Magazine article Management Review

Think Strategy When You Think Quality

Magazine article Management Review

Think Strategy When You Think Quality

Article excerpt

Those of you who have been followmg my thoughts over the past three issues will remember that I have criticized typical quality efforts for, among other things, being too narrow, too technically focused and too internally biased.

Instead, let me propose that for optimal organizational effectiveness, quality should always be considered within a broader, deeper context. Specifically, managers would be wise to think strategy when they think quality. Note the words I use. I did not say that quality should play a key part in a company's competitive strategy, because we already know that is absolutely necessary. Instead, I said that managers should think strategy when they think quality. Strategy involves a big-picture conceptualization of the whole organization and its capacity to anticipate and respond to dynamic market forces. Therefore, when managers think strategy, the very meaning of quality changes: It becomes a much richer, more powerful market-driven concept, which has big implications for managers' priorities and actions. This new, improved concept, so to speak, has three fundamentals elements, and it is those three elements that I would like to share with you now.

1. Quality is the total experience that a customer has with the vendor organization. Nowadays, reliability, accuracy and flawless functional performance are mandatory features of products and services. When a defective metal washer requires Chrysler to recall more than 4,000 cars, including the new LH sedan billed as the "Car of the Future," the loss in the reputation and integrity of the firm exceeds the not inconsiderable cost of the September 1992 recall itself. But reliability, accuracy and performance are only part of the process. Customers are implicitly starting to apply the standard of "zero-defects" to the vendor organization itself, not just to the vendor's output. That is, customers' perceptions of quality are determined by the vendor system's performance during each vendor-customer interaction throughout the entire activity cycle experienced by the customer.

The actual products and services that your organization ostensibly "produces" are simply one element embedded in the customer's total experience with your company. A vendor who sells impeccable products but fouls up in activities revolving around, say, contract negotiation, after-sale service or responsiveness to unanticipared requests will not receive high quality marks from customers.

Xerox found out that customers expected their copiers to be troublefree and easy to use. What was particularly important to them were issues related to installation and invoicing, that is, how short the order-turnaround cyde was, how quickly a large machine could be up and running and fully functional, how quickly an accurate bill could be presented, and how quickly everyone on the customer site could be trained to work the machine and fix minor snags.

Without a superb execution of the latter elements, discussions of quality were irrelevant. Note that the latter elements are strategic in scope insofar as they necessitate management decisions focused more on organizational priorities and resource allocation than on technical specifications and conformance indices.

This trend is emerging in all industries. Computer companies have learned that with the ever-increasing commoditization of the hardware, "softer" more intangible customer experiences become essential for determining perceptions of quality. These variables include ease of integration with existing systems, response time in obtaining additional features and components, training and the availability of genuinely user-friendly manuals, software and other teaching tools. Similarly, banks and hospitals have learned that the organization's capacity to provide customers with fast decisions, a minimum of waiting, personalized caring information and advice, and front-line responsiveness and empathy is an essential (some research studies suggest even more essential) to customer perceptions of total quality as are the actual technical properties of the financial package or medical intervention per se. …

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