Pay your suppliers

A few weeks ago, Christopher Paris published an article about companies who don't pay their suppliers—or rather, strictly speaking, companies who make their suppliers wait four, five, or six months to get paid, even when the contract plainly requires payment in 15 days net. He describes having dealt with companies just like this, and I believe it.

Gothmog rejecting an invoice.

Back when I was first starting out, I worked indirectly with a company I'll call Gothmog Enterprises. (Don't even try to guess who they were in real life; my LinkedIn profile doesn't go back that far.) Gothmog Enterprises was a very large company. And there were persistent rumors that they preferentially did business with small, local suppliers who were desperate for the orders. Then when the invoice arrived—so the rumors used to claim—Gothmog Enterprises would pay 60% and stamp it "Payment in Full." This left the suppliers with a painful choice: continue to do business with Gothmog, knowing that they would only ever get 60 cents on the dollar; or cut them off, and be cut out of the massive volume of business that Gothmog made available. Of course it was a terrible choice for the suppliers, and for Gothmog to force it on them was unambiguously evil. 

Maybe it was only a rumor and never really happened.

"ISO 9001 would never let you
mistreat your suppliers!"

Now, Chris Paris sells consulting related to management systems, for example (but not only) those certified to ISO 9001 or AS9100. So it would be tempting to think he shouldn't have to deal with this kind of problem. You might even think to yourself, Surely a company with a functioning quality system wouldn't be allowed to play games like this with their suppliers! But this would be to look at the world through rose-colored glasses. Not sure you agree? Let's check.

ISO 9001:2026 covers all the requirements relating to suppliers in clause 8.4. (Property belonging to suppliers but stored at your workplace is covered in clause 8.5.3.) There is no prefatory material in clause 8.4, but just three subclauses.

• Clause 8.4.1 says that anything provided by a supplier and ultimately bound for your customers must conform to requirements, and must be put under a suitable control to ensure that it conforms.  
• Clause 8.4.2 says that you have to figure out what controls are appropriate, and whether to apply them to the things you buy, or to the suppliers themselves, or both.
• Clause 8.4.3 says you have to tell the supplier about all your requirements, and about all the controls you intend to apply.
• There's nothing about paying your bill afterwards.

And that's it! Oh, I suppose with this latest edition of the standard you could try to build an argument around clause 5.1.1(i), which says that top management is supposed to "promot[e] quality culture and ethical behavior." Maybe you could argue that letting your suppliers wait for months before they are paid is a funny kind of "ethical behavior." It would certainly be worth making the argument. But don't expect to win.

This might look like a gap in ISO 9001, but I'm not sure I agree. I'd rather call it a limitation of scope. ISO 9001 was never intended to describe ever single thing a company should do in order to qualify as praiseworthy or good. It is specifically a quality management system standard, which means that it should be focused strictly on customer satisfaction. If I can make my customers happy while being an unethical jerk to my suppliers, ... well, morally I still shouldn't do it; but as long as my customers don't know that I am an unethical jerk they won't care. In the short term, before my picture starts showing up on social media headlining lurid exposés of my crimes and misdeeeds, my customers will still be satisfied. And in that sense—for that short term—my orc-ish behavior towards my suppliers is out of scope for ISO 9001.

Where the treatment of suppliers does re-enter the larger Quality ecosystem is in the more general consideration of the seven Quality principles (spelled out in ISO 9000). One of these principles is Relationship management, which covers relationships with all interested parties. And in case it's not already obvious, suppliers are always interested parties. The point of the discussion of these principles in ISO 9000 is that even if yes, technically a company can get away with observing the letter of the ISO 9001 requirements while still being a scoundrel in other respects, in the long run it's not a sustainable strategy. Over time, suppliers will walk away from them, blacklist them, and refuse to do business with them—exactly the way that Chris Paris describes in the article I mentioned at the beginning of this post! Any company who wants to secure the ability to do business in the long term has to do more than narrowly follow the rules. 

Among other things, this means paying suppliers.  

           

Quality out in the open

Over the last couple of weeks I've written about a recent disagreement between me and the organizational hierarchy of ASQ (American Society for Quality), and about what that disagreement can tell us about organizational behavior generally. (See specifically this post and then this one.) The situation has not really improved—not yet, at any rate—and I'll get to that in a minute. But I want to stop first to talk about an important principle that this whole discussion has brought to light.

The principle is transparency. As much as possible, manage your business out in the open. When it comes to Quality in your products or services, manage that out in the open too. (Incidentally, I make this very point with respect to process management in an article I posted just five years ago.)

Obviously this doesn't mean telling your competitors all your trade secrets. It doesn't mean exposing any information that you are legally required to keep confidential. 

