QUALITY IS CHEAPER WHAT WE DON'T KNOW CAN COST US By Robert Pahl "…An ideal quality system seeks to establish and maintain a cultural norm that ceaselessly, even eagerly, strives to notice and correct such opportunities. However, without good processes and incentives, an efficient and effective quality system is unlikely…" -Robert Pahl The Unknown Dilemma One dilemma organizations encounter in their quest to deliver the very best service at the lowest cost is that they often "don't know what they don't know." More plainly, in the absence of adequate monitoring (feedback methods and incentives), opportunity costs may occur that directly decrease the bottom line and customer satisfaction. Paradoxically, without monitoring and feedback, these costs — tangible and intangible — may go completely unnoticed due to overt and covert "rewards" that reinforce the status quo. An ideal quality system seeks to establish and maintain a cultural norm that ceaselessly, even eagerly, strives to notice and correct such opportunities. However, without good processes and incentives, an efficient and effective quality system is unlikely. Organizations without a "quality culture" are particularly vulnerable because they "don't know what they don't know." The systemic reasons for opportunity costs are often difficult to diagnose and disrupt. This requires a thoughtful and respectful strategy for shifting the culture with the least impact to productivity. The Unsuspected Defect Let's look at an example. A window and siding firm retrofitted a suburban home with new, high efficiency vinyl replacement windows. Over the course of nearly two years, a dozen service calls occurred to correct the customer's complaints about the fit and function of the windows. On windy days, these two windows "whistled" loudly keeping the home owner awake and casting doubt that the energy efficient windows were all they were "cracked up" to be. Three initial service calls focused on adjusting the fit between the window frame and the sliding window panels. The whistling persisted. The "final" diagnosis, prompted by the homeowner's (the real expert's) observation, was that the weather strip seal was deformed in the area where the wind was leaking past. The firm decided to replace all the weather stripping on the windows. A full year passed before the technician finally arrived to do the repair! Unfortunately, he showed up with only enough weather strip to fix one window. The technician noticed some missing window hardware while installing the weather strip. The technician returned (Weeks later!) with the balance of weather strip and the missing hardware. Inspecting the other windows in the house, the technician found two other windows with missing hardware. Fortunately, he had spare parts for those particular windows. Finally, the window installation appeared complete — more than two years from initial installation! So far, so painful, right? Our story isn't finished! The missing hardware was a bracket that the window-closing lever engages to force the window to compress the weather strip. Could it be that had these brackets been installed on day one that the service calls could have been avoided? Is it possible that by replacing the weather strip, the quality of the seal had actually diminished (the technician was unable to duplicate the factory "welding" of the weather strip in the corners)? For quality consultants, stories like this are maddening. No doubt, management staff, who are accountable for financial performance, are equally distressed. How might an organization learn from this experience? For starters the field technician might report his experience and findings to the "team." Then others on the team could collect the reports of similar experiences and conduct a thorough problem-solving effort to eliminate or reduce the recurrence of the most frequent and/or costly problems. The Unwilling Disclosure There may be some very real barriers for this team to overcome, however. Is there a simple, effective system for every team member and employee to inform the others about their experiences, findings and suggestions? Is feedback even welcome? What is the result when it’s offered? For example, as a result of the technician effectively reducing or eliminating installation errors, how many service calls are eliminated? Might the technician consequently eliminate one or more technicians from the payroll? Job security can be an "incentive" for overlooking, even encouraging poor quality. It’s only human that when our livelihood is at stake we might be reluctant to "shoot ourselves in the foot." If enough team members are "looking the other way" the entire enterprise is at risk. Let's not focus blame on "self serving" individuals — leaders of organizations sometimes behave in like manner: An integrated circuit manufacturer delayed upgrading their solder coating process to a more reliable solder plating process for three years until a key customer repeatedly threatened to accept only product from the manufacturer's Asian subcontractor who had already converted to solder plating. The multi-million dollar conversion was a cost the manufacturer chose to avoid, but the cost of eventually losing a key customer was greater. And lest you think this is not happening on your team, think again; it can and does happen more than you think! The difference is some teams know it and are doing something about it, and some aren't. The Ultimate Determination Long term it's in every team member's enlightened self-interest to ceaselessly strive for improvement. A short-term mindset, and a self-serving, self-preserving attitude can be very perilous. Intervention and guidance within the organization falls squarely on the leadership team. Once "awakened" the entire company will eventually benefit from a "quality culture." It takes a great deal of determination, courage and persistence to begin - and then sustain - such cultural transformations. The first step is to "take the lid off," to discover what it is we "don't know what we don't know." If significant threats to survival are perceived, you need to expect stiff resistance. Orchestrating the culture change with the least amount of pain and greatest reward to the entire team will increase the likelihood that the team will follow you. Of course, you could just wait until the competition figures it out first! Robert Pahl Changing Ways About the Author Robert Pahl has a vast amount of organization development, continuous improvement and quality system management experience: 5 years of organization development consultant for Twin Cities non-profits; 15 years quality systems management with Intel, Six Sigma "black belt;" 2 years consulting to Honeywell's Executive Education programs; 6 years co-development, training and management of Intel's change management system; and 21 years practice as advacned facilitator of continuous improvement and team building. His education background consists of a Master of Education Degree in Human and Organization Development, graduate studies in business administration, and a Bachelor of Science Degree in Mechanical Engineering. Comment on this article