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What is Quality?
David Straker
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Testing the definition

A good definition will withstand all kinds of serious criticism. What about those people who need things? Staying in business means keeping them all reasonably happy, so this works. What about growth? This is an interesting question: why do so many companies seek to grow constantly? If shareholders demand growth, and will take their money elsewhere otherwise, then it is still about staying in business. If our competitors grow, we need to grow to stay in the game.

Growth can be a management trap: if it leads to over-extension or unmanageable diversity, such that the business fails, this is not a quality situation. To quote Ricardo Semler1: ‘The biggest myth in the corporate world is that every business needs to keep growing to be successful. That’s baloney. The ultimate measure of a business’ success, I believe, is not how big it gets, but how long it survives.’

One of the frustrations we meet in quality is the focus on longer-term company survival; we know that products containing defects will lead to dissatisfied customers. We know that incomplete customer knowledge impairs our ability to correct external problems and repair internal processes. But we come up constantly against managers who are working on short-term problems, such as getting a delivery out today or pacifying an angry customer on the phone. So who is right, given our new definition of quality? The answer is both. Our perspectives may be different and we can both benefit from sharing one another's concerns, but we both want to stay in business, which means focusing on both the short- and long-term.

How do we stay in business?

If quality means staying in business, how do we do that? Perhaps there is no single, simple answer, but by exploring the issue, including going back-to-basics, we can take a few steps in the right direction.

What is business?

 While we are rushing in where angels fear to tread, perhaps we should scrutinise what we mean by ‘business’. At its most fundamental, business is barter: I will swap you two sheep for one cow; I will invest in your business if you give me a good chance of getting rich quicker than the bank. What makes barter work is that we value things differently, for example - I have plenty of sheep but no milk. Business is not so much barter as value exchange.

 If business were just about customers and ourselves, it would be easy. We would find what they wanted, make it and sell it to them. But it is not that simple: our problems begin when we find we are at the crossroads of many exchanges of value. There are shareholders, employees, customers, suppliers, partners and governments, all engaged in a complex web of value exchange.

 To make things worse, we cannot make all of the people happy all the time. With a limited pool of resources, we try to keep customers happy, while being profitable enough for shareholders, while paying our suppliers (eventually), while paying for the new employee rest rooms. Sorry folks, but there is not enough cash to go around. Like any paymaster, we will need to make some tough decisions.

Staying in business then, means playing a dynamic balancing game, optimising value exchange, with an awareness of the very real resource limitations with which we work. This gives us a second level of detail we can use for our quality definition:

Quality means
optimising the whole system
of value exchange


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