The Toyota Way? Brand-Businesses Need A New Quality Revolution
What has happened to quality? This is no trivial question. When you think about all the quality issues plaguing products and service, you recognize how shocking is the current state of quality. Brand-businesses need a new quality revolution.
Think about the state of quality:
Of course, there is Boeing. Which is a horrible situation. But, not a total surprise when you read about the financial engineering that created the current Boeing brand; financial shenanigans that allowed Boeing to morph into a business where seemingly maximizing shareholder profits over customer safety took priority; where seemingly executives believed you can cost-manage your way to enduring profitable growth. Poor quality components from Boeing’s supplier was only part of the problem. At Boeing’s manufacturing plant, safety problems were just pushed down the line, until no one took responsibility or the problems were forgotten about. Even with the tragic deaths, the safety problems lingered and grew. It took a door falling off in-flight to put the spotlight on just how serious are the safety issues.
The FAA is allowing Boeing to create its own safety and quality plan. The FAA told The New York Times, “ We need to see a strong and unwavering commitment to safety and quality that endures over time. This is about systematic change and there’s a lot of work to be done.”
But, Boeing is just one example.
There are driverless car incidents. There are outbreaks of E-coli produce. There are multiple salmonella and listeria contamination issues with some cheese products. There are recalls of Fiji bottled water. It seems as if there are bacteria and high levels of manganese in at least 1.9 million bottles of (recalled) Fiji water. Even Cheerios, a beloved cereal brand has problems with forever chemicals.
Bayer is still figuring out how to fix the Round-Up issue, and not just financially. Sure, there is a financial problem; but court cases infer that users developed cancer and/or died from Round-up’s usage.
3M has had to pay serious fines for its problems with military earplugs. It is disappointing. The brand so closely associated with innovation created ear plugs for our military that actually do not work, apparently causing hearing loss and worse. How does this happen?
Philips, the maker of toothbrushes and medical systems, designed CPAP machines that actually harm users. When users initially complained about noise from CPAP machines, Philips used noise abatement insulation for the CPAP machines. But, noise abatement insulation breaks down in the machine. The machines become filthy with bacteria. People breathe this in at night, harming users. We learned that 560 users died. Reports state that Philips hid the complaints and deaths until it could not hide anymore.
Court cases seem to reveal that J&J, which recently spun off its consumer products, such as Band-Aid and Listerine as well as J&J baby products into a company called Kenvue, used asbestos in its talcum powder for decades. Women became ill with ovarian cancer. Women died.
The FDA warned doctors not to use Getinge surgical heart devices as these apparently do not work and can cause death.
Starbucks asked Toyota for help with quality control in Starbucks operations. It appears as if the very long wait-times for a Starbucks order is upsetting customers and impairing the Starbucks brand.
GM’s Chevy Bolt, an original EV offering at an affordable price was shut down due to unfixable battery fires. Now, GM is resurrecting the brand again. Do we know what GM doing differently to make Chevy Bolt vehicles that do not catch on fire?
Ford recalled its new Maverick pick-up trucks due to tail light malfunctions. The malfunctions are in the vehicle’s electrical system. Ford determined that the malfunctions can cause accidents; accidents that can be serious.
A week does not go by without a recall of something, even cinnamon. Cinnamon from certain manufacturers has contaminants. Certain applesauce products have recalls.
What has happened?
The manufacturing revolution that maximized quality and deified quality proponents, ensured that production focus on zero defects. The quality revolution embedded the thought that quality is everyone’s responsibility. Toyota used the quality principles of Dr. Edward Deming and brought cars into America that were beyond reliable.
There once was a time when new cars had screws and bolts on the floor of the vehicle. Or, your new car would not start. When GM introduced the Chevy Blazer, the roof leaked. So, when Toyota broke into the US automotive market with cars that looked a bit strange but started each and every time, we Americans were stunned.
Toyota is still the quality leader in manufacturing and mindset. Lexus and Toyota are the top two most dependable, reliable vehicles in the 2024 J.D. Power survey.
Today, it is as if we have reached some threshold on quality. We, as consumers, seem resigned to products and services with defects. We do not flinch. We live in a beta-test world where we are the guinea pigs. We just accept the quality issues and move on. It is as if no one cares about quality anymore.
Looking at the article listings for Harvard Business Review, there has not been an article about quality, quality processes or quality in manufacturing since 2019. Just one article in 2019. Before that, one article in 2014.
It used to be multiple articles a year. In the 1990’s, there were not only articles in HBR, but HBR Press published books and compendiums of articles on quality. At HBR, there were lots of books and articles about quality customer service, as well. James Heskett, W. Earl Sasser Jr. and Leonard Schlesinger were frequent contributors on service quality up until 2008.
