The Perfectly Imperfect World of Quality

I have been inspired to write this article after learning about Joseph Juran and understanding the effect he has had on our society. I started working at Juran Global about six months ago, and since then I’ve had several friends and past colleagues reach out to me with questions like, “What is Juran?” and “What do you guys do?” I figured this would be the best place to explain why our organization exists.

Whether you recognize it or not, the quality of products, services, and processes affect our lives on a daily basis. Let's look at what quality actually is. In his book Dr. Juran’s Quality Essentials: For Leaders (McGraw-Hill Education, 2014), Joseph DeFeo, CEO of Juran Global, points out that from the customer’s perspective, quality means that a product or service is “fit for the purpose” that the customer has in mind. Fitness has two meanings:
1. The product or service has the right features to meet the customer’s needs
2. The product or service is delivered without failures

Higher quality can mean either of two things:
1. The product or service has more desirable features
• Adding features will generally cost more to create, but the product will sell at a higher price
• Having more desirable features will generally meet more customer demand and raise revenue

2. The product or service has few or no failures or deficiencies
• Fewer deficiencies will avoid the costs of scrap, rework, and other wastes, thereby lowering overall cost
• Products with lower deficiencies, or defects, will be more appealing to customers, thereby increasing customer loyalty and revenue

In today’s competitive environment, managing quality is not an option. An organization that has products whose quality are superior to its competitors’ will outperform those that do not. Interestingly, most organizations run at about a 3.8 sigma level (99% good), for example:
• 5,000 incorrect surgical operations per week
• Two long or short landings at a major airport each day
• 200,000 wrong drug prescriptions each year
• 11.8 million shares incorrectly traded on the New Yord stock exchange every day

It’s frightening to think that some organizations produce these results, and even more frightening to think about the effect these results have on our everyday lives. Take healthcare, for example. Researchers have found that patients at the worst U.S. hospitals were three times more likely to die and 13 times more likely to have medical complications than if they visited one of the best hospitals. The difference in quality can be a matter of life or death for patients seeking help.

It’s also interesting to note that most of these organizations that run at a lower level of quality fail to reduce the cost of poor quality (COPQ). Financial analysts have estimated that COPQ typically amounts to 5 percent to 30 percent of gross sales for organizations. Reducing COPQ may have the power to transform marginally successful organizations into profitable ones, yet many managers don’t even know what their organization’s COPQ is.

However, there are some organizations that have perfected higher-quality products and services and run at a level of six sigma (these are called best-in-class organizations or Vanguard companies).

Average companies vs. best in class

The question then becomes, why do organizations still struggle to reach a state of performance excellence (six sigma) if we have the tools, methods, and know-how to achieve it?

To answer this question, I think it’s best to rewind to post-WW II, when Japanese organizations discovered that the West was unwilling to buy its products because of their reputation for poor quality. Poor sales became a signal and a stimulus to start the Japanese quality revolution of the 1950s. Quality’s power as a competitive factor between countries drove the need for Japan to look for alternative strategies to manage the quality of its own products.

During the next couple decades, Japan’s leadership focused on improving quality. During this period, they recognized Joseph M. Juran as the person who could propel them to world-leader status in quality. Juran is known today as a pioneer in the quality field, where his methods and tools literally changed the business world—and society—for the better.

One of the big things the Japanese latched onto during Juran’s many visits was the concept of annual quality improvement at a revolutionary rate. As a result, the country’s rate of improvement had a very steep slope, whereas the West had a shallow slope.

Most important, Juran is recognized as the person who influenced the addition of the human dimension to quality, broadening it from its statistical origin to the more comprehensive concept of total quality management. He believed that problems in human relations were the ones to isolate and resolve. Resistance to change was cultural, and he believed it to be the root cause of quality problems.

For this reason, Juran spent most of his time in Japan training and educating managers within organizations. He believed that transferring his knowledge to employees was the key to culture transformation and the beginning of the road to best-in-class quality.

Toyota is a perfect example of using human capital to drive quality improvement. According to Jim Destefani’s article, “Masters of Manufacturing: Joseph M. Juran,” workers at Toyota come up with more than a million quality improvements every year. Most of those improvements are made by the workforce; a vital few are made by managers. But the “useful many” are contributed by employees, and that system also improves employees’ sense of participation and morale.

Organizational improvement should come from the “useful many.”

