Do companies fail because of a lack of a robust quality system? During a recent quality discussion, a quality engineer asked a group of quality professionals if anyone knew of companies who had gone out of business due to quality problems. The group’s first reaction was “absolutely!” When asked to name examples, however, there was no consensus.
Certainly there have been companies who have experienced product or service failures due to poor quality. Most of us have experienced failures of one sort or another traced to poor quality. However, even though there have been some significant issues in recent times, has any entire manufacturing company gone out of business strictly because of a poor quality program?
In 2009 Toyota recalled nine million cars due to a removable floor mat that could cause accelerators to stick with some leading to crashes and loss of life. This was certainly tragic but at the root of the problem was a failure to adhere to their quality principles of employee engagement and sharing best practices.
In 2010 the world watched the Deepwater Horizon oil rig explosion, which ranks as the biggest manmade environmental disaster in U.S. history. The explosion killed several on-board workers, and discharged four million barrels of oil into the Gulf of Mexico before being sealed. There was much finger-pointing between the three corporations involved but each company broke the central rule of quality which is to understand internal and external customer needs, and strive to exceed them. In order to save time and money a decision was made not to test the cement around the well. These organizations seemed more concerned with deadlines, costs, growth, and other considerations not relating to the customer of their quality assurance management system.
More examples were discussed but there was no evidence that companies failed solely because of poor quality. Certainly many have had individual products fail because poor quality was a contributing factor. Over the years, some of these companies went out of business, not solely due to poor quality—poor management decisions, ineffective marketing strategies, bad economy, pricing strategies, and customer service contributed heavily to their demise.
On the flip side, many companies with good to high quality products didn’t survive either. Therefore, does a good quality program, or lack of one, have an effect on company success? Certainly Toyota, BP, Transocean, Halliburton, and others have documented quality systems but that didn’t prevent these events from happening. They still cost billions and resulted in loss of life.
Quality can make a company or product successful. Ask any Malcolm Baldrige Award winner whether quality made a difference in their success. From first-hand experience as an examiner there are numerous stories and observations of quality being at the forefront of every decision.
The effect of a good quality program can be quantified. The leading companies with quality reputations readily point to metrics which allow them to track non-quality costs and highlight areas for improvement which lead to greater shareholder value.
A good quality program, however, can’t be placed in a vacuum. It’s not good enough to build a better, more reliable product. A company has to support its investment in their quality program. Companies noted for quality achievement do a lot of things well: they anticipate and respond to the market, serve their customers well, develop and recognize employees, and invest in new technologies. The attention and attitude that comes with developing a good quality program is carried out in all other aspects of a company and its actions.
A good quality program is not the only guarantor of success. When a product or company fails it is not due to poor quality alone. Sometimes, it’s all in how an organization defines a quality problem.
Years ago, I adopted a philosophy there was no such thing as a quality problem! Most often when organizations think in these broad terms the real issue is overlooked. When quality problems arise it sometimes causes scrutiny in all the wrong places, more specifically a breakdown in the quality system, but that just diverts the real problem.
It is more fruitful to starting thinking that poor product or service quality is due to an engineering problem, material problem, supplier problem, manufacturing problems, etc. This causes the organization to focus on the real problem.
Management leadership drives the quality system and is the key pillar of business stability and success. Failure to adhere to guiding principles can lead to cataclysmic and indeed tragic consequences. It’s infinitely more complex than just quality.