Forty years ago, Quality Assurance (the predecessor to Quality magazine) profiled the quality initiative at Motorola, calling it a "live and vibrant issue." At the time the story was published, Motorola had already become a leader in military, space and commercial communications and was a growing manufacturer of consumer electronics.
Today, quality continues to be a live and vibrant issue, and as Motorola's business has evolved, quality has evolved with it. During the past 40 years, the quality philosophy at Motorola has expanded from an initial focus on the products we manufacture to one of excellence in every facet of our business.
When Quality Assurance first profiled the company, it was clear that Motorola had a commitment to quality in every aspect of product development. This was demonstrated through a three-pronged approach: quality of forethought, quality of workmanship, and quality of objective self appraisal. In other words, the quality program took into account all three stages of production: pre-production, production and post-production. This approach undoubtedly secured Motorola's place at the forefront of American business for the next several years.
During the 1960s, Motorola began to expand into international markets and gradually began shifting its focus away from consumer electronics. The company sold the color television receiver business in the mid-1970s, which allowed us to focus our energies on the emerging high-technology markets in the commercial, industrial and government sectors. This new business focus required a new approach to quality, and we eventually recognized that in order for the company to grow, the quality initiative would have to grow with the business.
In 1980, Motorola took the first step by establishing the position of Corporate Quality Officer. In 1981, the Motorola Training and Education Center (MTEC) was established, providing employees with instruction and coaching in quality process and participative management skills. In 1989, MTEC became Motorola University, an institution that remains an integral component of the Motorola culture today.
By the end of the 1980s, Motorola had grown into a worldwide supplier of cellular telephones. But, the Japanese were still considered the undisputed leaders in the electronics market. A 1986 benchmarking study revealed that while we had made significant strides in quality, we needed to prove that we could compete with the Japanese by creating products that were of equal and higher quality. It was out of this realization that the Six Sigma quality initiative was born in 1987.
The investment in Six Sigma paid off, and in 1988, Motorola was the first large companywide winner of the Malcolm Baldrige National Quality Award, awarded by the U.S. Congress to recognize and inspire the pursuit of quality in American business.
Today, Motorola is harnessing the power of wireless, broadband and the Internet to deliver embedded chip system level and end-to-end network communication solutions for individuals, work teams, vehicles and homes. Our goal is to make business and life simpler, smarter, synchronized and safer by creating leadership products and services that put intelligence everywhere. Our quality program has evolved to support this goal and is now a program of Performance Excellence, based on the Baldrige model. This model demands a commitment to quality across the board--through visionary leadership, organizational learning, company agility, employee engagement, shrewd management and a focus on results. While Six Sigma remains at the heart of our internal processes, our vision has widened to ensure that excellence is permeated through every aspect of our business.
Before Six Sigma, quality levels were measured in percentages, or parts per hundred. However, as modern technology grew more complex, it became clear that older standards of quality no longer applied. Motorola invented Six Sigma to raise the bar and focus the quality debate on parts per million, and in some cases, parts per billion. Today, through Six Sigma, our quality target is 99.99966%, or 3.4 defects per million opportunities. In other words, we strive to optimize our production processes by ensuring that there are six or less standard deviations within the specifications of any given process.
As in the 1960s, Motorola still works to build quality into our products up front. How-ever, the Six Sigma approach encompasses all of Motorola's internal processes by providing a structural approach to continuous improvement. We think of this as "six steps toward excellence." They include:
Using the Six Sigma approach, Motorola is continuously working toward capturing, measuring and eliminating defects in every process. Six Sigma also allows us to maintain our focus on the processes, not the people. We believe that if processes are designed to be flawless, people will perform flawlessly using the process.
Motorola views quality from a customer perspective, meaning we have only one opportunity per each product we deliver to favorably impact a customer. If the product doesn't meet expectations, we run the risk of losing that customer. It isn't enough to simply meet industry averages--every single product that reaches a customer should exhibit a uniform standard of quality.
From 1987 to 1999, the first twelve years of Six Sigma at Motorola, our business saw significant results. By 1999, Motorola had eliminated 99.7% of all in-process defects. The Cost of Poor Quality was reduced by more than 84% on a per unit basis, and cumulative manufacturing cost savings totaled more than $18 billion. At the same time, employee productivity increased dramatically--up 12% annually.
Total Customer Satisfaction
Six Sigma is vital to ensuring a commitment to quality throughout our internal processes, but it's only the first step. To ensure that Motorola is able to continuously improve customer satisfaction, we take a holistic approach to quality and have looked for ways to build it into the entire fabric of the organization. This means not only meeting customer expectations by delivering high-quality products that are priced competitively, but also shaping customer perceptions by creating an environment of trust through customer communication and engagement. We call this Total Customer Satisfaction. Because quality is driven from the outside by the voice of the customer, we regularly measure customer satisfaction and ask for customer input in developing action plans and implementing procedures that will deliver a superior experience to customers.
This commitment has paid off, and our studies show that customer satisfaction rates remain high. Currently, 79% of our customers say they would continue to purchase Motorola products and services in the future, and 75% say they would recommend Motorola to colleagues. Further, 63% report that they are very satisfied with the ease of doing business with Motorola. By anticipating customer needs, demonstrating innovation and gaining customer loyalty, Motorola is continuously striving to build relationships with customers that are built on a solid foundation of trust.
Focused on the future
As technology continues to advance and the economic landscape becomes more challenging, Motorola will continue to focus on providing customers with products that make their lives smarter, simpler, synchronized and safer. We believe the best way to accomplish this is through the successful implementation of the Performance Excellence Business System. The program changes the way we manage our organization by becoming even more focused on the customer and by placing renewed emphasis on delivering business results. The vision of Performance Excellence is realized through seven key areas:
Leadership. A commitment to quality at the top of the organization is crucial to our success.
Strategic Planning. Quality is a key factor in developing Motorola's business strategy.
Customer and Market Focus. Our customers and the quality they demand are at the heart of any strategic plan Motorola develops.
Fact-Based Decisions. Motorola's decision-making processes are driven by facts that are derived through obtaining and analyzing the correct information.
Human Resources. Attracting and retaining good employees and creating a work environment that emphasizes commitment to customers is vital to maintaining high levels of quality.
Process Management. Through Six Sigma, we maintain our focus on continuous improvement of all of our internal processes.
Business Results. Delivering results benefits Motorola, our customers and our shareholders.
Motorola's quality journey has not been without bumps. Along the way, we've learned some valuable lessons that have helped us improve our commitment to quality. These include:
We believe that Motorola's quality must meet and exceed that of our competition; it must be used to drive bottom-line performance and sustain our competitive advantage. As we move deeper into the 21st century, we will continue to examine Motorola's commitment to quality and search for ways to continuously improve our business and relationships with our customers.
Today, our key initiatives are to improve profits, refocus on our carriers and customers, improve our implementation of the Performance Excellence Business System, and, of course, continue to focus on improving quality. We believe the next 40 years of Motorola history will result in as many innovations in quality as the last 40 years. We hope to share those with you, too.