Another example of a well-known leader following Juran’s principles was Steve Jobs. Juran met with Jobs frequently when he was running NeXT. Jobs identified that U.S. manufacturing was lagging behind Japan, and sought help from Juran to understand what they were implementing into their organizations.

“The whole philosophy behind these newer quality approaches is that people shouldn’t have to ask management permission to do something that needs to be approved,” said Jobs during a video interview for production of An Immigrants Gift: The Life of Quality Pioneer Joseph M. Juran. (The entire interview can be seen on YouTube.) “Authority should be vested in the people doing the work to improve their own processes, to teach them how to measure them, to understand them, and to improve them.”

Jobs quickly picked up on Juran’s way of thinking. He recognized the need to empower employees by creating a structured way of thinking for them. “Juran’s optimistic approach teaches us that people in our organizations are very smart,” said Jobs. “They’re not pawns. They’re very smart. And if given the opportunity to change and improve, they will. They will improve the processes if there’s a mechanism for it.”

As Jim Smith wrote in “Management: The Lasting Legacy of the Modern Quality Giant” (Quality Magazine, 2011), Juran’s unique ideas for approaching quality were developed gradually. They include:
• Top management involvement
• The Pareto principle
• The need for widespread quality training
• The definition of quality
• The Juran Trilogy
• The project-by-project approach to improvement (which later evolved into Six Sigma)

Joseph M. Juran

These are some of the ideas that helped Juran transform organizations around the world. During the 1970s he realized that he needed to create a better way of getting the word out, as he was training only 20 to30 people a week. In 1979, Juran founded Juran Institute with the aim of increasing awareness of his theories and principles. He created 16 video cassettes that explained his theories about how to how to improve quality and sold millions of them.

It is especially heartening that Juran believed to the core of his soul that improvement had to be motivated by the desire to improve society; improvement should never be solely for the sake of profit.

Circling back to my earlier question, why do organizations still struggle to operate at a state of performance excellence if we have the tools, methods, and know-how to achieve it? Perhaps one reason is that the West started its quality revolution too late. Japanese manufacturers started to focus on quality during the 1950s, and it took about three decades for their organizations to become world class. Most of the world, besides Japan, didn’t begin until the late 20th century.

To make the quality revolution effective throughout the world, economies will require many decades—most likely the entire 21st century. Thus, while the 20th century will be known as the “century of productivity,” the 21st century will be known as the “century of quality.”

Organizations are still working toward institutionalizing improvements to improve on the average sigma level of 3.8. The same challenges of human capital Juran worked on with world leaders are still embedded within our organizations today.

“Why Leadership Training Fails—and What to Do About It, a recent article in Harvard Business Review, states that U.S. companies are not seeing their return on investment in training and education (although they collectively spend more than $160 billion annually) because people soon revert to their old ways of doing something.

According to the article, there are six common barriers that organizations consistently struggle with:
1. Unclear direction on strategy and values, which leads to conflicting priorities
2. Senior executives don’t work as a team, or aren’t committed to a new direction
3. A top-down or laissez-faire style by the leader, which prevents honest conversation about problems
4. A lack of coordination across businesses, functions, or regions due to poor organizational design
5. Inadequate leadership time and attention given to talent issues
6. Employees’ fear of telling the senior team about obstacles to the organization’s effectiveness

These human-capital challenges are similar to the issues that Juran uncovered 75 years ago. I speak with quality leaders frequently, and most of them are focused on looking at data to make decisions, rather than speaking with front-line managers and hearing their ideas.

As far as we have come with Juran’s help, we still have thousands of organizations that have not committed to a world of quality, today known as a state of performance excellence. Just before his death in 2008, Juran said, “If we think of quality management as a matter of bringing everybody up to their best, there’s plenty of unfinished business to take care of.”

Whether you are in healthcare, manufacturing, or the service industry, there are many commonalities in the strategies that world-class organizations have deployed to reach a state of performance excellence. These common strategies include:
1. Customers and quality must have top priority
2. Leaders must create a performance excellence system
3. Leaders must make quality a strategic priority
4. Continually benchmark best practices
5. Engage in continuous innovation and process improvement
6. Offer training in managing for quality—extend to all functions within an organization
7. Create an organizationwide focus on quality assurance
8. Focus on project by project improvement and cross-functional teams
9. Empower employees
10. Renew your commitment to superior quality annually

As we continue to move forward in the 21st century, we will continue to see more organizations use the roots of Juran’s teachings to strive for perfection to achieve a state of performance excellence. Think about your organization's quality and customer experience. Where can you improve?

About The Author