21st Century Quality

13 years into what Dr. Juran said would be the "Century of Quality", ASQ CEO Paul Borawski asks in his January 2013 blog post, "What do you use as the best, most inclusive, and illuminating definition of quality?" The 2011 Future of Quality Study defines Quality as a force of change, and introduces the concept of "21st Century Quality" - Quality is ultimately what the customer says it is, and what the customer is willing to pay for. Quality today is more than product quality. Perfect product is a given. Exceptional service and transactional quality are often powerful differentiators.

• Quality improvement is the process of managing variation around customers’ expectations.
• Quality processes deliver brand promise, protect the enterprise, improve operational excellence, enable customer-perceived value, increase customer satisfaction.
• Quality, then, in its simplest definition is "Total Customer Experience."

Total Customer Experience is the sum of all experiences a customer has with a supplier over the duration of their relationship with that supplier, from awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy. Superior Total Customer Experience delivers memorable, satisfying experiences in every transaction every time. Peter Drucker, a renowned Quality Management expert reminds us, “Quality in a service or product is not what you put into it. It is what the customer gets out of it.”

People often ask, “How is Quality different than Lean Six Sigma?” It is my opinion that while Lean, Six Sigma, PDCA, etc. are all important problem solving and continuous methods in the Quality practitioner toolkit, Quality is much more than continuous improvement. A key role of the Quality function is to manage the organizational white spaces that exist between departments in cross-functional work systems and processes. Quality recognizes the importance of effective hand-offs between internal supplier and customers to meet and exceed end user requirements. The Baldrige Criteria offers an excellent framework that describes this holistic definition of Quality. I want you to visualize the hamburger. The bottom bun represents the organization's values and principles. The top bun symbolizes its mission, vision, strategies and plans. Lean, Six Sigma, CAPA, PDCA, PPU are the condiments. The meat, cheese and vegetables are the key business processes of leadership, strategic planning, customer focus, human capital, process management, and business results. Quality assures the alignment of these systems and processes to deliver a satisfying burger experience.

Winning in today’s highly competitive, global market requires flawless execution at the speed of the customer. Delivering Total Customer Experience requires stable and capable processes, with consistent flow, and an engaged, motivated and empowered workforce. To quote Ernst & Young, "There is little chance that your customers will be excited about your products or services unless your workers are."

Stating Your Case for a Raise

ASQ Quality Progress recently published its annual salary survey, which again confirms the value of professional certification. As we close out another year many U.S. companies are conducting annual workforce performance reviews attempting to quantify the relative value and merits of employee contributions. Given today's challenging economic environment confronting every employer what is your case for requesting a raise? Regardless whether you are an individual contributor or a supervisor/manager, how have you helped "move the needle" in terms of delivering organizational results?

ASQ CEO Paul Borawski summarizes that the Quality practitioner's primary impact to business results are typically achieved in the areas of "... Customers more satisfied, revenue enhanced, money saved, waste reduced, lives saved, or risks managed".  Personally speaking, quantifying my impact to business results is made more difficult because as the leader of a corporate staff function I do not have line operation responsibility. Any impact I have to drive business results is the measure of my ability to motivate, educate, engage and influence others. Indeed my role is primarily that of change agent, teacher/coach/consultant, project leader, mentor, cheerleader, customer advocate, and champion for performance excellence. "3M Quality" is a recognized value differentiator delivering customer-perceived best in class performance. Every 3M employee at every level of the organization is responsible for assuring Total Customer Experience.

I approach my role as a servant leader focused on helping my direct reports and business clients to succeed. The case for a raise in 2013 will be made by my clients. Here we use an appraisal process incorporating 360 degree feedback; I am perfectly comfortable letting my employees and clients judge whether I am adding business value while promoting 3M values:

• Act with uncompromising honesty and integrity in everything we do. 
• Satisfy our customers with innovative technology and superior quality, value and service.
• Provide our investors an attractive return through sustainable, global growth.
• Respect our social and physical environment around the world. 
• Earn the admiration of all those associated with 3M worldwide.

