Issue 5
Sunday February 13th, 2000

Conferences are mixed bags
They’re important, and some people travel as far as it’s possible to travel to attend them. They fulfill functions that can’t, really, be fulfilled any other way. They deliver new and novel insights, and they establish career-changing networks. They’re part of the remuneration package of many professionals – especially the academics. But are they really worth all that money, and are some of the papers (multiple authors, travelling from far-off universities, with an opportunity cost of about three new automobiles) really worth that much money?

So why was your newsletter editor in Sydney for the combined Qualcon 2000 (the occasional annual conference of the Australian Organisation for Quality) and the truly annual International Quality Research conference? Well, actually, because I had enough air points to get me there free, because I had a nice little paper to present (yes, yes, the ubiquitous Auckland Hospital Sta … zzzz). And – mostly – because Prof Rick Edgeman asked me.

Was it worth it? Yes. On a number of levels. Astronaut Story Musgrave opened day one with a frankly moving audio-visual (he was the audio) up-to-the-eyeballs immersion in the strangely surreal world of earth orbiting. Six-mission Story’s main claim to fame is that he Fixed The Hubble Telescope, and his narrative about why, how, and with what is transfixing – a physical expression of pure quality ... But, I couldn’t help wondering, if NASA is so smart, how come they stuffed it up in the first place. Going back to fix Hubble was a bit like inspecting-in quality at the end of the line, right?

The real work occurs in the coffee breaks
Tom Fisher inquired, in a morning tea discussion about ‘culture,’ whether it’s sensible to ask members of an organisation to live up to corporate standards and expectations that differ from the standards and expectations of society at large. Think about that. The soft stuff is hard, right? If culture really matters, and I sure believe it does, then why do organisation’s seem to pay so little attention to the away-from-work culture in which their people live? If your everyday environment doesn’t value cooperation and teamwork, then what chance is there of embedding it into your corporate behaviour? As is nearly always the case, Granite Rock has some innovative stuff going on in this area, and I’ll try to track it down for a future newsletter. Haven’t heard about Granite Rock!? Go here

Speaking of rocks
Prof Kevin Foley – a rock, the rock, in Australia’s shifting quality sands – gave the same presentation three times. Or was it four? Only if you include his farewell speech. JOKING, Kevin!

I get a bit nervous, and I’m not quite sure why, when I see Demingites writing about the SoPK (Deming's System of Profound Knowledge). As Prof Foley pointed out (in a paper titled “Revisiting the Foundations of Quality Management: Homer Who?”), “Deming asserted that his 14 points constituted a ‘theory of management’ [but] no such theory was ever demonstrated.” And that could usefully have been said a dozen times. I’ll come back to Kevin’s two great presentations in a later newsletter. If you’ve ever wondered about the theory of quality, and whether it matters that there isn’t one, watch this space.

So how about some specifics? There were about 90 individual presentations, in five parallel streams, and there’s no way we can do justice even to the best of them in a 1,500 word newsletter. The intention is to put all the papers on the Internet, ‘soon,’ courtesy of Standards Australia, and when available we’ll do a link.

In "Complain away: How customer complaints can help you improve your business processes," Jillian Mercer rehearsed some of the fundamentals of complaints management. Three points up front: Complaints are assets – if we care to listen, they tell us where our processes are going wrong; complaints are ‘any expression of dissatisfaction which requires a response;’ and complaints reveal waste.

Many organisations measure customer churn, said Jillian, but if they don’t know why customers leave, they’re driving the business without navigation lights. What customers want is well enough known – first, a relationship, then a ‘done right first time’ exchange, accessibility, responsiveness, knowledgeable people, promptness, information, follow up and no surprises. What characterises a good customer relationship? Being pleasant, courteous and helpful, recognising the customer by name, recalling past transactions and remembering past preferences …

Dissatisfaction rework can be expensive – a front-desk resolution may cost say $5; two attempts might cost $50; three, $100; and so on. Fixing things the first time is cheapest, whatever the first time cost is.

Complaints are an asset, but to get value from them there has to be a process for capturing and using the information they provide. Easy to say, hard to do. How many organisations, known to you, can tick all these:
- The complaints process is accessible and well-publicised
- It’s simple and easy to use for all staff and customers
- Managers are always up to date with all complaints stats
- There are hard deadlines for resolution, known to the complainants
- The process is fair to all
- It’s confidential
- It’s effective – complaints don’t slip through the cracks, or get retired, unresolved, after a few weeks.

How do you stack up? I‘ve been involved in some pretty smart organisations, at least one with glossy Customers’ Rights complaint brochures all over the place, which couldn’t, honestly, say yes to all those. It’s not rocket science, and most organisations pay lip service to it. Is now a good time to review what your organisation does?

Jillian listed a series of diagnostic questions everyone, but particularly process owners, should be able to ask, and find answers for, then finished with two key points:
Verbals – never ask a customer to put a complaint in writing. Responsibility for sorting the problem out is yours, not theirs. S/he’s already done you one favour, don’t ask for more. I guess if your process needs a written record, it’s up to whoever receives the complaint to commit it to paper (or a digital form).
Get in first. Solve problems before they become complaints – by staying close enough to your customers to ask frequent questions and hear their answers.

For more on managing complaints, satisfaction and dissatisfaction, including Baldrige-winning best practice from Solectron, IBM Rochester and Granite Rock, go to the exhibits

Quality and the new economy
We’re going to keep returning to the subject of e-quality, because the internet economy is becoming so important (according to Business 2.0, January 2000, p 182, at $301 billion it’s already bigger than the energy and telecommunications sectors, and bigger than the GDP of Belgium), and because applying quality principles and practices to achieve performance excellence in that arena is such a challenge (see Newsletter 3).

What is the internet economy? Business 2.0 says it’s made up of six market sectors: Internet access, consumer retail, financial services, business services, media and entertainment, and supply chain businesses. It seems to us that because supply chain management (SCM) is a core business process, common to all organisations which have suppliers and customers, it’s an excellent place to explore new economy performance issues. As Walid Mougayer says, “In the vast tract of on-line business to business ecommerce – projected to speed past $1 trillion in annual revenues by 2003 – supply chain management is slowly taking centre stage: AMR Research of Boston predicts the on-line SCM market growing 48% annually over the next five years.”

Here’s some serendipity: two papers at the Sydney conference dealt with supply chain quality. Let’s start with Chris Brendon, managing director of International Quality Management (email: and author of “The Impact of Quality on Supply Chain Management.” Chris made a number of key points: Modern technology and recent developments in software enables open architecture supply chain management that delivers superior business performance – improving profitability by as much as 50%. It’s not a zero-sum game – everyone benefits. Shareholder value is maximised by improved revenue, reduced cost, increased profitability, lower inventory investment, better fixed assets utilisation and superior ROI – for all members of the chain. Customer value is improved by faster delivery, reduced cycle times, competitive pricing and guaranteed quality. Relationship management is a key capability.

Where do supply chain processes feature in the Baldrige criteria, and what’s the role of the criteria in judging supply chain performance? Leadership and strategy are part of the equation, but the central category is process management (category 6), particularly 6.3, supplier and partnering processes

A quote to emphasise the importance of supply chain quality in ecommerce – from William Lipsin, CEO of Ironside Technologies – “Unlike real estate, location is becoming progressively less relevant. The three critical factors for the internet age are logistics, logistics, logistics.”

Incidentally, the 2001 Management Research Conference theme, hosted in Melbourne Australia, will be something like, you guessed it, “Quality and the Emerging Organisation.”