THE POWER OF MANAGEMENT INNOVATION AND OF TOTAL QUALITY

      Dr. A.V. Feigenbaum

     President and CEO, General Systems Company, Inc.

     Pittsfield, Massachusetts

     ASQ World Conference on Quality and Improvement

     Minneapolis, Minnesota

     May 17, 2009

     Thank you, Spencer, for the very kind introduction.  I was of course greatly pleased and highly honored to receive the Medal of Technology and Innovation.  And while we of course feel honored personally, it is an Award that Don Feigenbaum and I - and all of us in the General Systems Company - consider as recognition for the work of the quality profession fully as much as for ourselves - especially the work of the American Society for Quality and more recently also that of the International Academy for Quality and their respective members here and throughout the world.

     We are particularly grateful also to McGraw-Hill's Professional Book Division  - which has been publishing and supporting our work from the very beginning right through to today - for its kindness and generosity in making available to this Conference commemorative copies of our new The Power of Management Innovation book.

     And we are very pleased about how the Medal award has been helping to bring powerful and widespread attention to the emphasis upon management innovation with a total quality foundation as one of the centerpoints for America's economic recovery and the return to strong and successful business growth today.

     What has been driving all this are economic, human and technology changes that are creating one of the most turbulent and challenging impacts in memory upon quality throughout business and industry not only in America but also worldwide.

     To summarize them very briefly, these impacts are:

     - The increasing speed and aggressiveness of quality competition in global fully as much as national terms;

     - The customer demand that threads through all of this for a higher and higher standard of quality value in the products and services they buy - not just a reduction in the number of defects in them;

     - The rapidly increasing quality impact of information technology upon both corporate activities from global distribution and supply and computer based purchasing of products and services to the rapidly growing utilization of information technology and the internet by prospective consumer and business buyers themselves.  For just one of the many examples, the actual buyer experience with the quality of products and services that's reported in the internet's so-called blogs and chatrooms has been becoming a far bigger influence upon customer purchasing decisions today than the advertising and sales promotion provided by the companies producing the products and services themselves. 

     Moreover, the strong attention that companies are placing on looking in all parts of the world for improved ways to help accomplish the demand for customer value and productivity improvement results has created a further major additional strong dimension for global management quality focus today.  It is emphasized in the rapidly growing multi-nationalization by many companies of their total quality management activity in the development and design, the production, the supply, the assembly, and the systematic quality attention and information management of their products and emphasizing new and even more systematic quality attention to product safety and to product integration.

     Taken together these issues emphasize why today's global corporate leaders have increasingly come to recognize from their experience that, in global terms, quality fully as much as being a technical subject is also a fundamental way of managing throughout their companies today.  It has become a basis for systemically guiding and empowering and supporting the constant pursuit of product quality excellence by the men and women throughout their organization and of strong and continuing innovation in production, engineering, sales, and other processes that support this excellence throughout their company itself. 

     Very importantly - these impacts also recognize the basic principle of global business experience today that what makes quality value better in any part of the company organization makes quality value better in every part of the organization - what in General Systems we call the domino effect of quality.

     It's the basis for the management innovation focus upon total quality through which today's corporate leaders generate the emphasis upon the customer product and service value leadership that's a lock on their current as well as future quality capability, on their operating cost leadership for the company's economic strength, and on their empowerment of their company's culture of superior performance to maintain the customer satisfaction emphasis through which the company drives its total quality management initiative and the corresponding profitability and growth that it creates.

     The message from the experience of the strong and successful companies such as these is that for them quality has become what can best be described as a global language for their businesses.  Fundamental to competitive strength of these companies is how effectively they understand and implement this language of quality throughout all parts of their operations.

     And this now brings me to discussion of the subject of our General Systems Company's experience regarding emphasis upon management innovation with a total quality foundation in companies in America and throughout the world with emphasis upon the processes that are keys to this competitive quality leadership strength for successful companies today.  Five of these key areas include:

     First - The companies' better and more powerful management innovation quality initiatives for the quality strength of their product development and introduction that emphasize and integrate consistent customer value performance throughout the company's entire operations.

     Second - The companies' productive quality management of supply and purchasing that especially deal with today's internationalization and outsourcing emphasis. 

     Third - The companies' insistence upon a very high level of quality training in all of their major activities, recognizing that only a very high level of quality practice and attention can assure the consistently high quality value required by today's demanding consumer and industrial customers.

     Fourth - The companies' emphasis upon explicit measurement and management of the economics of quality and its costs in terms that recognize the financial power driven economics of the company quality processes.

     And Fifth - The new character of the strategic as well as the operational hands-on management leadership of quality itself in the strongly successful companies today.

     I'd like now to review our experience in these areas starting with the more effective quality management in these companies of their emphasis upon speedier, and more systematic quality processes for the development and introduction of competitively strong, high customer value new products in the rapidly changing global markets we have been discussing.

     Our experience shows that a key to this result is their emphasis upon assuring the clear quality systems engineering integration of their development, and design processes in today's internationally driven quality value terms.  This is quite different from the practices of earlier years where these processes, while well intentioned and often well constructed, could be basically separate, primarily technically led islands in themselves without fully effective bridges to integrate the activities with other key quality processes throughout the company's international quality network.