3M employees all across the globe are strengthening their operational excellence and continuous improvement skills and competencies through internal training offered by my group, supplemented with ASQ content thanks to 3M's enterprise membership. Many are pursuing ASQ professional certification for personal growth to the benefit of 3M and its customers.

Accelerating the Adoption of Quality

As we celebrate World Quality Month this November, ASQ CEO Paul Borawski asks the Quality community what can we do to accelerate the rate of adoption of quality? A big part of the solution, I believe, is to promote the broader role of "quality" in everyday life. This month the leaders of the MN Section of ASQ organized several community service projects partnering with the Twin Cities Habitat for Humanity to "build a House of Quality". We strategically chose two Saturdays in November with Habitat for Humanity to both recognize World Quality Month and to demonstrate the role of quality in design (e.g. environmentally friendly homes) while building stronger social communities. I am extremely proud of our MNASQ members who quickly filled both November dates to participate on indoor and outdoor new home construction projects. We also had a few members who could not physically participate, and chose instead to contribute via charitable donation towards community playground equipment. Habitat for Humanity was so pleased by the quality of our work and contributions that they asked us to sponsor a Saturday in December. Our members have asked the Section leaders to also consider sponsoring a community service project this spring.

Sponsoring community service projects is just one tactic the MNASQ section is using to define and promote quality as "Total Customer Experience" (TCE).  Total Customer Experience is defined as the overall customer impression based on perceptions and experiences of a company's products, services, people, partners and solutions at every touchpoint. Regardless of whether one subscribes to the notion that the U.S. is shifting from a manufacturing economy to a service economy, fewer people involved in continuous improvement today align themselves with traditional 'Quality'. Hence, one explanation of the decline in ASQ membership since its peak in the late 1980's (Total Quality movement). Today's continuous improvement practitioners are organized around such labels and efforts as process improvement, operational excellence, customer satisfaction, patient safety, etc. Early adoption of quality principles in manufacturing made intuitive sense -  it is much easier to view work as a process in the manufacturing environment where supplier-customer interactions are obvious, requirements are generally known, defects are understood, and data are frequent and numerous. Contrast the manufacturing environment to the transactional world where process thinking is not intuitive, the customer is not always identified, the "product" may not be well understood, defects may not be defined, and data are not systematically collected.

Following the "Diffusion of Innovation" model, (Everett Rogers, 1962), service and transactional quality may be regarded as laggards in the quality improvement journey yet hold great potential to delivering significant gains in performance excellence and business success.

In today's difficult economy with increasingly global competition and sophisticated customers, excellent product quality is a given. Dr. Joseph Juran defined quality along three key attributes: free from defects, features, and reliability.  Following that definition, competitive advantage today is achieved through superior, consistent, reliable product and service performance that delivers unmatched Total Customer Experience... every transaction, every touchpoint, every time.

To help activate the adoption of quality in transactional processes it helps to visualize the cross-functional nature of most business processes. Whereas most functions are defined as silos, most processes are cross-functional. Keys to transactional process improvement are recognize where the  internal supplier-customer hand-offs occur and fully understand the internal customer requirements. A critical role of Quality in transactional processes is to manage the organizational white spaces within each cross-functional process.  Many organizations today are applying lean tools and concepts to help them drive speed and improve efficiency through the elimination of waste and non value-added activity.

Dr. Deming is quoted to having said, "Change is not necessary. Survival is optional". Lean, Six Sigma, PDCA, CAPA, etc. are all valuable methods of problem solving and continuous improvement to help assure competitiveness of the enterprise. But I define Quality much broader than continuous improvement alone.
Quality is the intentional alignment of mission, vision, values, leadership, planning, customer focus, work systems, workforce and continual improvement for organizational success. I prescribe to the "hamburger" model of the Baldrige Criteria where continuous improvement is just one crucial ingredient to performance excellence of the organization.