But transparency generates trust. If you are open and honest with your employees, or your customers, or the public, then they will be inclined to trust you because they can see that you aren't double-dealing.

By the same token, if you are sly or silent or secretive—if you hide things—you encourage people to distrust you. They will all think, What are you doing that is so bad that you have to hide it from me? And their imaginations will conjure up pictures far worse than anything you are really doing! So you'll do better to own up to whatever it is, rather than let them imagine something horrible.

Transparency and justice

I spent my high school years at the Webb School of California. Like all private schools, it had rules. The students were teenagers, so perhaps it is not surprising that some of them challenged those rules. Once in a while, a student was expelled. 

Stephen and Ann Longley
in the 1970s.

Ongoing disciplinary actions were always kept confidential, of course. But as soon as the boy had left campus, the Headmaster (Stephen Longley, back in those days) addressed the school. Keeping the story simple and trans­parent, he told us what the student had done, and that he had been asked to leave. He was clear and to the point, with no needless detail to muddy the picture.

The impact of this honesty and clarity was enormous. In the first place we all knew that we wouldn't be seeing Fred or Herman around campus any more, and we all knew why. But there was more than that. We knew that Fred or Herman had been removed for violating an objective rule, not because someone took a subjective dislike to him. We understood that if we did the same thing he had done, we would be expelled the same way he was. But we also understood that if we didn't break the rules, we were safe. The objectivity of the rules secured us. And the relentless clarity of the communication promised justice.   

Failure to communicate

Does that mean we should just let it all hang out? Not really, because that is rarely an effective way to communicate. (Note that Stephen Longley's announcements were very focused.)

This is the mistake I made in my most recent exchange with ASQ. In last week's article, I told you that some administrator deleted one of my posts from the myASQ discussion forum on August 6, and then it took them another six days to send me an email explaining why. By the time I got that email (August 12), I was so full-to-bursting with things I wanted to say that I dumped all of it into my reply the same day. But that just meant that my email back to the administrators was full of sound and fury. Perhaps it is not surprising that they set my account to a status where everything I post is automatically queued for moderation. (Most people can post directly with no delay.) I don't know if this status will expire one day, but it was still in place yesterday (August 19). 

What I meant to say ....

Naturally I don't like being on permanent-moderation status, but I recognize that it's partly my own fault for not communicating with ASQ more clearly. But what I meant to tell them was what I am saying here and now, about the virtue of transparency.

The whole disagreement started back when I wrote about some minor mistakes in the roll-out of an updated election procedure. Very bland stuff. Someone in the administration might have felt attacked by the criticism, and in any event asked that it be deleted. The person who wrote me suggested that I take up the issue privately inside the administration.

What I wanted to explain is this:

• If my login doesn't work, that's a personal problem.
• But if a general procedure doesn't work, it already affects everybody.
• That means that people are already talking about it.
• Once people are already talking about it—and they are, today—the only way to silence them is to make the whole thing very public. If you try to suppress the discussion, people will imagine horrible things, far worse than reality.

I failed to make these points because I buried them under a lot of useless bombastic noise. But I am convinced that they are true.

Robert Townsend on secrecy

One of the best management books I have ever read is Robert Townsend's Up the Organization. Find a copy and read it. Here's what he says about secrecy.

Secrecy is totally bad. It defeats the crusade for justice, which doesn't flourish in the dark.

Did you ever ask yourself why there's a private payroll? Or why all wages and salaries aren't posted on the bulletin board? According to the lore of the free-enterprise system money is really a scorecard. So why aren't the scores posted?*

Of course the company would have a revulsion (or a revolution) if everybody had to look squarely at a list showing the salaries of the president and his nephew, who are paid four times what they're worth, and the salaries of Izzy, Derek, and Susie, who are making a third of what they're worth.

In the case of most marketing or new product planning, secrecy is sinister. It defeats your loyal opposition and protects you from your best friends when you need them most. Secrecy implies either:

1. What I'm doing is so horrible I don't dare tell you.
   or
2. I don't trust you (any more).

__________

* I'm not suggesting that you should post salaries. For one thing, it would over-emphasize the importance of money. But you shouldn't tolerate a situation in which you're ashamed to post them. Like you are. 

           

Can you report bad news?

Quality professionals have to report bad news. It's part of the job.

That's why many organizations make Quality report directly to the CEO or General Manager, instead of tucking the department under Operations or Engineering. It's not that Quality's headcount or budget are so large that they have to be managed at that level. The idea is that Quality has to report the true state of things, without the risk that someone will hide the news.

"The widgets coming off Line 2 are defective, and if we ship them we risk a $2-million recall in the next six months."

