The quality of a person’s life is in direct proportion to their commitment to excellence, regardless of their chosen field of endeavor.
—VINCE LOMBARDI
The quality revolution in America, which started in Japan, has swept across the country and transformed the way we do business. At one time, having a quality product was necessary if you wanted to grow in market share and profitability. Today, you must have a high-quality product if you want to get into the market in the first place. Quality today is both expected and demanded by every customer in everything you sell.
The good news is that there are numerous ways you can improve in almost every area of your business. Your job is to look for ways to do things better, cheaper, and faster every day. You must act as if you are being pursued by an aggressive competitor who is determined to put you out of business by satisfying your customers better than you can.
After World War II, Japan was devastated and the economy was in ruins. The first attempts at recovery led to the manufacture of cheap goods for export, especially to America. These early products, which flooded into the U.S. market in the 1950s, were of such poor quality that they were nicknamed “Jap scrap.”
In the 1950s, an American management consultant visited Japan to advise them on quality-control methods. The Japanese welcomed his ideas with such enthusiasm that he spent the next few decades there. He changed Japan and the Japanese economy forever.
W. Edwards Deming introduced the concept of continuous improvement, what came to be called the “Kaizen method” of quality improvement, into Japanese manufacturing. This single method enabled the Japanese to evolve in a few years into a nation with a reputation for high-quality manufacturing in virtually every area.
The Japanese word kaizen means “continuous betterment.” This is sometimes referred to this as the process of “Continuous And Never-Ending Improvement” or CANEI. This approach to business is based on the belief that it is possible to get better at everything you do, continuously, without end.
When the Kaizen process is introduced, everyone at every level of the business is encouraged to look for ways to do their jobs and produce their products or services better, faster, or cheaper. Management uses suggestion boxes, brainstorming meetings, bonus systems, and constant encouragement to get everyone thinking, all the time, about how to conduct the business in a better way.
Continuous improvement does not require great breakthrough ideas to revolutionize the way business is done, although these breakthroughs occasionally occur. Instead, “line-of-sight” improvements are encouraged in every job. This line-of-sight approach is based on the belief that everyone can see little things they can do to improve their work in their own personal line of sight.
Encourage each person to find ways to do their jobs better, faster, and more easily. Allow them the freedom to experiment with improvements with no fear of criticism if they don’t work. Sometimes the greatest improvements occur as the result of a series of small experiments that were not successful.
You should stand back regularly and examine every product, service, and process. How could you improve it in some way? How could you make it better, faster, or cheaper? How could you get the same or better results faster or at a lower cost? Never be satisfied or content with existing quality levels. Always look for ways to improve upon them.
Brainstorm with your team regularly to generate ideas to cut costs, improve quality, increase sales, and boost profits. Encourage everyone to think, all day long, about how they can do their jobs better. Make this commitment to continuous improvement a part of your corporate culture.
The total quality management (TQM) movement is based on carefully analyzing every step of every process and then looking for ways to improve continuously in every area. One improvement in a key area can give you a competitive advantage in a tough market.
In a competitive business, if you don’t upgrade your quality, your competitors will upgrade theirs and take your business away. The fact is that whatever got you to where you are today is not enough to keep you there. Whatever you are doing today, you will have to be doing it considerably better a year from now if you still want to be in business.
Remember, your competitors are thinking day and night about taking your customers away and putting you out of business. The fastest and best way that they can do this is by offering competitive products at the same price but at a higher level of quality. Your goal is to surpass them in the area of quality improvement before they surpass you.
One way to keep on the leading edge of continuous improvement is to benchmark yourself against the very best people and companies in your business. Select a particular function, such as sales, manufacturing, distribution, or customer service, and then determine who excels in the business in that area. Find out what they are doing and copy it the very best way you can. Once you have copied the best-in-class, look for ways to improve and become even better than they are.
Set excellence as your standard and strive toward it every day. Tell everyone in your company that your goal is to “be the best” in your product or service category. Be extremely demanding in terms of quality standards. Set a high standard for others.
