innovation

Accelerating Quality

(Image Credit: Doug Buckley of http://hyperactive.to)

As part of World Quality Month, ASQ CEO Paul Borawski asks what we can do to more actively promote the discipline of quality.

There are two ways, in my opinion, to accelerate the adoption of quality philosophies and practices:

1. Return everyone’s focus to GOOD BUSINESS.

(Rant: That is, it’s time to turn away from the siren song of “increasing shareholder value”. Who are these shareholders anyway? They are a nameless, faceless swarm of customer IDs in a database, OR more likely, a list of mutual fund accounts whose stakeholders don’t even know they’ve invested in your company… they just want a return on their investment.)

There has been a 2005 NY Times article about Costco making the rounds anew on Twitter recently. It discusses the position of Jim Sinegal, who retired in January 2012 as the company’s CEO, uncompromisingly focused on taking good care of employees while keeping costs and margins low:

He rejects Wall Street’s assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street’s profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco’s customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers’ expense. “This is not altruistic,” he said. “This is good business.”

According to a more recent post at The Motley Fool, the Costco strategy is certainly achieving shareholder value, although I’d claim it’s the result of “peripheral visioning” – doing GOOD BUSINESS that just happens to pay off for the investor constituency.

Lynn Stout, author of The Shareholder Value Myth, says that “overemphasizing shareholders leads to a focus on short-term earnings, discouraging investment and innovation.” I say that overemphasizing shareholders depersonalizes the work, takes emotion out of the equation, and minimizes or eliminates the inspiration that is so critical to hyper-productivity and creating a culture of innovation.

(The publishing industry today provides a great example of how shareholder value is decoupled from delivering value. Andrew Sullivan also has a great video on this.)

2. Work on PERSONAL TRANSFORMATION. Like you, yourself — personally. We spend a lot of time in our organizations developing missions, visions, and values, and launching initiatives and review processes to encourage the kind of behavior and attitudes that we’ve decided the organization wants. But what we too often fail to recognize is that by instituting a transformation within ourselves, we can infect others in the organization with positivity, optimism, and professionalism. I think this is what Deming’s message was originally aiming towards… and I think we can transform ourselves by aspiring to new levels of quality consciousness.

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