The Standard is the Standard
"Our job is to win. Football is our game, our business is winning, and our intentions are to handle business. That's what 'The standard is the standard' means every time I say it." - Mike Tomlin, Pittsburgh Steelers Head Coach
What is your organization's standard? In your organization, what does quality mean? Is it just the standard, or is it the standard? Does quality mean what you must do, or does it gives you a competitive edge? Whenever I think of a Volvo, I immediately think of safety. When I think of Toyota, I think of quality and reliability. I think about toasters when I think of my bank. To put it another way, I think about something different from quality.
A Chief Quality Officer (CQO) at a supply chain vendor recently made me wonder why I had never met one at a fintech company. It's simple. It doesn't exist. A Seat at the Table, by Mark Swartz, posits that organizations without a CIO on the board will destroy business value because they do not weigh in on strategic business decisions. A company without a CQO, therefore, says what about the organization?
CQOs are found at Volvo, Toyota, and almost every other high-quality manufacturing company. The top five US banks do not have CQOs, however. Are manufacturing companies the only ones concerned with quality? Does quality need a seat on the board of non-manufacturing organizations or a position that weighs in on strategic business decisions? When lean manufacturing became lean everything, how did quality get left behind? Dr. Deming made his thoughts about quality in all industries abundantly clear in his last two books, Out of a Crisis and New Economics. Each of the top five banks has a chief risk officer, auditor, or compliance officer. Based on my experience, these positions are primarily defensive. My book, Deming's Journey to Profound Knowledge, discusses the Ford Mazda transmission story. Ford purchased a quarter of Mazda in 1979. This is taken from the book:
Ford began manufacturing an identical transmission to Mazda's. Customers and dealers, however, began saying the cars with transmissions made in Japan were better than those made in America. This was clearly impossible since the transmissions were made to the exact same specifications. Ford chalked it up to people believing (rightly so) that anything made in Japan was superior to anything made in the USA. Upon further investigation, though, Ford discovered something intriguing. They took the transmissions apart and compared them, part for part. The American-made transmissions had a quality tolerance of one-eighth of an inch—exactly what the specs called for. The Mazda-made transmissions, however, had a tolerance of one-sixteenth of an inch. That is, the Japanese delivered twice the quality called for.
The supply chain vendor I recently visited is primarily a software company. I discussed with their CQO how they view audits and audit findings as opportunities. According to John Allspaw of Adaptive Capacity Labs, incidents are unplanned investments. Could audit findings be treated the same as unexpected investments by an organization? Quality is a competitive advantage for this supply chain vendor, whereas the standard is standard.
