Guest post by John Hunter. John and his father worked with Peter Scholtes for many years (Out of the Crisis included a report on Bill Hunter and Peter’s efforts to help improve the City of Madison government).

Peter Scholtes shared his thoughts on Leading Quality: Some Practical Approaches to the Managers New Job at the 1992 Ohio Quality and Productivity Forum conference.

It is a little daunting to stand up here and speak to you about quality and know that before me Dr. Deming is up here and then later this afternoon we are going to be hearing from Dr. Kano. It is like I was up here talking about basketball and there is Magic Johnson and Michael Jordon it would be almost less intimidating than this. Everything I’ve learned about quality, just about everything maybe 95% of what I know about quality, is either from Dr. Deming or Dr. Kano or their students.

Peter starts the talk exploring myths about the practice of quality management.

Myth: managers of conventional American organizations care about customers, quality, employees, costs and profit. As Dr. Deming says “nobody gives a hoot about profit“… and we sit it all the time. The rhetoric of quality has finally invaded the country, marketing people have certainly learned how to spell the word quality, but when we look at the day to day practices of quality there isn’t much indication, I’m afraid there isn’t much indication, that American business in general understands what quality is all about and understands how to lead and learn how to do it.

As usual, Peter does a great job of packing an incredible number of great thoughts into his talk. Definitely watch the full presentation, this post can only skim over a few ideas he explored during the talk.

The Fiero plant failed eventually, but not because of the lack of improvement, they knew how to improve, the failure of the Pontiac plant was at the leadership of General Motors. It takes more than improvement. As Dr. Deming points out, you can improve the process at the teller’s cage at the bank, but that won’t keep the bank from failing if they make poor loans.

Throughout the talk Peter emphasis the importance of viewing the organization as a system and using the knowledge from that view to inform how the organization is lead, managed and how people are able to work. With a systems view it is possible to appreciate how many individual factors interact to impact how successful an organization can be and how those factors interact with each other.

The customers and their needs shape the organization and its work, not the other way around.

…

We recognize there is a chain of customers… every step in that chain of customers represents somebody important to their company, somebody that has needs that need to be satisfied. And if they are going to get feedback from the customers, they need to get feedback from every step in the chain of customers.

I have written about this type of customer focus thinking from a Deming perspective in the past: Customer Focus with a Deming Perspective, User Gemba and the most important customer focus is on the end users. It is important to pay attention to those that pay for your good or service, but when you think with an appreciation for systems thinking you extend beyond those interactions to examine the entire system which provides more insight into the possibilities to improve.

We need to define what our customers get from us, not in terms of the product that we sell or the service that we offer, but in terms of capability that they acquire from us.

He goes on to give a great example. This understanding of customer focus should resonate with those who familiar with “jobs to be done” thinking.

Dr. Deming contributes from the audience during the questions and answers at the end of the presentation, including this gem:

Anybody can cut costs, simplest thing in the world. What does it do the customer? What does it do to the organization? What does it do to your future?

Related: Peter Scholtes on Teams and Viewing the Organization as a System (and Train Wreck Management) (another great talk by Peter, he discuss a bit more on the traditional “train wreck” organization structure) – My First Trip To Japan by Peter Scholtes – Peter Scholtes on Managing People and Motivation – Don’t Empower – Manager’s Should Eliminate De-Motivation, Not Seek to Motivate – Madison, Wisconsin police department surveying those they arrested to get customer feedback