To back up, a bit, there once was a major quality revolution in the US. There were a handful of quality proponents who led the quality revolution: Philip Crosby, Joseph Juran, Edward Deming, Peter Drucker.
Edward Deming was a statistician and the president of the ASA, American Statistical Association. He was run out of the USA because he had a radical view about quality. He believed that quality was consistent conformance to expectations. Using that definition, the highest quality restaurant would be McDonald’s. This caused derision. Dr. Deming’s view was, “Build quality in, don’t test it out…”
Many manufacturers believe quality control is all about a testing and inspection systems. They see quality is an evaluation tool. Which do we want: quality evaluation or quality management? These two are very different mindsets. Physical and technical compliance are not unimportant. But, quality is more than that, much more.
Dr. Deming said quality control is not a department. He said quality is an organizational commitment. It is not someone’s responsibility. It is everyone’s responsibility. He said that every employee is in charge of quality. But, ultimately, quality is determined by customers in use, not by occasional inspections and audits. In other words, the customer has the “say” on quality.
Dr. Deming’s objectives were 100% customer satisfaction, zero defects and zero variability from expectation. These are conditions that most manufacturers and service providers adhere to now.
You can boil down the ideas of Juran, Deming, Drucker and Crosby as follows:
- Crosby… Conformance to requirements and customer specifications
- Juran… Extent to which a product successfully serves the purpose of the user
- Deming… Efficient production of the quality that the market expects
- Drucker… Quality is not what the supplier puts in; it is what the customer gets out
These ideas had a profound effect on manufacturing in the 1950s, 1960s, 1970s and had a major influence on quality work conducted in the 1980s and 1990s.
In 1987, the US Congress established The Malcolm Baldrige National Quality Award (MBNQA) to raise awareness of quality management and to recognize U.S. companies that implemented successful quality management systems. The award was and continues to be the nation’s highest presidential honor for performance excellence.
So what is quality?
Quality is consistent conformance to customer expectations. Quality is not what the brand promises. Quality is not what the brand intends. Quality is perceived and defined by customers. Living up to expectations consistently is how a brand becomes a trusted brand. Building trust builds brand power. Quality is a condition for generating enduring profitable growth.
A quality brand is more than a quality product or service. A quality brand is a quality product or service marketed and managed in a quality manner. Quality must permeate every aspect of every contact with the customer. Perceived quality is overwhelmingly the most important determinant of brand strength.
Research consistently shows that brands perceived as high quality have double the earnings of brands seen as low quality.
In 1990, a marketer named Peter Doyle published an article on research he conducted. He said: “Quality generates higher margins in two ways: 1) quality boosts market share, which results in lower unit costs through economies of scale. And 2) by creating a differential advantage, quality permits higher relative prices.”
We know through other quantitative data that high quality brands are the strongest price competitors. They can hold a high market share and higher prices.
Quality people, quality results, quality experiences, quality attitudes, quality behaviors, quality profits allow a brand to attract and retain quality people who produce premium quality branded experiences that users love.
As Phillip Crosby said, quality is not an investment in the future; it is a present day cost of doing business. Quality does not increase costs; it reduces costs. Quality does not cut into profits; it increases profitability. This is because quality leads to increased customer satisfaction. And, this leads to increased customer loyalty; reduced price sensitivity; higher repeat purchase and loyalty; leading to more sales. In other words, quality does not cost money. Quality makes money. Quality leads to profits.
Failing to consistently live up to brand promises costs money. Delivering quality does not cost a lot of money to do, but costs a lot if you do not do it. The answer: Continuously improve.
Quality is critical. But, quality is not one thing. Quality is different on the manufacturing line than it is in a call center or at a hotel front desk or behind the cash register at a fast-food restaurant. Having a solid quality control process and quality standards along with engaged employees and an organizational commitment to quality are essential.
In 2007, the president of Toyota was interviewed for an HBR article. Here is what Katsuaki Watanabe said:
“To me, becoming number one isn’t about being the world leader in terms of how many automobiles we manufacture or sell in a year, or about generating the most sales revenues or profits. Being number one is about being the best in the world in terms of quality on a sustained basis. I attach the greatest value and importance to quality; that lies at the root of my management style. It’s critical for Toyota to keep making the highest-quality vehicles in the world—the best products in every way, manufactured without any defects. Unless we enhance quality today, we can’t hope for growth in the future. That’s why we are investing in the development of new technologies, new processes, and human resources. My top priority is to ensure that we do that resolutely, sure-footedly, and in a thorough fashion. We’ve never tried to become number one in terms of volumes or revenues; as long as we keep improving our quality, size will automatically follow.”
