The Equity in Quality

Boosting the bottom line

Published: Monday, August 13, 2007 - 22:00

If you have only $10,000 to improve your business, should you pour it into a marketing initiative or a performance initiative? I vote for improving performance every time. The long-term payback will be extraordinary.

The quality you provide to customers is the value that they receive from the performance of your products and services.

In a manufacturing process, quality refers to number of mistakes per million parts. It also refers to the refreshing taste of a dessert at a frozen custard stand, the speed with which a pizza is delivered, and the friendliness of a hostess at a local restaurant. Your marketing theme will soon be ridiculed if the actual performance doesn’t live up to the promises made.

Performance enhancement or marketing splash?
Quality builds the brand. Here’s a phrase-association game. What do you think of when you read the following?:

“An amazingly well-designed, user-friendly computer…”

“Entertainment for all members of the family…”

“A cup of coffee so delicious it feels like a reward…”

Apple, Disney, and Starbucks first created extraordinary quality, and then they became known for that quality. Notice: High quality first, great brand second. The brand attracts and keeps lots and lots of great customers, but you can’t successfully advertise what doesn’t exist.

The same method for enhancing quality can be used no matter what business you’re in.

Five steps to creating breakthrough quality:

1. Define the performance business you’re in.
2. Identify your current standard.
3. Focus on two points.
4. Overcome the “Tiger Woods syndrome.”
5. Loop back with customers.

Define the performance business you’re in
Disney/Pixar Animation Studio is in the motion and emotion performance business. Their quality is wrapped up in visually and emotionally appealing films. When Pixar’s standard of quality became dramatically greater than that of Disney’s animated films, Disney bought them out and put them in charge.

What performance are customers looking for from you? Do your customers desire you to deliver faster (FedEx), rarely break down (Toyota), make the purchasing process easier (amazon.com), or deliver breakthrough ideas (IDEO)?

Don’t be married to a certain product, service, or profit margin. Focus on the performance you’re expected to deliver. According to the June 11, 2007, issue of BusinessWeek, 3M almost smothered its creativity through Six Sigma. 3M is expected to perform as an innovative company. Potentially ruining that creative culture in exchange for short-term profits was not a good trade off.

Identify your current standard
How are you really performing in the areas that customers expect you to perform in? Ask your customers a simple question: “In terms of our performance to you, what are we doing really well, what are we doing average or below average compared to the competition, and how could we perform better?” If you ask 15 customers that question, you will start to get an idea of your current reality.

Then, shop the competition. Study the performance that they’re delivering. Look at it from the customer’s point of view. Even a subtle idea such as having a greeter in a fast-food restaurant can be a difference maker. What’s the competition doing better than you right now?

Focus on only two points
As you work to enhance quality, focus on only two points: the point just ahead of the best performer in the world and the point just ahead of where you’re right now. Which company is the best performer in the world in your particular area? What makes that organization’s performance better than yours? That’s the only point that matters to customers. They want to be with the best of the best.

While keeping the highest standard in the world in mind, focus your efforts on getting to the point just ahead of where you’re right now. Each day move forward one step in terms of providing greater quality. Keep moving until you reach the spot just ahead of the best performer in the world.

The “Tiger Woods syndrome”
There’s one danger to be on the look out for. One day you may be the best in the world in your particular performance area. Then what do you do? Tiger Woods and Michael Jordan faced that problem, but instead of looking back at the second-best performer, they kept their eyes focused on raising their own performance bar.

If you’re the best performer in the world, ask yourself one simple question, “How can I make tomorrow better than today in terms of the performance that I provide my customers?”

Loop back with customers
Customers have a neat way of keeping companies grounded in reality. Just in case you thought about coasting on past performances or a powerful brand, remember that customers don’t care about past performances or great brands. Continue to engage customers in meaningful conversations about the quality they receive from you and what would make it better.

Equity increases as quality rises
Every time you increase your relevant business performance to customers, it’s like putting money in the bank. Customers become more loyal, they purchase more of your products and services, they tell other people about the quality you offer, and they keep coming back for years and years. Quality is the real secret formula for long-term success.

About The Author

Dan Coughlin

As a keynote speaker, Dan Coughlin provides practical advice to accelerate companies’ key business outcomes. As an executive coach, he has spent more than 3,000 hours on-site working with executives in more than 20 industries. His clients include Toyota, McDonald’s, Marriott, Coca-Cola, St. Louis Cardinals, GSD&M, Boeing, and AT&T. His new book, Accelerate: 20 Practical Lessons to Boost Business Momentum (Kaplan Business, 2007) is available wherever books are sold. To reach Dan, visit www.businessacceleration.com.