"The prototype Mark IV Fantabulator still fails five of its fouteen critical tests and leaks radiation all over the user."

"The packaging machine in Logistics is out of alignment again, even though they just fixed it last week."

These are things the organization needs to know, even though they might embarrass someone. And it is Quality's job to speak up.

Or is it?

Last week I wrote about some hiccups recently as ASQ rolled out an updated procedure for electing officers in the geographical Sections. On the whole it wasn't a dramatic topic. Then after I posted the article here, I wrote a notification to post in myASQ, which is ASQ's in-house social media platform. I started with a brief and—I hoped—non-threatening introduction:

Was anybody else as confused as I was by the roll-out of the new procedure for electing Section officers? We heard that there were changes coming, but my Section (at least) didn't get specific information until we had already missed some deadlines. I don't know if anyone else had the same experience. But is there a chance that the organization could do a Lessons Learned analysis on this roll-out, in order to make future ones go better?

I talk about it in a little more detail here:....

Then I gave a link to last week's article. In other words, I tried to keep it as bland and professional as I could, in the hopes of starting some kind of discussion about what went on.

Within fifteen minutes, an administrator deleted my post.

I post a lot on myASQ, and this is the second time I've had a post deleted. The first time was just about a year ago, when I posted an article critical of the Board of Directors. That time, the removed post was a link to this article here; and I discussed its removal very briefly in this one here. In a nutshell, last year's post was taken down ostensibly for violating the myASQ Terms of Service; but in fact it didn't violate the Terms of Service that were current when I posted it. Those Terms were updated 24 hours later, specifically to forbid any discussion of the things I was talking about.*

This time around? I got an email yesterday from ASQ HQ, six days after the post went down, with a partial explanation. The heart of it is a reminder that myASQ is the wrong forum for complaints about procedures that aren't working. The email suggested that I contact this office or that officer instead.

Public or private?

In principle it makes sense to specify that this channel is only for this kind of communication, but in this case I wonder. If I contact an office or an officer, the ensuing discussion will be private. But when the topic is a failed procedure—and a procedure that affects many people—I think the communication really has to be public.

The point is that people are already discussing the issue. When I asked, "Was anybody else as confused as I was?" it was a rhetorical question. I'd already talked to people in other Sections who had the exact same experiences and the exact same questions. So in a sense I was asking my questions on their behalf as well. In my reply to the email from HQ, I tried to make the point that a lot of people in the Society are already whispering in the corners about this very topic. If ASQ came out and addressed it publicly, they would silence a lot of whispering. And they would give members a renewed confidence in ASQ as an organization. It would be a win all the way around.

Of course—I tried to reassure the officer who wrote to me—discussing the issue publicly never means naming names! No one expects the Society to say "It's all the fault of John Jones and Fred Smith." But it is always possible to say "A Member misunderstood the procedure and therefore did X; then an Administrator followed up using the wrong template and did Y. We are currently investigating how to error-proof the process so that it is impossible to make those mistakes again." And, as I say, it would boost confidence to do so.

I don't know if I was persuasive or not. I guess we'll see.

Where do we report bad news?

Ultimately that's the important question: Where do we report bad news?

• We have to report it somewhere, because that's what we Quality professionals do.
• ASQ has urged us for years to channel all our communications into myASQ, so my first guess is that that's where we should report administrative failures like this one. 
• On the other hand, if myASQ is the wrong place to report bad news, then that's fine too—so long as we know what channel to use instead. And for practical reasons, it should be a more-or-less public channel, one that other people can consult. Is there another channel inside ASQ with these features? Or how about LinkedIn? Facebook? The New York Times? 

I'm ready to use any of them, so just let me know. 

__________

* Yes, I downloaded copies of the Terms of Service document—with date stamps—before and after, just to be sure.

           

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!  

           

The fight to define Quality

Five years ago, in one of my first posts for this blog, I argued that all the definitions of Quality that have been proposed in the literature mean effectively the same thing. Whether you talk about "conformance to requirements," or "fitness for use," or "excellence in goods and services," I argued that fundamentally you are talking about getting what you want out of those goods or services. So I proposed the umbrella-definition, "Quality means getting what you want."¹ And at a workaday level, I still think that's fair. 

But it turns out there were reasons behind the fight over a definition, reasons besides academic posturing. Robert Cole explains in his Managing Quality Fads (a book that I discussed two weeks ago) that American businesses saw a profound shift during the late 1970's and early 1980's in the understanding of Quality, and the different definitions served as banners or rallying cries for the contending models. So while they may all mean (more or less) the same thing today, they meant very different things in the past. Thus it can be useful to understand what these definitions meant at the time, and what the parties were fighting over.

