When "Good Enough" Isn't Good Enough: Chapter One

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CHAPTER ONE: BEGINNINGS

from
When "Good Enough" Isn't Good Enough,
Core Ideas of Total Quality

© by Ends of the Earth Learning Group 1998

by
Linda Turner and Ron Turner

TABLE OF CONTENTS

Chapter One Chapter Two Chapter Three Chapter Four Chapter Five Chapter Six Chapter Seven References and Copying Rights

Bureaucracies, like lawyers, are an easy target for comic strips and sociologists.

Letter from six year old Calvin to Santa Claus: "Dear Santa, why is your operation located at the North Pole? I'm guessing cheap elf labor, lower environmental standards, and tax breaks. Is this really the example you want to set for impressionable kids?" [Homicidal Psycho Jungle Cat, A Calvin and Hobbes Collection by Bill Waterson, page 26.]

Calvin and Hobbes is a funny comic strip because we all know there is a ring of truth to it.

Parkinson's Law: "Work expands to fill the time available for its completion." In other words, organizations will waste time and not even know they are doing so.

The Peter Principle: "Bureaucrats will be promoted to their level of incompetence." How dismal. That means leaders get promoted as long as they do a good job, and stop getting promoted once they reach a position in which they are incompetent.

Combine all the above and we have: "Bosses will fill their time with useless tasks, and then cut pay to workers in order to remain competitive."

We can do worse. Max Weber was the first sociologist to closely examine modern organizations. Weber's thoughts can be paraphrased as: "Organizations in the name of equity will depersonalize people and start treating them like numbers." More significantly: "Organizations will forget why they were created and become concerned only with organizational survival."

BUREAUCRACIES HAVE FORGOTTEN WHY THEY WERE CREATED
Does that sound too critical? How do we explain hospitals whose first question is: "How are you going to pay for this?" Or car companies willing to build cars like the Pinto with its exploding gas tanks because the expected dollar losses from lawsuits were less than the cost of moving the gas tanks? Or endless lines at schools that have students wait and wait and wait in order to register for classes, sign up for financial aid, and pay bills.

We are a society in which big business, big government, and big unions all share one essential trait: they seem to have lost sight of the people they supposedly serve.

Total Quality Management (TQM) is a rebellion against the modern bureaucracy. This rebellion, on the surface, appears quite simple and straight-forward: empower the work force and start treating people decently, use teams for decision making instead of relying on "Lone Ranger" supervisors, have patience and start thinking long term, form partnerships with unions and suppliers, and give customers meaningful guarantees about quality of product. These "strategies" sound like they are ends in themselves and in fact were advocated by many schools of thought well before TQM came along.

A PARADIGM SHIFT CHANGES THE APPROACH PEOPLE TAKE TO SOLVING PROBLEMS.
Total Quality approaches are, however, much more complex than these simple strategies. TQM is a paradigm shift that requires managers, workers, customers, and union leaders to see the world through a very different set of "lenses." These "lenses" focus on four core ideas. It is these four ideas which make TQM unique from other schools of management.

The following four ideas will be discussed at length in this book along with their practical implications in the work place.

IDEA #1: "Commitment to Continuous Improvement"

Continuous improvement replaces a "good enough/not good enough" attitude which asserts that improvement is necessary only when results fall below some threshold. The commitment to continuous improvement leads to creation of a "learning environment" in place of a "control environment."

IDEA #2: "Adoption of a Customer Focus"

A customer focus replaces a "profit focus" which puts customer satisfaction second. A customer focus ultimately means that "pleasing the customer" will be more important than "pleasing the boss."

IDEA #3: "Systems Thinking"

Systems thinking views an organization as an interdependent whole. System thinking changes incentive structures and basic organizational roles and relationships because it views people as being connected to each other rather than as working in isolation from one another.

IDEA #4: "Understanding Variation"

Of the four ideas, this is the most difficult to grasp. When errors spike, most of us automatically ask, "Who or what is to blame? Something must have changed to cause these results."

All work processes, though, have a certain amount of normal variation which leads to error spikes that at times can be quite profound. If we don't take into account this normal variation, then we will inevitably blame people and machines for results that were not their fault. The first question in root cause analysis should be: "Is this normal variation or do the results indicate something special is going on?" Understanding variation will fundamentally alter how we approach problems.

Historically, TQM has its roots in the writings of Walter Shewhart who developed Statistical Process Control (SPC) back in the 1930s. SPC was significant because it provided a simple statistical tool for identifying when error spikes exceeded what should be expected from normal variation.