Quality is achieved by flawless execution at the speed of the customer. So how do we measure flawless execution? The Cost of Poor Quality (COPQ) metric and a measure of customer satisfaction (or even better - customer loyalty) are two key indicators.

COPQ Iceberg illustration from Free-Six-Sigma.com

Traditional measures of COPQ track the measures that are relatively easy to observe, such as waste, scrap, rework, inspection costs, disposal costs, warranty and complaints costs, etc. Though these measures are relatively easy to obtain (i.e. "Visible" costs), more often the greater opportunity for operational excellence and customer experience is in the "hidden costs" of excess inventory, numerous engineering change orders, lost sales, costs to expedite shipments, limited product availability caused by the lack of speed, flow and synchronization of one's key value streams, etc.

Illustration from SixSigmaTraining.org

As quality costs are reduced, profits are increased.  As value streams are optimized to increase velocity and flow, customer satisfaction is increased due to improved "product" quality and availability.

So, back to Paul Borawski's question of how can the quality professional accelerate the adoption of quality... Quality must be defined much more broadly than product or service quality. Competitive advantage today is achieved by a relentless focus on delivering Total Customer Experience including exceptional product/service/transactional quality, consistently good customer service, a warm, inviting customer experience, a commitment to environmental stewardship and social responsibility. Politics aside, I like Chick-fil-A and Caribou Coffee as two role model organizations in this regard.

Increasing the Value of Quality

During my 31 years in Quality engineering and management I have come to understand, appreciate, advocate and promote the greater role of the quality professional in organizations large and small. Though the average person on the street still thinks of quality as QC and inspection activities (aka "little q"), the demand for "Big Q" strategic, enterprise-wide quality has never been stronger, nor the urgency and importance greater. Today's continuing difficult global economic condition is causing uncertainty in the marketplace. Just this evening the CBS television news documentary 60 Minutes asked the question, "Are we headed for a recession or economic recovery?" Many businesses are scaling back their growth plans and even shrinking their work force in order to limit their exposure and reduce their risk in these uncertain times; they are exhibiting a bunker mentality, hoarding their cash instead of investing in capital expansion, commercializing new products and hiring new talent.

Every year since 1999, The Conference Board has asked hundreds of CEOs from the world’s leading organizations to identify their most critical challenges. The top five challenges from the 2012 CEO Challenge are Innovation, Human Capital, Global Political/Economic Risk, Government Regulation, and Global Expansion.

ASQ has conducted six Future of Quality Studies – in 1996, 1999, 2002, 2005, 2008 and 2011. The studies comprise three major components.

1. Identify the key forces that are most likely to shape the future of quality.
2. Develop alternative scenarios describing how these forces might unfold.
3. Determine implications for organizations, the quality field, and for quality professionals.

The 2011 ASQ report, titled "Emergence" discusses the 8 key forces affecting the Future of Quality as summarized from the input of 140 participants in 33 countries: Global Responsibility, Consumer Awareness, Globalization, Increasing rate of Change, Workforce of the Future, Aging Population, 21st Century Quality, and Innovation.

The similarities and overlap between these two studies validate the alignment and importance of Quality's increasing role to deliver organizational performance excellence and business results. I believe the Baldrige Criteria serves as an excellent framework to position Quality responsibilities throughout any organization. The Baldrige Criteria categories address leadership, strategic planning, customer focus, workforce engagement, operations management, continuous improvement and business results. 21st Century Quality goes beyond traditional product and service quality. It is about total customer experience: quality as defined by the customer in every transaction, every encounter - and everything in between.  21st Century Quality starts and ends with the customer. Quality has the opportunity - the obligation - to advocate for the customer (internal and external) throughout the Value Stream. Validating the voice of customer (VOC) to assure differentiating performance and competitive advantage is a key opportunity for the Quality improvement professional. The savvy Quality professional also understands the weakness in VOC methods to gather unarticulated customer desires, and is able to experiment with and facilitate new ideation methods.

