterday's webinar was part of a series that began last month with "The Faces of Change Management.")

I want to talk today about a tool that Furterer described for evaluating your stakeholders and planning how to engage with them. Conceptually it is very simple; but that simplicity makes it useful and powerful, because it is so straightforward to apply.

The tool is just a table that lists all the stakeholders involved in a particular change initiative. It has six columns, as follows:

Stakeholder: List each stakeholder by role, not by name. Use the structure of the subject process to identify every single role that is affected in any way. List them all. 

Type: A role that is directly affected or impacted by the change—one that actually touches the process or system or technology—is primary. All others are secondary.

Primary role: What does this stakeholder do in this process? Why are they listed here?

Potential Impacts/Concerns: What does this stakeholder care about? What are their fears, or concerns, or issues? What matters to them? Note that sometimes when you do this analysis, you'll find that one of your roles has several unrelated concerns. Maybe you identified "Customers" as a stakeholder, but it turns out that domestic customers have very different concerns from customers abroad. If that happens, it's a sign that you need two rows. You have just learned that Domestic Customers and Foreign Customers are actually two different categories of stakeholder.

Initial Receptivity: What does this stakeholder think about this change today? Where are they now? Are they for it or against it? Furterer's example included three ratings: Strongly support, Moderately support, and Neutral. (I suppose that for completeness your table should also allow for Strongly opposed and Moderately opposed, although naturally we'd all like to avoid that case if possible.)    

Future Receptivity: Here is the critical planning question: Where do you need this stakeholder to be (with respect to this change), before your plans can go forward? Note that you don't necessarily need strong support from every stakeholder. It all depends on the details. Of course you hope to avoid strong opposition from anyone; but for some stakeholders it might be enough if they are neutral, so long as they do not actively interfere. For others, if you do not have their strong support you will get nowhere. So work out what target state you need to achieve in the mind of each stakeholder. 

Now look at the differences between your last two columns: Initial Receptivity and Future Receptivity. Those differences tell you where you have work to do, before you can launch your change initiative in earnest. Identify which stakeholders you have to win over, and how far you have to win them over. Then look at what they care about, in order to figure out how best to approach them.

For example, if one stakeholder is currently opposed to the change and all you need is for them to be neutral, you can focus on addressing their fears. Find out why they oppose the change, and then show them how those concerns have already been considered in the planning. You might not get their active enthusiasm; but if you can show them that their fears are ungrounded then you may move them from opposition to neutrality.*

If another stakeholder is neutral—or even opposed—and you need their support, you have a different job. This time you have to show them how they will positively benefit from the change you have in mind. Answer for them the basic question, "What's in it for me?" Presumably you already have a good answer: you wouldn't be doing this change if it weren't on balance a benefit for everyone. But make sure that your stakeholders understand what it is before you ask for their support.

It's a simple tool. But it shows you at a glance what your stakeholder strategy has to be.  

__________

* I assume that their concerns really have been addressed in the planning already! If you've made these plans without even thinking about their concerns, maybe it's time to go back to the drawing board. 😀