Old model

Because we know how things turned out in the end, some commentators have blamed American managers for failing to adopt Japanese Quality methods faster than they did.² But Cole explains clearly that such a view is profoundly unhistorical. It is simply not true to allege that American managers were stupid (most of them clearly were not) or that they were ignorant about Quality. What is true is that they understood a great deal about Quality according to a framework that Cole calls "the old model"—but this framework proved unsuccessful in head-to-head competition with the "new model" practiced by many Japanese companies. So before they could learn the new model, they had to carry out two preliminary tasks first: they had to understand that there are more than one way to think about Quality; and then they had to unlearn much of what they already knew.³ 

What was this "old model"? It was a way of thinking about manufacturing processes that had been responsible for a string of remarkable successes, starting with the industrialization of the American economy, and culminating—within the living memory of many managers still working in the 1970's and 1980's—with unconditional victory in World War Two as the "arsenal of democracy." And the basic principles behind the model are plausible:

• 

  Cole's table of "quality-hostile
  assumptions"⁴ (Click to enlarge.)

  Economic success comes from the division of labor, where everyone can focus on doing his own work as well as possible. This means that engineers should design products, managers should make decisions, and workers should do what they are told. Anything else means inefficiency and poor performance.
• For most jobs, there's pretty much just one way to do them. Once you've figured out what that procedure is, and have implemented it, there's nothing more to do. Once a procedure is defined and in place, the only way to make it less expensive is to pay your workers less. (If your workers are unionized, that means moving overseas to a cheaper country.)⁵
• These two facts—the division of labor, and the one-and-only way to do most jobs—mean that once an engineer has finished creating a design, most of the important decisions have already been made. At that point, the only degree of variability remaining is in how strictly the design is implemented, and in how carefully the procedure is followed. Stick to the design, and you'll have a good product; deviate, and you won't.
• Products have to be "good enough," which means there is a "quality floor" beneath which they must not be allowed to sink. But no customer is going to pay for a gold-plated shovel, so it is foolish to throw money after a chimerical quest for perfection.⁶
• We know what customers want. We've seen time and again that they want products they don't already have. So if we make the products—and history shows that we are fantastically productive at making things!—customers will buy them.  

There's more, of course. And I have included a summary of what Cole calls "quality-hostile assumptions" in the inset picture above. But it is important to understand that these assumptions were not stupid! In the event, they were indeed overturned by the new model of Quality. But each of the principles I listed has a superficial plausibility to it. And the overall model had been so successful in recent history that it looked like madness to question it.⁷ 

New model

The new model of Quality reversed many of the assumptions of the old model. In some ways this is unsurprising, because it grew out of a historical situation that was nearly the opposite of the confident, successful American experience. Japan, after all, lost the Second World War, and her industrial plant had been largely reduced to rubble by American bombers. Japanese management responded to this catastrophe by mobilizing all Japanese—and in particular all employees—to support a collective effort to rebuild and regrow. In the face of a national calamity, everyone was asked to contribute, in any way they could.⁸ 

Cole's table comparing the
old and new quality models.¹³
(Click to enlarge.)

But if everyone is asked to contribute, there is no room for a narrow-minded adherence to the division of labor. Naturally the engineer knows a very great deal about how to design a product; but he may not know everything about the particular set of machines and tools that we have to do the job here and now. Teams on the factory floor therefore help improve both the design implementation and the manufacturing processes.⁹

Early consequences are that industrial processes are never permanently fixed. They are always subject to improvement.¹⁰ Also, individual employees are not locked into a single role forever: all employees are assumed to be learners and potential problem-solvers.¹¹ 

And then feedback effects begin to appear. Improved methods mean less rework. But less rework means less cost, so high-quality manufacturing processes can be cheaper than low-quality ones—in direct contradiction to the expectations of the old model.¹²

The old model argued that continual improvement would run aground on the law of diminishing returns: it would take ever more cost and effort to make ever smaller improvements in anything. But the new model understood that there are always many targets for improvement. You can make this aspect of the job a little better, and then turn around to improve a different one. Briefly, you can make improvement continual by regularly picking new things to improve.¹⁴ 

What's more, it turns out that customers are willing to pay more for products that work better and last longer! So an emphasis on superior product quality entails greater market share as well as lower costs. In other words, increased product quality drives improved corporate profitability. And an overall focus on customer satisfaction provides an effective framework to organize all these other efforts.¹⁵   

What about the definitions?

With this background, it is easier to see the competing definitions of Quality as slogans or ideological commitments to one model or the other.