Continuous improvement of the voice of process (VOP) is the traditional role of Quality, associated with assuring product and service quality. However, simply meeting specifications (requirements) is no longer good enough. Meeting requirements reinforces a goal post mentality where everything in-spec is equally good. Customers and patients today are more discerning; competition and regulations are becoming more numerous, and the pace of change is accelerating. Today's Quality professional recognizes the value of a quality-by-design, "Run to Target" mindset and is able to convey the merits of sustainability and statistical thinking to help organizations achieve operational excellence. Operational Excellence delivers cost-effective solutions through capable and stable, yet responsive and agile work systems and processes. Today's Quality professional is able to teach, coach and manage an effective Quality Management System to assure regulatory and industry compliance and business continuity. Today's Quality professional is also able to recommend, coach and lead the most appropriate continuous improvement methodology given the organization's culture and needs.  Lean, Six Sigma and Quality together support an overall business performance improvement strategy comprised of problem solving and continuous improvement. Lean philosophy abhors waste. Lean is a continuous improvement methodology that seeks to reduce cycle time and increase flow (i.e. speed) to consistently deliver quality product/service on time at the right quantity and value. Six Sigma is a project-by-project problem solving methodology that seeks to reduce defects for reduced variability and cost, and improved customer satisfaction. Quality processes exhibit predictable aim with minimal variation. Consistent quality and flow cannot be achieved without stable, capable processes; however, entropy is constantly at work. "Entropy acts on every process, causing it to move toward deterioration and decay, wear and tear, breakdowns and failures", says Dr. Don Wheeler. Holding the gains and demonstrating a personal commitment to continual improvement is everyone's job. Successful business performance improvement requires the participation of employees at all levels of the organization. Implementing continuous improvement where everyone is involved greatly enhances employee engagement, resulting in increased customer satisfaction and loyalty. Quality's role as change agent and catalyst for change is a critical, growing responsibility in today's fast paced global economy.

The experienced Quality professional, skilled in strategic planning and change management, is also able consult and facilitate in strategy development, deployment and execution. Hoshin kanri/ business process execution methods are a new frontier for today's Quality professional seeking to make an impact at the C-Suite for enterprise improvement.

I believe the strategic, customer-focused Quality function is uniquely qualified to help businesses mired in indecision and paralyzed by fear to achieve sustainable, quality growth. As Quality professionals we should seek every opportunity to teach, coach and consult to enlighten others that delivering total customer experience requires everyone's participation, resulting in increased customer satisfaction, brand loyalty, confidence and growth.

Speed is Life

In this highly competitive global economy I believe that "speed is life". ASQ CEO Paul Borawski asks for some of the ways the practice of quality is changing to meet the needs of faster, faster, faster.

Now, certainly there are many, many instances in business as in life when, not executed flawlessly, speed can kill. In fact, there are numerous examples when tampering and knee-jerk reactions have resulted in undesired results. While "first to market" offers a distinct competitive advantage when done right, speed at all costs is not a successful long-term strategy. "Quality" processes must be designed to support agile business needs. The key is to focus on velocity, not speed alone. Velocity is speed with purpose, with aim, at the speed of the customer.

Velocity requires a thorough understanding of one's value proposition, and the elimination of non-value added activities and other forms of muda (waste) in your key value streams. Waste is in the way of your business success. Operational excellence is delivered through understanding and translating the voice of customer into high quality, reliable products and services, the elimination of waste, and standardization of the best known way as foundations for continual improvement. Organizations must adopt a learning culture where every employee is encouraged, recognized and rewarded for sharing their best practices and key success factors. Helping deploy a knowledge management system that supports the shift from "learn to know" to one of "learn to do" is another area where the Quality function can help drive business velocity.  Additionally, Quality can play an important role in helping to identify the hand-offs, document internal customer requirements, and manage the organizational white spaces in inter-departmental processes (value streams).

