Return On Quality: Beyond The Buzzword
`Quality: How to make it pay" (Cover Story, Aug. 8) hit the nail right on its golden head.
The concept of a "bottom-line discipline to quality" is at the core of any meaningful quality-management strategy. When planning quality efforts, organizations must continually ask: Will this benefit our customers? Will this benefit our bottom line?
Lest one think that "return on quality" is a new concept, look at J.M. Juran's Managerial Breakthrough (McGraw-Hill, 1964). Juran pointed out the critical relationship between continuous quality improvement (breakthrough) and return on investment (the most important measure of financial performance). Everything old is new again.
G. Howland Blackiston
The misconceptions in your article are the same misconceptions that have trapped many companies trying to implement total quality management. You would have done the public a service if you instead probed why Americans:
-- seem unable to deal with a paradigm that shifts our focus to customers as the key to success, with financial results as the outcome;
-- cannot seem to grasp that running around doing lots of stuff is not TQM;
-- cannot implement all of a system but instead pick and choose the things that feel comfortable, then are stunned and angry when the results don't pan out.
Managers wouldn't try to drive a car with no tires or assemble a child's toy without all of its parts. Yet they routinely operate this way, implementing systems with incomplete understanding, leaving out important components.
You seem to misrepresent the philosophy of W. Edwards Deming, with whom I worked until his death. Deming would not have been proud of any company that lost sight of the need to please customers nor of any company that thought profit was less important than quality.
Total quality management is a thoroughly pragmatic (albeit extremely demanding) way to make increasing profits by not only satisfying but delighting customers with better products and services for less cost.
Return on quality is a fine idea, one which Deming would have approved, assuming that you can make the measurement, which I doubt. Deming would worry that if we focus more on cost than on quality, we will be back to the days of the cost-effectiveness analysis, which gave us the Ford Pinto. Quality gave us the Ford Taurus. You pick; Ford already has.
You took six full pages of one of the most important business magazines in the world to tell readers that: (a) a religious-like devotion to the quality movement and all its many artifacts, trappings, rites, and rituals is no guarantee of business success; and (b) I ought to pay attention to the financial returns from my quality program.
Just how stupid do you think we are?
Frederick W. Nickols
East Windsor, N.J.
Your article puts the cart before the horse. How can you design an effective process and calculate the return on quality initiatives without knowing what your customers want?
Profitable companies use customer intelligence as the cornerstone of their quality programs to deliver more of the right values at the right time. A recently published study concludes that "strong market leaders" deliver 15% more satisfaction than their competitors, and that increasing customer satisfaction by 3% adds 1% to ROI.
It is more difficult than you think to link "buzzword" programs (e.g. TQM, reengineering) to customer requirements. Managers and workers get all fired up to fix what they perceive to be broken and seldom go to the customer for input. It is another hurdle to fold these requirements into a tactical plan.
It is ironic that the Commentary on page 27 ("DEC's board has woken up. Now comes the hard part") concerns a company that should read the [quality] article very closely. Simply rolling out a program is not enough.
James H. Dooley
We don't know the source of a statement on Johnson & Johnson in your article referencing our experience with benchmarking. To the contrary, our benchmarking efforts have had a significantly favorable return-on-quality investment and have led to better products and services for our
Jeffrey M. Nugent
Johnson & Johnson
New Brunswick, N.J.