The Quest for Quality by Mark Henricks Appearing in the September 1992 issue of ENTREPRENEUR What if you and your company got just a little better at everything you did, every single day? In just a few weeks, you would be a lot better than you are now. After several months, you'd probably be among the top firms in your industry. And in a year or two, you'd be the best--practically perfect--so good your customers would simply have to do business with you. On the other hand, what if your competitors constantly improved while you stayed the same? Before long, you'd be out of business. That, in a nutshell, is the promise--and the threat--behind the quality movement sweeping American business. The way its many devotees put it, you can pursue quality and reap untold rewards...or continue doing things the same old way and harvest total failure. The contemporary quality movement started as early as the mid- 1920s, according to Clare Crawford-Mason, a Washington, DC, television producer and co-author of "Quality or Else" (Houghton- Mifflin). That was when Walter Shewhart, a Bell Labs scientist, figured out how to use statistics to boost the quality of Western Electric telephones. By analyzing the incidents of error in the manufacturing and service process, Shewhart was able to see what changes needed to take place. W. Edwards Deming later gained fame as the man who spurred Japan's quality movement in the 1950s. More recently, Philip Crosby, author of "Quality in Free" (McGraw-Hill) and Joseph Juran, author of "Juran on Planning for Quality" (Free Press), became well-known quality advocates in the United States. But Shewhart's techniques, including a simple diagram called the Shewhart Cycle for plotting quality improvement projects, are the bedrock beneath many of today's quality ideas. By looking at the manufacturing process of a product or service, a business owner is able to see what needs changing or modifying. And by statistically analyzing the effects of these changes, you will be able to raise--sometimes significantly--the quality of your own product or service. Wherever it came from, there is no doubt why American business is interested in quality these days. The answer: Japan. It's easy to see that Japanese companies are among the toughest competitors on the globe; and an emphasis on quality is one of the clearest differences between American and Japanese management styles. Total quality management (or TQM, to use one common label for the many approaches to quality) is not simple or easy, however. Most theories stress the same general principles: teamwork and communication between workers and managers; using statistics to find problems and track improvements; regularly checking with customers to determine their needs; and, most important, constantly striving to improve quality. But inside that broad framework there are many gurus, each more fervent that the last. Many people exposed to the quality scene come away feeling as though they have seen something like a religious movement. And quality proponents are devout in their insistence that you swallow its tenets whole, with no reservations. "It's not like a Chinese restaurant menu," says Crawford- Mason. "You can't take a little from Column A and a little from Column B. You have to do the whole thing, or it doesn't work." True quality converts are also distinguished by the conviction that TQM's principles are useful in a nearly universal range of activities. "TQM is applicable to General Motors, as well as to the neighborhood dry cleaner," contends Crawford-Mason, who says she even finds quality principles helpful in managing her family life. Not everybody is quite as sold on quality, however. "There is nothing magical about TQM," says William Winchell, who spent 16 of his 32 years at General Motors Corp. as a quality expert. While Winchell says small, large, manufacturing and service companies can benefit from TQM, he cautions against blindly plunging into a total commitment to the movement. Winchell describes TQM as an umbrella with many techniques hanging from it. Many of the tools, especially ideas about teamwork and cooperation among different levels of a company, can help small businesses as well as multinational corporations, "Not all ideas are good for the small company. You have to select what's good for your own business." People in agreement with Winchell cite the case of Wallace Co., Inc., a Houston distributor of refinery and petrochemical equipment with $71 million in 1991 sales. Wallace was the 1990 winner of the Malcolm Baldridge National Quality Award, an award similar to Japan's Deming Award, which is handed out to companies that show outstanding devotion to quality. The Wallace Co. was held up as an example of how a small firm could triumph using quality as a guide. But in June, Wallace was forced to file for protection under Chapter 11. John W. Wallace, 56, CEO of the company his father founded in 1942, says the failure of a bank that handled nearly all the company's financing was partly responsible for the filing. But, he adds, he's not trying to point the finger at anyone. "It's not completely bad luck. I made some mistakes, no doubt about it." Specifically, Wallace say he was too slow to reduce general and administrative expenses by laying people off when recession hit last year, cutting sales 37 percent from the year before. Quality theory, he explains, says you don't lay of workers with whom you've invested lots of time and training; you just move them to another place in the company. "That's just fine for a big company," Wallace now say, "but not for a little one." Picking and choosing the right techniques for your particular business situation is the key to making TQM work--and you don't have to try to win the Baldridge Award to practice it. Just how do you do it? The exact steps vary, but here are the common components: 1. Make a commitment. As a business owner, you should be deeply involved and completely committed. If you're wishy-washy, the results will be as well. 2. Form a TQM council of managers and supervisors. Their jobs is to guide the saturation of quality ideas into the whole company. 3. Distribute authority downward. Let employees make more decisions on their own. At the Toyota plant in Georgetown, Kentucky, which is often praised for its quality, individual workers can call on "team leaders" should they spot a quality problem. If the problem is not resolved within one minute, the assembly line automatically halts production. 4. Emphasize cooperation over competition. Put employees in teams and direct them to spot problems and recommend solutions. 5. Choose a way to measure your progress toward quality. Make it specific, such as defects per million on a factory line, or number of customer service complaints. "Zero defects," a rallying cry of Philip Crosby, is probably unattainable in this imperfect world, but it's a good idea to set goals you have to stretch to reach. This is where the statistical process controls, like those pioneered by Shewhart, come into play. 6. Pump customers and employees for feedback about quality, whether it's in your products or processes. This means actively soliciting and encouraging comments and acting on them when appropriate. 7. Constantly train and educate your work force. Deming's 14- point quality agenda stresses the need to provide and encourage both on- and off-the-job training in quality practices, such as statistical process control, workplace skills, and general education such as basic literacy and math skills for all workers. 8. Focus on changing the system, not the people. This is a key difference between traditional American management and the quality approach. "If all you're interested in is finding somebody to blame," says Crawford-Mason, "you're never going to improve your business." Lest you forget, improving your business is what the quality movement is all about. Even Wallace, now in bankruptcy, feels he has benefitted from the quality movement. If nothing else, he's gained new customers who, because they believe in what he's doing, are sticking by him through his troubles. Finis. [Note from Tom Glenn: The current issue (as this written) of Entrepreneur is on the newstands. It contains this and other articles. I am indebted to Chuck McCarty of the HHS ASPER board for this file.] Provided by Tom Glenn, TQM BBS, 301-585-1164