     The integration of these processes is also clearly and consistently guided in these leading companies today by their careful and consistent attention to systematic current time customer quality value measurement throughout the company's markets.  This data provides the guideline for immediately requiring, when necessary, important new design practices in the product's development to avoid any negative impacts upon customer value satisfaction.  Our experience shows that this systemic quality value discipline creates the product and service strength of today's quality value leaders from the smallest companies to the largest and strongest.  They always have their finger systematically on the current quality pulse rate of their markets without being blindsided by the competitive quality improvement changes of their competitors.

     This now brings me to discussion of our experience in the second of the key areas of competitive quality leadership strength - the effective quality management of supply and purchasing in today's increasingly highly complex internationally oriented supply, procurement and outsourcing emphasis by leading companies.

     This activity today heavily focuses upon improving the company's capability to establish much better and more productive partnerships - that's the key objective - with its suppliers both globally as well as nationally.  This activity is very different from the old primarily single dimensioned "negotiate and squeeze them down" emphasis that was a principal characteristic of some of the more limited primarily cost reduction directed and localized supply practices of the past.  Instead, emphasis upon supplier flexibility, willingness and ability to provide quick quality partnering help to the company's products and services is now systematically upon obtaining it through greater quality-emphasized effectiveness and efficiency in the supply relationships.

     Let me now discuss our experience in the third of these areas of quality management driven emphasis of leading companies - the better and more consistent quality motivation of their human resources throughout their global networks as a foundation basis for their quality leadership. 

     It's far different from the earlier practices of some companies characterized by fireworks displays of management speechmaking, well packaged motivation sessions and well structured DVD presentations.  But when, as an employee you returned to your job, you still were faced with the ambiguous quality practices and departmental walls that made significant quality improvement slow and ineffective and about which effective improvements were not being focused nor taking place and which made personal quality responsibility very difficult to maintain and assist and assure.

     In today's corporate leaders, emphasis is instead based upon senior management support, emphasis and personal leadership of practices that encourage and develop and utilize the fundamental quality knowledge, skills and attitudes of the men and women throughout their organizations networked as  learning organizations for genuinely constant quality improvement.

     The new quality leadership emphasis is creating the power of an environment of trust, of openness and of honest communication for encouraging the development of what we have called individual quality improvement entrepreneurs. 

     And it also means systematically providing full opportunity for continuing and rigorous quality improvement by providing the men and women throughout the company's operations with the quality tools and processes and support that help them develop their own forms of quality analysis and of teamwork and of benchmarking improvement for the business.  There is always a better way and the men and women usually best qualified to establish this better way throughout the company's global connections and operations are those closest to the work itself when provided with the tools and support and encouragement to implement this better way.

     The fourth area of systemic quality leadership strength of today's corporate quality leaders has to do with their strong attention to the measurement and management of the new internationally driven economic and cost forces pressing upon their organizations as the companies globalize today and which supports their emphasis upon using strong management and quality based economic and cost leadership as a key to their business success in meeting these forces.

     One of the competitive quality-based strengths that many of today's global corporate quality leaders stand out is their capability to systematically measure the costs of quality associated with achieving complete customer value satisfaction and the business failure costs that are created when this does not take place.  Because these costs are systematically measured they correspondingly can then be systematically managed and provide a big competitive leadership factor to help achieve genuine cost management and true cost leadership for the company.

     This makes their systematic emphasis upon both high customer quality value and low quality costs - both together - a key element of the way they effectively lead and compete in major profitability and growth.

     This explicit management and measurement of the economics of quality correspondingly provides a significant quality value leadership strength which has proven to be a great asset for the profitability of these successful companies that their less well quality cost focused and measured competitors do not have.

     The fifth of the areas I want to discuss that leading companies are using in building their competitive strength has to do with the character of their strategic and very firm hands-on emphasis upon the continuous management innovation based emphasis upon quality which we've been discussing here. 

     In an increasing number of highly successful companies, quality today is correspondingly being approached in day-by-day operational and strategic terms with hands-on senior management overview and leadership of these total quality management based quality processes that we've been discussing. 

     Quality leadership in these leading companies is as directly and systematically senior management overview focused as are the finance, equipment and personnel processes and the physical "brick and mortar" assets that have always had hands-on management leadership in strongly successful global companies. 

     And of great total quality management importance, this emphasis provides a clearly defined and highly significant role for the company's quality experts and professionals today.  This role includes direct support in quality terms for the company's senior management.  Such constant innovation in quality terms is an area that is likely to represent an increasingly significant leadership role for quality professionals over the next several years in competitively strong global companies, and is a subject of our forthcoming Power of Management Innovation book, commemorative copies of which McGraw-Hill has so generously made available to this Conference.

     Supporting these five characteristics of management innovation and of total quality correspondingly provides a highly productive role and a strong opportunity for today's quality professional in directly helping to provide leadership in this powerful new character of quality in their companies. 

     Moreover, it helps to provide the additional enthusiasm and satisfaction that such a commitment to excellence and to improved economic, social and human welfare brings to our work, to our companies, to our quality control societies and indeed to our own personal lives as all of us so well know and understand. 

     And it indeed helps support the emphasis upon management innovation with a total quality foundation as one of the centerpoints of America's economic recovery and return to successful growth today.

     I thank you for your kindness and attention to these remarks.  And Don Feigenbaum joins me in wishing you continuing great success in your emphasis upon this character of ever improving quality excellence, which is the continuing guidepost for all of us in today's quality field.  Let me conclude these remarks by expressing our great privilege and honor in having this opportunity to be with you this evening at this outstanding ASQ World Conference on Quality and Improvement.