Six Sigma
Last Word


Performance Improvement
H. James Harrington

Why the Quality Movement Failed

U.S companies missed their opportunity to rise to the top.

I failed; you failed; we failed. As U.S. businesses entered the 1980s, every informed business leader realized that U.S. products were losing market share because of high prices and low quality. Japan Inc. had established itself as the world leader in quality products. Our trade imbalance with Japan was bad and getting worse. We had lost the world and U.S. markets in TVs, VCRs and consumer electronics. Large organizations such as Xerox, IBM and General Motors had lost up to 35 percent of their U.S. market. Of course, this loss radiated throughout their supplier chains. As a result, executives started to open their minds and their wallets to quality. These open wallets attracted all types of professors, consultants, authors and professional societies.

 Philip Crosby, as president of the American Society for Quality, led the society away from its strict professional and statistical approaches to focus on management's impact on quality. A major TV network released a prime-time program called "If Japan Can, Why Can't We?" featuring W. Edwards Deming. Fortune magazine started running a yearly feature focusing on quality. The U.S. government passed a bill founding a U.S. National Quality Award, called the Malcolm Baldrige National Quality Award, and established the Federal Quality Institute in Washington. The U.S. Navy established a best-practices database that has been widely shared throughout the nation. The American Productivity Center changed its name to the American Quality and Productivity Center. Professional associations such as the American Medical Association and the Institute of Electrical and Electronics Engineers started major programs related to quality. Universities started degree programs that bestowed master's degrees in quality technology. The International Organi-zation for Standardization released the ISO 9000 series to provide guidance and a registration system for quality management systems.

 All the ducks were set up; quality professionals had a one-in-a-million opportunity to achieve a major breakthrough in the quality performance of U.S. products and services. We have made some progress, but we've yet to reestablish the United States as the leader in quality products. No one is projecting that the United States will ever recapture the same high percentage of the world market that the nation enjoyed in the 1950s and 1960s.

 A number of things happened that prevented U.S. organizations from reaching their full potential. For example, every old program that was previously marketed under industrial engineering, human relations, quality, finance or management was repackaged and presented as a quality program. Every out-of-work person who had ever read a book on teams or quality listed himself or herself as a quality consultant. Quality improvement sounded so easy -- all the management team needed to do was have the employees stop making errors. After all, no one wants to do bad work. All management needed to do was give employees a little training and present them with the challenge of doing error-free work.

 Managers were convinced that they needed to let the employees make decisions related to issues that affect them. After all, managers were told that if they put 10 people together as a team, the team would make decisions that were more than 1,000 percent better than one individual's decisions (in other words, 1 + 1 = more than 2).

 The 1980s and early 1990s were the golden years for quality initiatives. Anything packaged under the "quality and customer satisfaction" banner was automatically accepted in a blind leap of faith by management. Programs involving reengineering, teams, six sigma, benchmarking or total quality management (TQM) -- the father of all quality programs -- were funded and implemented indiscriminately.

 By the mid-1990s, executives began to go on record testifying that the quality concepts weren't working. It has been estimated that 30 percent to 75 percent of the TQM processes didn't yield the promised results. Although in many cases individual results indicated that the organization was improving, the organi-zation's total performance was not improving. Key measurements like profit and market share continued to fall. The decline in the Big Three's share of the U.S. automotive market is a good example. Their U.S. market share fell from nearly 100 percent in 1955 to less than 60 percent today and is still dropping. If we can't win the competitive battle at home, we cannot expect to compete in the world market.

 Today, management no longer thinks of quality improvement initiatives as "silver bullets." Now managers are questioning the value of these initiatives and their effect on key business measurements such as return on assets, value added per employee, profits and customer satisfaction. Management is still open-minded about quality, but quality initiatives today must be accompanied by sound value propositions that outweigh other projects like systems applications and products in data processing (SAP), manufacturing resource planning (MRP II) and alliances.

 There are many things we can learn from the past. In a future column, I will look at some of the mistakes we made in quality's golden years and provide some suggestions for what we can do in the future to offset these errors.

About the author

 H. James Harrington is a principal at Ernst & Young and serves as its international quality adviser. E-mail him at jharrington@qualitydigest.com , or visit his Web site at www.hjharrington.com.

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