MOST ERROR SPIKES ARE DUE TO NORMAL VARIATION. THEREFORE THE FOCUS SHOULD BE ON SYSTEM REDESIGN RATHER THAN ON FINDING "WHO IS AT FAULT?"
Shewhart discovered that 85% to 90% of all errors are due to normal variation and not to any single "special" cause. Managers will get a much bigger bang for the buck by focusing on redesign of systems in order to reduce normal variation rather than continually looking for something that is broken.

Following Shewhart's lead, three thinkers, W. Edwards Deming, Joseph Juran, and Armand Feigenbaum went on to develop a comprehensive set of management recommendations that focused on a "total" approach to quality that moved responsibility for improving quality from the inspectors in Quality Control Departments to "everyone" in the organization. They insisted that top management must change its focus away from maximizing production numbers and instead start focusing on maximizing quality.

Deming and Juran worked extensively in Japan following World War II. Both Deming and Juran were eventually given Japan's Second Order of the Sacred Treasure, which is the premier award that can be given by the Emperor. Deming also had Japan's highest quality award named after him.

Kaoru Ishikawa was a generation younger than Deming, Juran, and Feigenbaum. Ishikawa took their ideas and developed strategies for implementation. He was a key figure behind the development of quality circles, statistical tools like "Cause-and-Effect Diagrams", and creation of Japan's Deming Prize as a resource for encouraging and assisting adoption of Total Quality principles by Japanese organizations. The Malcolm Baldrige National Quality Award is the American version of the Deming Prize and was modeled on many of Ishikawa's ideas.

Phil Crosby is the last of the "big" names in TQM. Crosby was a contemporary of Ishikawa. He was not known for developing new tools and techniques, but rather for popularizing the ideas of the Quality Movement. His executive training school in Florida has provided the first intensive exposure to Total Quality Management for thousands of American executives.

SUCCESS CAN MAKE PEOPLE CLOSED-MINDED.
Total Quality Management was not popular as a concept in the United States until the 1980s when American corporations suddenly found themselves in a losing battle with the Japanese. When American corporate leaders visited Japan in order to determine what the Japanese were doing differently, the Japanese recommended that the Americans go talk to Deming, Juran, and Feigenbaum.

Deming was in his eighties by the time most American corporations started talking to him. He had been preaching the same basic message for over thirty years. When asked why it took so long for American corporations to respond to him, Deming put the blame on American arrogance. He asserted that following World War II, U.S. management was blinded by its financial success and failed to see that its success was due to the devastation of U.S. competitors and not American managerial acumen.

The Japanese were open to new ideas following World War II ,whereas, at the time, Americans managers were not. They didn't become open until they started to suffer losses during the competitive struggles of the 1980s.

During the Reagan Administration, the Malcolm Baldrige National Quality Award was created in order to encourage more organizations to start adopting a Total Quality approach. Many states have created their own "baby" versions of the Baldrige Award as well. In the 1990s, TQM is being encouraged in health care, government, the service sector, and education, as well as, in manufacturing. In a rare display of bi-partisanship, both Democrats and Republicans today advocate a TQM approach by the Federal Government.

Occasionally the argument is made that Total Quality Management is nothing more than "common sense." This argument points out correctly that many TQM values such as empowerment, use of teams, treating the workforce with respect, etc. are neither new nor revolutionary. These ideas, so the argument goes, simply tend to be ideas that have been ignored in the past, and once again are being resurrected.

TQM IS A FRONTAL ATTACK ON "COMMON SENSE."
It is of course reassuring to hear that something is simply "common sense." Since all of us claim to have more inherent common sense than our neighbors, that would seem to put each of us one leg up on everyone else. Unfortunately, when it comes to TQM, the statement isn't true. In fact, TQM is a frontal attack on the common sense that most of us have spent a lifetime "mislearning." TQM requires that we give up many cherished notions.

Dr. Charles Burger put it this way when explaining to his staff why they would all have to get 45 hours in training over basic TQM concepts: "I don't want to empower people to make the same stupid mistakes I've been making in the past." Dr. Burger realized one of the more profound implications of TQM: the strategies will be meaningless without first giving up some of our "common sense" notions of the world, and fundamentally changing the way we approach things.

THREE EXAMPLES THAT CONTRADICT COMMON SENSE

Which will create more productivity, a piece-work compensation system or an hourly rate of pay?

This is an easy one for anyone trained with a normal dose of "common sense." Piecework systems clearly give people incentive to produce more product whereas hourly systems pay people the same whether they work hard or slough off. The common sense answer therefore is that piecework is a better way to pay people.