The most obvious of these is Philip Crosby's definition: Quality is conformance to requirements.¹⁶ This definition is foundational to the old model. Remember, in that model the engineer designs the product and makes all the important decisions; once the design is complete, the best outcome is produced by conforming exactly to the design and the process ... in other words, to the requirements. Nothing more is needed in order to achieve Quality, and nothing more is wanted.

ISO 9000:2015 agrees with Crosby, in definition 3.6.2: "degree to which a set of inherent characteristics (3.10.1) of an object (3.6.1) fulfils requirements (3.6.4)."

The other pole is represented by Joseph Juran's definition: Quality is fitness for use. "Use" is what the customer does with the product or service, and "fitness" just means that it works. So Juran's definition means, in effect, that Quality is whatever the customer says it is. This is an extreme statement of the new model that Quality depends on customer satisfaction.

W. Edwards Deming and the American Society for Quality try to bridge the gap between the models. Deming calls out both sides by saying, "Good quality means a predictable degree of uniformity and depend­abil­ity [old model] with a quality standard suited to the customer [new model]." The ASQ, for their part, define that, "Quality denotes an excellence in goods and services, especially to the degree they conform to requirements [old model] and satisfy customers [new model]."

In any event, the battles are over. For the time being, the new model of Quality has won the day. So we can afford the magnanimous conviction that everyone who talks about Quality probably means more or less the same thing. But I think it can be valuable to understand how we got where we are.

Gosh, in all this discussion I never explained my own position. In case it's not obvious from everything else I have written here for the last five years, I throw my support firmly behind the new model. There have been too many cases where a company or an organization worked out a detailed plan, executed it flawlessly, and the results were just no good for anyone. (*cough* Edsel! *cough*) So I think that Quality ultimately has to mean goodness—and that for something to be good, it must (among other things) be good for someone in particular.¹⁷ Therefore I take the side of the customer in this debate between models.

At a theoretical level, I'm fond of the simplicity of the "innocuous truism" formulated by Robert Pirsig: "Quality is what you like."¹⁸ You can probably see the influence of Pirsig in my own definition at the top of this essay.

__________

¹ More exactly, I went on to explain, "Whether you are talking with your manager or your auditor or a technician on the line, if there's a question about the relevance of this or that element of the system just ask, 'Are we getting what we want? Do we need this element in order to make sure we continue to get what we want?' If yes, the element belongs in your QMS .... If no, not." 

² See, for example, this famous satirical pseudo-advertisement. 

³ In fact, Cole argues statistically that workers with deep backgrounds in traditional quality control functions were mostly passed over when companies began to create Vice President of Quality positions in the 1980's and 1990's. It was easier for their companies to "learn" new methods by promoting new men than it was for the employees themselves. "[The] overwhelming majority of the 174 vice presidents for quality did not have a career in quality prior to assuming their vice presidential role.... [Of] the Fortune 500 quality leaders surveyed, only 9% had quality responsibilities in their third previous job." Robert E. Cole, Managing Quality Fads: How American Business Learned to Play the Quality Game (New York, Oxford: Oxfor University Press, 1999), p. 44. 

⁴ Ibid., p. 76.

⁵ Ibid., p. 50.

⁶ Ibid., p. 47.

⁷ Ibid., p. 48.

⁸ "Various authors have noted that Japanese companies tend to magnify even small challenges as a strategy to mobilize all employees on behalf of aggressive new corporatewide goals .... [One] can suggest that large growth-oriented Japanese manufacturing firms throughout most of the post-World War II period have been characterized by a weakness orientation, which is designed to reveal problems in current performance to a broad range of employees. By contrast, comparable American firms throughout much of the postwar period were characterized more by a strength orientation." Ibid., p. 55. 

⁹ Ibid., p. 30. 

¹⁰ Ibid., p. 31.

¹¹ Ibid., p. 30.

¹² Ibid.

¹³ Ibid., p. 26.

¹⁴ Ibid., pp. 77-78.

¹⁵ Ibid., pp. 29-30.

¹⁶ References for this and the following definitions are given in this blog post. 

¹⁷ Cf., for example, William Blake, Jerusalem, plate 55, lines 60-63: "He who would do good to another, must do it in Minute Particulars, | General Good is the plea of the scoundrel, hypocrite, & flatterer: | For Art & Science cannot exist but in minutely organised Particulars, | And not in generalising Demonstrations of the Rational Power."

¹⁸ Robert Pirsig, Zen and the Art of Motorcycle Maintenance: An Inquiry into Values (New York: William Morrow & Co., 1974, 1999), p. 232.       

      

The risk is always there

Last Wednesday—a week ago yesterday—I read two stories that had nothing to do with each other, except they somehow breathed the same air. In a funny but uncanny way they echoed each other.