Last month I spoke to the role of trust in driving speed, employee empowerment and culture change. Trust and mutual respect are critical to fostering a safe environment that promotes healthy crucial conversations, welcomes experimentation and values continual learning. In business you get what is measured; measurements drive behavior. Leaders must create experiences and model behaviors to foster beliefs that will drive the actions necessary to achieve desired results. (Connors: Journey to the Emerald City). Here, Quality can assist management to adopt a responsive Lean Management System that transforms strategy into success.

Speed is Life, but speed can kill if not skillfully and flawlessly executed. Quality can be the agent of change in this cultural transformation.

The Key to Speed is Trust

In his August 2012 blog post ASQ CEO Paul Borawski probes the issue of feelings in building a culture of quality noting that feelings drive loyalty and success. Paul asks what personal attributes you look for when hiring someone into your organization. While developing my response this month I serendipitously came across the following Lou Holtz quote in my Franklin Planner®, "Ability is what you are capable of doing. Motivation determines what you do. Attitude determines how well you do it".  I recently hired two individuals into my organization. I place a great deal of emphasis and weight on the applicant's attitude. Competencies being equal, additional skills can be taught.

Simon Sinek ("Golden Circles") tells us that the lymbic brain is responsible for human emotions and feelings, like trust and loyalty; the lymbic brain is also responsible for all human behavior and controls our decision-making. Talent, passion, ethics and integrity are personal traits that I look for in the interview process.

Speaking of trust... trust must be earned and is absolutely required in order to build empowered, engaged employees and high performing teams. Trust is built on a foundation of mutual respect and dignity. Based on research spanning 10 million employees and 10 million customers around the globe, Gallup shows that organizations employing HumanSigma® management principles have outperformed their five largest competitors by 26% in gross margin and 85% in sales growth. In fact, companies that built this critical mass of employee engagement grew earnings per share (EPS) at 2.6 times the rate of companies that did not. HumanSigma changes how leaders view their work, their employees, and their customers.

So, if feelings - and trust - are so critical to building a culture of quality, how do leaders create a culture of accountability? In his book, The Speed of Trust, Stephen Covey writes, "... in our flat world economy, the ability to establish, grow, extend, and restore trust is the key professional and personal competency of our time. And the ability to exercise Smart Trust is a vital part of that competency".

The authentic leader is able to effectively communicate the organization's values and principles, possesses strong influencing and story-telling skills, and consistently and constantly models the desired behaviors. Systems and structures such as measurement, recognition and reward are implemented and institutionalized to shape mental models and motivate even greater performance. Joseph Grenny, author of Influencer, says that "true leadership is intentional influence". Influencing is about changing behavior. Motivation is a function of beliefs and personal mental models. The key to successfully effect change is to first identify whether the individual is morally asleep - unconscious of the implications of their behavior, morally deficient, or simply lacks the necessary ability.

Finally, what feelings do I associate with a quality culture? Joy in work. Pride in results. Sense of ownership and personal accountability. Freedom to choose one's own path. Respect from peers, colleagues, suppliers, customers, management and leadership.

If you're working to build a culture of quality in your organization, what attitudes do you believe support the success of a culture of quality? Are the personal attributes universal, or do they differ around the world?

Quality's Role in Social Responsibility

ASQ’s 2011 Future of Quality Study identifies global responsibility as the most significant force in shaping the future of quality.  A total of 1,105 respondents participated in a research study conducted by ASQ in partnership with IBM, which details distinguishing characteristics and metrics that organizations use to lead to successful Social Responsibility programs. ISO 26000 (Social Responsibility) was released in November 2010 but was available in various draft forms for at least two years before the release.

