Quality Management


The Santayana Review

The Santayana review is one of the best, proven tools for truly learning from past experience.

In 1988, Joseph M. Juran wrote about the process of deriving lessons learned from retrospective analysis--conclusions drawn from data on repetitive cycles of prior activity. He named this process after philosopher George Santayana, who once observed, "Those who cannot remember the past are condemned to repeat it."

In many production processes, manufacturing or white collar, we have the opportunity to make hundreds, or even thousands, of observations on a daily or weekly basis. By analyzing these errors or samples of them, we can identify the major causes and then take remedial actions to reduce the errors.

 We sometimes use these analyses to determine process capability, which assists us in designing control systems or aids in future product or service development activities. Applications of these "Santayana reviews" to high-frequency cycles are numerous; they form the basis of much of quality management.

Santayana reviews are applied less commonly to intermediate-frequency cycles; cycles that happen tens or hundreds of times per year. Examples of these cycles abound: companies reviewing credit-worthiness of customers; companies performing quality audits and ratings of suppliers; companies recruiting, interviewing and hiring employees; companies preparing hundreds of technical reports.

Santayana reviews are applied even less often to low-frequency cycles that range from one cycle in several years to several cycles a year. Examples of these low-frequency cycles include development of new products, development of an Internet Web site, major construction projects, launching a campaign in a new market, building a refinery or plant, and introducing a new law.

These low-frequency cycles often offer the greatest learning opportunities that, subsequently, can lead to significant breakthroughs. In his classic paper, "Post-Project Appraisals Pay" (Harvard Business Review, March/April 1987), Frank R. Gulliver described how a team at British Petroleum conducted historical reviews of large business undertakings: joint ventures, acquisitions and major construction projects.

These reviews focused on business strategy rather than on whether functional goals were met. Gulliver opens with a challenging statement: "If your company is like most, you spend thousands of hours planning an investment, millions of dollars implementing it, and nothing evaluating and learning from it. As a result, you may not have answers for the most basic questions: Was the investment successful? What made it go according to plan? Did it go according to plan at all?"

BP developed its post-project appraisal unit for the sole purpose of helping the entire company learn from its mistakes and repeat its successes. Unfortunately, very few companies have such units. Most continue to make the same mistakes, learning by trial and error over and over again. Fundamental reasons for failing to use the Santayana review include: It's a lot of work now for benefits that may come much later; the review's benefits may accrue to other parts of the organization, not the one doing the work; and no one is responsible for these reviews.

The cost associated with not doing these reviews is considerable. One area where the reviews are most needed is new-product development. Much of the time required for new-product development is some form of waste: redoing earlier steps, rewriting requirements, revising drawings, engineering changes, recalls and field modifications, and wasted supplies. The extent of these wastes and their causes can be discovered by careful studies of prior development projects. Stunning breakthroughs in development times and costs can be made.

These reviews need not be difficult; they can be made routine. One product-development group requires preparing a page on each error in the development process. The top part of the page describes the problem. The next quarter of the page summarizes how the team solved the problem. The third quarter suggests how the problem could have been prevented in the first place. On the bottom quarter of the page, the reviewer states how this information will be shared with others engaged in similar product developments.

Large projects, such as large construction projects, designing a new airplane or car, or major acquisitions, require a more structured approach. An upper management team must guide the review, defining the mission, identifying the appropriate questions, reviewing progress and applying the findings. They usually assign a working team to review the history of prior cycles and to provide the needed answers. In reviewing the design process of the 727, 737 and 747 airplanes, Boeing used a team of 33 managers and engineers working full-time for three years. An oil company had nearly 10 managers and engineers working for six months to review the development of a new field.

Many companies talk about becoming "learning organizations." The Santayana review is one of the best, most proven tools for truly learning from past experience.


About the author

A. Blanton Godfrey is chairman and CEO of Juran Institute Inc. at 11 River Road, Wilton, CT 06897.

1999 Juran Institute. For permission to reprint, fax Godfrey at (203) 834-9891 or e-mail agodfrey@qualitydigest.com .

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