Amazon lays off 16,000 employees

One story was widely reported. On that day, Amazon laid off 16,000 workers ... and notified them by accident. You can find the basic story multiple places around the Internet—for example, here. Discussion on LinkedIn (for example here and here) fleshed out some of the details. In principle it is no surprise these days when a tech giant announces layoffs. What was surprising in this case was precisely that Amazon failed to announce them! The layoffs just kind of happened all by themselves, or so it seemed, and then were referenced off-handedly in other, subsequent emails. Finally there was an official announcement (you can read it here), but only after the damage had been done.  Amazon employees shared their experience on Reddit. [Quotes are mostly as-is, and not edited for grammar or spelling.]

I work in SLU. I went to check on my baby at 2am and got and email at 230 that I've been let go. What a great day.... 

i got a txt saying check your personal email before coming to work; work email was disabled. so yeah, break up over txt. 

I didn't know until I got to Blackfoot at 0530 this morning, and my badge didn't work. Tried to slack my boss, and no slack access. Went to email, no email access. After being escorted out of the lobby, got the email in my personal account that my position was eliminated.

Dam I’m at Blackfoot and had to pack up my coworkers stuff.

Again, what's remarkable about this story is not that thousands of people were laid off, but that the communications were handled so ineptly.

Dorx Communications shuts off one account

The second story was a lot smaller. A blogger I follow was moving from Rhode Island to Maryland, and tried to cancel the Internet service at his old lodgings. John Michael Greer tells the story as follows:

In the process of getting all my Rhode Island utilities shut down and all my Maryland ones switched on, I contacted my former [Internet] provider―to keep the lawyers at bay, let’s call the firm Dorx Communi­cations, shall we? You can get almost any other imaginable service from the Dorx website with a few clicks, but shutting off service is a different matter entirely. You have to go to chat, put up with the maunderings of their clueless robot, and get trans­ferred to a supposedly live agent, who then does everything possible to keep you from doing what you’ve come there to do. I slogged patiently through the process, and finally got the allegedly live person to agree that my service would be shut off on January 30.

The moment the chat ended, my phone and internet access shut down. When I walked three blocks to the local public library to get online and contacted Dorx to inform them politely that they’d made a mistake, I found that my shutoff order had been redated to that day, January 18. What’s more, once I was in my account, I was unable to access the chat function at all. It was a pretty obvious middle finger from the dorks at Dorx.

What do these stories have in common?

Both stories involve companies doing something unpleasant. In each case, the company behaves in ways that look to be at best careless and callous; and in each case it is easy to slide from that (admittedly generous) perspective towards one that evaluates the company's actions as "a pretty obvious middle finger." But I have to disagree with Greer. When he reads Dorx's behavior as hostile, he is forgetting an important principle that the Internet calls Hanlon's Razor.

"Never attribute to malice that which is adequately explained by stupidity."

Stupidity is always a risk. It is especially a risk in the actions of corporations, and even more especially in the actions of large corporations. 

But why?

At the most basic level, stupidity is always a risk because we are all human beings, and human beings make mistakes. That's why there is such a discipline as Quality in the first place—to protect against the inevitability of human failure.

Stupidity is a risk in the actions of corporations because many of the "actions" that corporations take aren't based on the decision of any single individual. Multiple people have to work together, often through business processes, and nobody sees the whole picture. Outcomes are the result of the processes themselves rather than of a concrete decision. And if a process is not very well-designed, it can misfire. This is why John Seddon says that his first step working with a new client is to send top management to the front office to watch a single order come in, and then to track that order through its life-cycle. Invariably they learn that the company's systems actually work very differently from how they are supposed to work! (I discuss the point at greater length in this post here.)

And stupidity is especially a risk in the actions of large corporations because those organizations have disporportionately many employees on the inside, where their only contact is with other employees and they are insulated from customers. This means that they are (overall) more likely to trust their business processes than the employees of small companies, because they have fewer opportunities for disconfirmation or falsification.* If unhappy customers can walk into your store and disrupt your day, you are more likely** to take care to keep them happy regardless what the process tells you to do.

Constant vigilance

Of course, at some level everyone knows all this. As noted, the only reason we have a Quality discipline in the first place is that everyone knows people are fallible. But it is important to understand that the most any Quality system can ever do is to help. No system can ever eliminate the risk of human stupidity.

And even the best system can grow flabby and ineffective over time. In earlier posts, I have cited Amazon as a company that strove to avoid bureaucratization. Back in November 2019, Franklin Foer wrote in The Atlantic that "In contrast to the dysfunction and cynicism that define the times, Amazon is the embodiment of competence, the rare institution that routinely works."*** And yet here was Amazon, just one week ago, laying off 16,000 employees without remembering to let them know! 