The Total Quality answer though is just the opposite. It asserts that while piecework systems promote production volume, they also promote a lack of quality. If a lathe operator sees that her machine is producing defective products, she has no incentive in a piecework system to say something. Instead, she wants to produce product regardless of the quality. Therefore, paying by piecework will lead to a higher defect rate and much higher rework rate. Overall production of "acceptable" product therefore will be less, and not more, when using piecework systems.

DOES YOUR INCENTIVE SYSTEM PENALIZE PEOPLE WHO SLOW DOWN IN ORDER TO REDUCE THE ERROR RATE?
Similarly, garages that pay their mechanics on a "menu" system are unwittingly giving incentives to work fast-- never mind the quality. They will suffer higher rates of customer dissatisfaction and more rework. In extreme cases, they will suffer the pitfalls that the Sears automotive division suffered in the early 1990s when it was sued in California for doing work that was unnecessary but which increased the pay packets of mechanics.

Armand Feigenbaum has calculated that about 25% to 40% of the typical non-TQM organization's efforts are spent doing things wrong, finding the mistakes, and then fixing them. Feigenbaum calls these efforts the "hidden plant." These statistics usually shock people. Most go into immediate denial that their work systems could be this bad.

Consider how long it takes to fix a simple error, though. For instance, assume a manufacturer shipped the wrong product. The error will have to be shipped back. The correct order will have to be shipped out. Bookkeeping corrections must be made relative to inventory and billing, both for the manufacturer and the customer.
HOW MUCH DOES IT COST YOU TO FIX ONE ERROR?
Because the purchaser can't trust the supplier to ship the correct order, someone must double check every order once it arrives. There's a good chance that the shipper will also have someone double checking orders as well. Combine all these costs and it is easy to see where Feigenbaum's numbers come from.

In education, the 25% to 40% hidden plant is even more obvious. Every year, American school teachers start the first semester by going over all the materials students have forgotten over the summer. Countless students spend innumerable hours being taught materials they don't learn, being tested for it, and then being taught again. Currently from 20% to 25% of all American high school students will drop out. What a waste. No business could afford to operate with that kind of reject rate.

Which will be a better purchasing system, one which always picks the lowest bidder, or one which seeks a long term single supplier relationship even when the price is higher?

Again, the common sense answer is to put purchases out to bid and take the low bidder. Otherwise experience has taught most of us that not only will we pay too high a price, but the quality provided may be shoddy as well. Most people believe it is competition that keeps the market place honest.

The Total Quality answer disputes this by asserting that lowest price is rarely the best value.
DON'T BUY ON THE BASIS OF LOWEST PRICE TAG.
There's an old saying commonly repeated by construction estimators, "If ten contractors bid on a job, then the winner of the bid will be the one who made a mistake." Once on the job, that contractor will be forced to cut corners and do a shoddy job in order to survive. The customer would have been better off paying a higher "honest" price and getting a better "honest" result in exchange.

Instead of putting purchases out to bid, Total Quality organizations seek long term relationships with suppliers who will themselves adopt TQM, focus on quality, and give prices that assure themselves a fair profit but not an extortionate profit. This in turn will require open books, which is an anathema to most traditional organizations whose "common sense" tells them to keep all pricing information "close to the chest" in order to get the most profits possible out of each customer.

When we say, "The system is at fault," does that mean we can't do anything, or does that mean we now have our best hopes for truly improving things?

"Blaming the system" is probably one of the most time honored habits of people everywhere. "The system" might be government, big business, or big unions. Once we say, "It's the system's fault," most of us throw up our hands and concede there is little we can do. For most people, "blaming the system" really means "It's out of my control."

In Total Quality approaches, 85% to 90% of all mistakes are blamed on the system. This is not cause for futility, but is rather a diagnosis which leads to a very different kind of problem solving that what "common sense" leads to.

For instance, if charge clerks in a hospital are found to have a very large error rate in data entry, the "common sense" approach would be to focus on the individual clerks, perhaps improving their training or simply telling them they have to "try harder."

A SYSTEM'S APPROACH REDESIGNS THE SYSTEM SO THAT ANYONE WORKING IN IT CAN DO BETTER.
A system's approach would examine the paperwork, computers, and work environment of the clerks. Some simple improvements might include reducing the number of interruptions the clerks suffer while entering data, or simplifying paperwork so that it is easier to find insurance numbers and other required data, or reducing the overall amount of memorization required by using fewer abbreviations and obscure jargon.

Systems thinking does not automatically claim that the system is "broken" when mistakes occur. Instead, systems thinking asserts that the system should be redesigned so that any worker will have a better chance of doing quality work without making mistakes.

TABLE OF CONTENTS

Chapter One Chapter Two Chapter Three Chapter Four Chapter Five Chapter Six Chapter Seven References and Copying Rights