Six Sigma
Last Word


Phil's Journal
Philip Crosby


The Day the Dotcoms Died

Why did the high-flying dotcoms crash and burn so spectacularly last year? Billions of dollars in corporate and personal wealth disappeared in an instant as investors and customers finally lost faith in many such companies. Yet, just prior to that, there had been convincing talk of a new economy where light-footed, imaginative organizations could have ever-rising stock prices that would fund their work. It wasn't necessary to actually make money because the stock became its own growth mechanism. In a nation whose business world is founded on profitability, this was a unique approach, but it worked--for a while, anyway.

 The industry's numerous failures were blamed on many things, particularly the trend to "burn cash," which quickly ate up valuable resources. Young multimillionaires suddenly found that there was no amount of wealth that couldn't be outspent. Many had pledged stock in order to borrow money because they wanted to let the securities continue to grow. When the cash input flow dried up, their assets suddenly dropped by as much as 85 percent. They were trapped inside an old-fashioned mechanism: They owed more than they were worth.

 The main factor that brought this about should serve a personal lesson to us all as we consider our careers. So many dotcoms failed because they could only do one thing; they had no versatility. It was like a store that only sells one product: When a little pressure comes along, customers find they can get along without that product. One fallen site sold pet food, ordered online and delivered to your door. Every grocery store sells pet food, and people go there anyway. One site was for getting your groceries for you, another was for cheap airline tickets, another for golf balls and another for books. Each had a specialty.

 Now, if you as quality professional are all wrapped up in one thing (e.g., ISO 9000) it's easy to burn a lot of cash. It's necessary to have many arrows in one's quiver; as even the best of us miss the target now and then. Wherever we work, there's change minute-by-minute and day-by-day. And if we think that winning an award establishes us in a bomb-proof bunker, we should look around at what happens to award winners. Amazon.com's founder was Time's man of the year in 1999. Chrysler was Forbes' company of the year that same year. What happened? They kept on doing the same thing and refused to evolve.

 Managing a business is a philosophy supported by thoughtful, hard work. Managing quality is the same. Latching onto a package like ISO 9000, Six Sigma, total quality management, or something else in order to drive our careers is like being a dotcom. Anything produces improvement for a while when attention is paid to it. Children get better grades for a while when a parent gets irritated and involved, but this improvement drops off when the involvement wanes.

 Deal with the real world. Become eclectic; don't limit yourself by becoming a specialist. Learn about life, not just about the techniques of quality assurance.


About the author

 Philip B. Crosby, a popular speaker and the founder of Philip Crosby Associates--now PCA II--is also the author of several books, including Quality and Me: Lessons from an Evolving Life (Jossey-Bass, 1999). To order a number of products, visit his Web site at www.philipcrosby.com  or call (800) 223-3932. .

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