"The embodiment of competence"? Well, times change. (For other examples, search this blog site for "Boeing.")

Ultimately the only way to avoid stupid mistakes is through constant vigilance. Quality systems can help. Caring about your work makes a huge difference. Paying attention, following through ... all these things are pretty basic. But they are also frighteningly easy to lose track of.

Constant vigilance.   

_____

* In the sense made famous by Sir Karl Popper. See also, for example, this discussion of bureaucracy, which highlights the connection to size.  

** Of course this is no guarantee. Small companies fail too. 

*** Franklin Foer, "Jeff Bezos's Master Plan," The Atlantic, November 2019, p. 58.      

      

The placebo effect in Quality

I have long argued that Quality means getting what you want. But people want all kinds of things. And sometimes a person's "wants" don't make a lot of sense. Are all these things still Quality?

• 
  A friend of mine recently overheard a conversation in a grocery store. A customer was buying baking soda. She couldn't find the expensive commercial brand she wanted, so she reluctantly settled for the cheaper commercial brand instead. She flatly refused to buy the store brand. But baking soda is a pure chemical—sodium bicarbonate, or NaHCO₃. It's the same chemical, regardless of the packaging.
• Years ago, when my dad was a boy, the local grocer in his town told him a story. This man sold coffee, which he ordered in huge sacks and then poured into little paper bags sealed with tape for retail sale. The bags came in two sizes: 8 ounces (sealed with green tape) and 12 ounces (sealed with blue tape). But then he priced the smaller bags so that they cost more than the larger bags. It was the same coffee, and he never claimed they were different! But some customers always bought blue, and others always bought green. Once a customer who always bought green let him know that the shelf was empty. He told her, "Well, I get my next shipment tomorrow. But in the meantime I do still have some of the blue coffee, if you would like to try it." She answered, "No, I tried that once and it just doesn't compare. I guess I'll come back tomorrow, when you've got your shipment in." 
• 
  For years, IBM repairmen famously wore suits with white shirts and ties, and they carried their tools in attaché cases. John Molloy tells the story* that this uniform was established when computers were still large and expensive, and had not been widely adopted. The stereotype among companies that were just starting to buy computers was that they were unreliable and always breaking down. So IBM dressed their repairmen to look absolutely reliable, to persuade customers that the computers themselves were just as good. 

What do these stories tell us? They tell us that customer perceptions of Quality can be influenced by factors other than the objective content of the product or service itself. Presentation, expectation, packaging, and even price—all these contribute to the customer experience, and therefore to the customer's ultimate judgement (positive or negative) about the product or service.

So does that mean that we can stop worrying about making our products any good? Can we sell defective products and still call them "Quality" so long as the packaging is shiny enough?

No, of course not. If you sell defective products that break as soon as they're out of the box, your customers will catch on quickly enough. Then they'll tell their friends, and your reputation will be in tatters. Understanding the placebo effect is no excuse for sloppy workmanship.

What it does mean is that you can't stop with the product itself. Precisely because customers evaluate the presentation and packaging and the rest as part of their total experience, you have to take care with those things too, so that the total customer experience is as good as possible. 

• If you are selling a product, make it easy to use and attractive to look at. 
• If you are selling a service, make it transparent to the customer. 
• Either way, make sure your advertising sets accurate expectations so that the customer isn't surprised later. 
• Since you are selling the sizzle as well as the steak, ensure that the sizzle is appetizing even while you also ensure that the steak is nutritious.

When you take as many pains with the presentation as you do with the content, you signal to your customer right away that she is in good hands. You encourage her peace of mind. And peace of mind, as Robert Pirsig points out, is the heart of Quality.

"Peace of mind isn't at all superficial .... It's the whole thing. That which produces it is good [work]; that which disturbs it is poor [work].... The ultimate test's always your own serenity."**  

__________

* I read this years ago and have lost the reference. So it is possible that I may misremember details of the story, since I can't check it. But I believe it is true in broad outline.  

** Robert Pirsig, Zen and the Art of Motorcycle Maintenance (New York: William Morrow & Company, 1974, 1999), p. 165.    

       

In praise of roundabouts

The first time I ever noticed roundabouts, I was on vacation in the UK. This was many years ago, but they seemed to be everywhere. At first I thought it was just one more peculiar feature of local transportation, along with narrow roads, streets that changed their name with each new block, and driving on the left. In fact, I didn't realize how much they improved the flow of traffic until I found myself immobilized in a column of cars for what seemed a very long time, only to realize we were all stopped for a traffic light.