Many people confuse, or at least seem to equate, Social Responsibility (SR) with environmentalism and Sustainability (Green movement, LEEDS certification, etc.).  However, Corporate Social Responsibility has generally focused on governance, responsibility, accountability and transparency; whereas, Sustainability focuses on multiple bottom lines and on the need for systemic changes to protect natural resources. Social Responsibility (SR), then, is ultimately about respect for people and respect for mother Earth.

ISO-26000 emphasizes seven core SR areas: the environment, community involvement & development, organizational governance, fair operating practices, labor practices, human rights and consumer issues. Per the above-mentioned survey, respect for the environment and community involvement tend to be the top two areas of organizational strategic focus.

Paul Borawski, in his latest blog post asks, "How has the standard shaped our dialogue? ... is the world growing more responsive to the needs of being socially responsible?  Is SR mainstream thought, or still in the fringe?" I offer two examples of SR today, one from my employer, 3M Company; the other from the Minnesota Section of ASQ.

3M' s internet website has 1-click links from its homepage directly to its Business Conduct policies and Sustainability efforts. These business conduct policies detail 3M's commitment to integrity and ethics, legal compliance, organizational governance, and respect for dignity and worth of every individual, and the communities in which it operates. 3M's corporate values are stated in a letter from the CEO. These corporate values are consistently and regularly communicated by senior leadership and management:

• Act with uncompromising honesty and integrity in everything we do
• Satisfy our customers with innovative technology and superior quality, value and service
• Provide our investors an attractive return through sustainable, global growth
• Respect our social and physical environment around the world
• Value and develop our employees' diverse talents, initiative and leadership
• Earn the admiration of all those associated with 3M worldwide

3M innovation is guided by three strategic principles that make sustainability implicit in everything it does:

• Economic Success: We build lasting customer relationships by developing differentiated, practical, and ingenious solutions to their sustainability challenges.
• Environmental Stewardship: We provide practical solutions and products to address our environmental challenges for ourselves and our customers.
• Social Responsibility: We engage key stakeholders in dialogue and take action to improve our sustainability performance.

3M introduced its Pollution Prevention Pays initiative - better known as 3P - in 1975. 3P prevents pollution at the source, in products and manufacturing. Back in 1975, that was considered innovative thinking. To date, 3P has resulted in the elimination of more than 3.5 billion pounds of pollution and saved 3M nearly $1.5 billion. More recently, 3M Environmental, Health and Safety (EHS), and Lean Six Sigma - Corporate Quality (LSSQ), have teamed up to drive a lean philosophy (elimination of waste), and Cost of Poor Quality (COPQ) reduction, and are developing a "Zero Landfill Plus" recognition program. (Zero Landfill is increasingly promoted today by environmentally-conscious businesses as a measure of Sustainability, but it is deemed an incomplete measure of sustainability because it can lead to unintended consequences such as increased incineration or simply converting waste into fuel.) 3M's goal is to eliminate the use of solvents and reduce the consumption of natural resources in the design and manufacture of products, thereby protecting our natural resources and ensuring a clean, safe environment for future generations.

Turning to the local section of ASQ, the Minnesota Section (#1203) leadership has included SR in its long range and annual strategic planning  process since I first became involved in the Section back in 2007. Long-term strategic objectives are synthesized and prioritized, then fed into the business execution X-matrix where annual objectives and tactics are developed and project plans implemented. An updated Mission and Vision have been communicated, and are used to validate our new products and services. The MNASQ Executive Board reorganized itself in 2010 to improve organizational governance, responsiveness and agility, and increase member satisfaction. A formal succession planning process has been developed to improve the leadership skills of our member leaders for improved engagement. An Executive Roundtable was designed and delivered to capture the voice of our members' bosses to learn where and how the Section can help them - and their organizations - to succeed. This year the Minnesota Section is working with Habitat for Humanity to partner on a project to build a "House of Quality" in November... World Quality Month! What a great opportunity to demonstrate the intersection of Quality and Social Responsibility!!