The Seven Elements of Excellence
Organizations must define their goals before moving forward.

H. James Harrington
jharrington@qualitydigest.com

Most people think they understand quality and excellence, but very few people will agree on a common definition of either term. One of the first things an organization must do is to define some of the basic improvement rules and concepts that it will use as building blocks in its improvement process. The executive improvement team should develop and answer the following basic improvement questions:

What is the definition of quality? The meaning of quality is based on personal experience, and everyone defines it in his or her own way. Philip Crosby defined it as “conformance to requirements.”

W. Edwards Deming said: “Quality control does not mean achieving perfection. It means the efficient production of the quality that the market expects.” Joseph M. Juran defines quality as “fitness for use.” Armand V. Feigenbaum calls quality “the total composite product and service characteristics of marketing, engineering, manufacturing and maintenance through which the product and service in use will meet the expectations of the customer.”

The American Society for Quality and the American National Standards Institute define quality as “the totality of features and characteristics of a product or service that bear on its ability to satisfy a given need.” Webster’s Third New International Dictionary defines it as “degree of excellence.” I define it as “meeting or exceeding customers’ expectations at a cost that represents value to them.”

When it comes down to it, the word can mean just about anything the customer wants it to mean. However it’s defined, customers around the world want more of it. A yearly public buying survey prepared by Yankelovich, Skelly and White, an opinion-research firm, shows that customers are willing to pay more for better quality. Kikkoman President Katsume Mogi states, “You have to know what the consumer wants as well as what he needs, then you must satisfy him with quality.”

The first place the organization should look for guidance is in the company quality policy. A quality policy commits each employee to provide the customer with competitive quality products and/or services on schedule and includes not only the end product or service that is delivered outside the company but also the service or product provided to other employees within the company. Furthermore, because quality is everybody’s job, the definition must encompass this holistic scope. Limiting quality to the factory floor or just to the external customer is a sure way to increase costs, reduce productivity and eventually bring failure to your company.

Keeping this broader customer perspective in mind, one definition of quality might be “meeting or exceeding the internal and external customers’ expectations at a price they can afford and when they need your product or service.”

What is the definition of excellence? Starting from the definition of quality just described, we define excellence as “surpassing internal and external customers’ expectations at a price that represents value to them, and delivering consistent performance without repair or excuses.”

What is the ultimate objective? Companies around the world have adopted a very simple objective: eliminate errors. But Six Sigma allows 3.4 errors per million opportunities. Certainly, milestones provide encouragement and evidence of progress, but our ultimate goal should always be error-free performance. It’s a challenge that makes us better than we were and provides the incentive to be better than we are.

The term “errors” was selected instead of “defects” because errors apply to everyone--the factory worker, the repairman, the engineer, the manager and the like. In today’s environment, a major portion of our thrust for excellence must be directed at the support operations because they account for a major portion of our total expenditures. In most cases, the savings that can be made in these support areas far outweigh the gains that can be made in the manufacturing environment. Manufacturing activities have been measured and controlled for years, but the service areas have gone virtually untouched.

What is the strategy for obtaining excellence? Improvement is achieved in small steps by correcting individual problems. Thus, the strategy might be to be better tomorrow than we are today. A continuous improvement approach should improve the organization’s performance by 5 to 15 percent per year.

What method will be used to obtain excellence? In many companies that have adopted the improvement process, the method is total involvement of all employees to obtain the balance between preventing problems from occurring and evaluating problems that do occur to correct them and then prevent them from recurring. (In most companies, there is a need to spend much more effort in preventing problems so that less effort needs to be spent in correcting them.)

Who is responsible? In the improvement process, quality is everybody’s responsibility. No individual, no department, no organization is immune. But when problems do occur, fix them without blame.

How will improvement be measured? Lee Iacocca said, “If you do the job right the first time, you get both quality and productivity.” The way you measure improvement is increased return on assets, value added per employee, profits and customer satisfaction. Stop measuring the cost of each project. If it doesn’t hit the bottom line, it doesn’t count.

About the author

H. James Harrington is CEO of the Harrington Institute Inc. and chairman of the board of Harrington Group. Visit his Web site at www.harrington-institute.com. Letters to the editor regarding this column can be sent to letters@qualitydigest.com.