That afternoon I saw why roundabouts were so common in the UK, and I began to wonder why they aren't just as common everywhere else. Of course rebuilding an existing intersection is time-consuming and expensive. But the statistics comparing roundabouts to traditional intersections are remarkable.

• The Federal Highway Administration estimates that replacing a traditional intersection with a roundabout reduces the number of fatal and injury crashes by about 80%. (That's 82% for a two-way stop-controlled intersection, and 78% for a signal-controlled intersection.)*
• When collisions do occur, they are generally side-to-side collisions from merging or changing lanes, rather than head-on or right-angle collisions. On the whole, side-to-side collisions are less damaging and less often lethal than the other kind.
• Not only are they safer for cars, but roundabouts have 10-40% fewer pedestrian or bicycle crashes than traditional intersections.
• Since cars typically don't have to wait as long at roundabouts as at traditional intersections, they contribute to reducing air pollution from idling engines.    

And all these benefits stem from one root cause: Roundabouts are far simpler than traditional intersections. In this context, simplicity is measured by counting "conflict points." These are points in the intersection where a collision can be foreseen. A traditional intersection of two roads, each supporting two-way traffic and crossing at right angles, has 32 conflict points. If those same two roads meet in a roundabout, the number of conflict points drops to eight. No wonder the roundabout is safer!

Why am I writing about traffic this week? There's no special reason, except that it illustrates in a dramatic way another important Quality principle: when other things are equal, simplicity is better than complexity. In other words, if you have two solutions to a problem and they both solve it equally well, choose the simpler one. The complex tool has more parts; the complex procedure has more steps; the complex intersection has more conflict points. In all events, this means that the complex solution has more ways to go wrong: more parts that can break, more steps that can be mis-executed, more collisions that can happen. From the perspective of risk management, the complex solution is always—again, other things being equal—more fragile and more at risk of failure.

Years ago, a colleague at work was telling me about the cup holders in his cars. He owned two cars, and the cup holders were very different. One car had a sleek and elegant design. The cup holder was tucked discreetly out of sight until you pushed a button; then a little motor gently unfolded it for you. But at the time we talked, a tiny part had broken in the motor, so it had stopped working. He had contacted the dealership, but it would be several weeks before they could get the piece in stock.

The other car wasn't nearly so elegant. But it had a piece of plastic in arm's reach, molded to hold a cup. The overall look wasn't nearly as sleek and beautiful as the first car, but there was nothing that could break. From the perspective of customer satisfaction, the simpler solution clearly had the higher Quality. And it's often like that.

__________

* You can find more detailed numbers, for example, here.    

Quality in the checkout line

Writing this column once a week, I find myself looking for Quality aspects in many of the things I do each day. From one perspective, this makes sense: I have argued, after all, that Quality isn't really a set of rules or procedures (though it uses both those things), but rather is an awareness of what it takes here and now to do this task correctly. If that's the case, then Quality might just be applicable to anything you do.

Anything? Pretty close. 

The other evening I went out to get groceries. Everything was fine until I got home, when I found that they had failed to scan a dozen eggs and a package of butter. In effect, they undercharged me by $9.98. It was too late to go back that night, but I went back the next morning to tell them about the mistake and to make up the difference. They thanked me for letting them know, and said they would update their inventory; other than that, they sent me on my way. "Call it our gift to you." 

What does this story have to do with Quality? I see two principles that it is important to remember.

Don't disrupt a working process

Why did the mistake happen in the first place? The checker was in the middle of scanning my groceries when a second checker came up and offered to help. I think the second checker moved things in the cart; then the first checker concluded that if the eggs and butter were here instead of there, they must have already been scanned. It's a simple mistake to make, but the point is important: if somebody is in the middle of a procedure and it's working for them, don't interrupt without making very sure of what you are doing. It's easy to throw them off their count, or mix up their stacks, and then the procedure might be ruined. 

Of course if you are using formal, written procedures and interacting with machines that require fixed inputs, it's harder to get mixed up that way. But often you aren't, especially in small or medium-sized enterprises, or in service functions (as distinct from manufacturing). 

Keep corrective actions proportional to the problem

When I went back the next day, the store thanked me for my report but didn't take my money. Of course I appreciated their kindness, but they aren't in business to be kind. How can they afford this?

The answer is that it doesn't happen often, so they had no procedure or mechanism to make the correction. What's more, any method they tried to improvise to allow them to take my money would have cost them more than $9.98 to implement. It was—quite literally—not worth it to them to correct this particular shortfall.

Sometimes that happens, and it's good to recognize when it does. Focus your work where it matters.

So yes, there are Quality aspects even to a simple mistake in the checkout line. The awareness of the task—including awareness of what might go wrong, how to avoid it, and when not to bother—is always the most important part.