Refuse to allow any product or service to go out the door that is not excellent in every respect. If you hear of a customer who is dissatisfied because of a product defect, you should take it as a personal affront. Immediately apologize to that customer and then do whatever you can to correct the error. Customer satisfaction should be the driving force behind everything you do in your business.
One of the greatest motivators in the world of work is to know that you are working for a company that is committed to excellence. If you could only own one word in the minds and hearts of your prospects and customers, it would be the word “Best!” If everyone in your marketplace referred to you and your offerings as “the best in the business,” what kind of difference would that make in your sales and profitability?
With that as your goal, what would you have to do, starting today, to ensure that everyone refers to you as “the best” sometime in the future? What could you do, starting today, to begin this process? What is the first step you should take?
According to the Harvard Profit Impact on Market Strategies (PIMS) studies, a compilation of the financial results of several hundred companies over a twenty-year period, there is a direct relationship between perceived quality and profitability. The higher the perceived quality of your product or service in comparison with that of your competitors, the more profitable your business will be.
For example, if an independent research company were to conduct a poll in your market area, presenting a list of all the companies in your business, and ask “Which of these companies do you feel is the best in this particular industry?” the company that ranked the highest in public perception would also turn out to be the most profitable in that sector. The company that was ranked second would turn out to be the second most profitable, and so on.
Here’s the question: If such a survey were done among potential customers for what you sell, where do you feel your company would rank in such a comparison? Would you be ranked as “the best,” or somewhere lower? What could you do to move higher in the rankings? What one step could you take immediately?
When Gordon Bethune took over troubled Continental Airlines, he ordered a study to determine how flyers defined quality and what they wanted most. The overwhelming answer was “on-time arrivals and departures.” This goal became his central focus for the next three years.
And it worked. Continental’s punctuality improved dramatically. As on-time arrivals and departures got better and better, sales, profitability, customer satisfaction, employee morale, and stock price all improved dramatically. By focusing on “being the best” in a specific area that was of paramount importance to customers, Continental became one of the most impressive business turnarounds of the 1990s.
Quality is not objective, existing by itself, nor is it defined by the company. It is emotional and subjective, and it is defined by your customers. Quality is what they say it is. To paraphrase a famous legal opinion, “I can’t define it exactly, but I know what it is when I see it.”
Customers define quality in two parts. First is the product or service itself. A quality product or service is something that does what it is supposed to do. It does what the customer was promised when she bought it, and continues to do it.
The second part of quality, from the customer’s viewpoint, is the manner in which the product is sold, serviced, and delivered. This personal or emotional component is often more important than the product or service itself. In one study, the researchers found that 68 percent of customer defections to the competition were not product, price, or capability determined. Instead, the primary reason for changing was a perceived indifference on the part of someone in the selling organization.
Give yourself a grade on a scale of one or ten with regard to the quality of your product or service in comparison with your competitors. Be honest with yourself. Ask everybody in the office to contribute his or her opinions as well. Ask your best customers how they would rate you against the other companies in your business. Whatever score you finally agree on, use that number as your baseline for improvement.
Once you have an estimate of your quality ranking, your goal should be to improve it by one grade. For example, if on a scale of one to ten you give yourself a score of seven, your aim will be to work yourself up to an eight. Once you have worked yourself up to an eight, your goal will be to work yourself up to a nine, and so on until you reach a ten ranking. Your long-term goal is for customers to refer to you as “the best in the business.”
The same principle of continuous improvement applies to you personally as well. Identify the most important thing you do for your business and your customers. Give yourself a grade in that area from one to ten. Ask your coworkers, your boss and your customers how they would rate you in that area. Then commit yourself to doing whatever you have to do to increase your ranking by one grade at a time until you achieve absolute excellence in your key skill areas.
Practice the Kaizen method of continuous betterment, and the CANEI method of continuous and never-ending improvement in everything you do. Never be satisfied with your current level of performance. Every day, in every way, you should look for ways to do your job even better than the day before. Whatever got you to where you are today is not enough to keep you there. Continually raise the bar on yourself. Your life only gets better when you do.