ASQ - Team and Workplace Excellence Forum

Online Edition - November 2001


Issue Highlight — Actions That Might Matter
- In Actions That Might Matter, Peter Block challenges us to rethink our well-intended and often automatic urge during difficult times to just "Do Something!" Think instead, he asks, about authentic change, shifting consciousness, relationships, and reconciliation.

Global Quality from Johnsonville, WI,
to Durban, South Africa, with Jennifer James

Leadership is Everything

The world we face is constantly changing and never quite seems to follow the course we expect or desire it to take. During the times when we most need to get “outside of our box” to gain a new perspective, is exactly the time many of us find it most difficult to do so. Faced with crisis, many of our organizations and many of us tend to revert to known patterns or ways of coping or adapting. At the same time, we know that during times of crisis some people and organizations are able to create new and functional ways of adapting or working. The need then is to talk with those who have a different view of people and organizations, those who have the ability or background to spot functional and dysfunctional “ways” of adapting. Dr. Jennifer James, who has worked with the AQP in the past, is just such a person – a cultural anthropologist, skilled in studying and understanding how the institutions and structures of society change and adapt over time. Dr. James will be speaking at our annual conference March 11-13, 2002 in Las Vegas, but we thought that it would be helpful for our members to talk with her now, as well. In a recent interview, Ned Hamson, an NFC editor, talked with Dr. James about globalization, quality, and how people are managed to produce quality.

NFC: Companies from Main Street to the Miracle Mile are having to deal with a global economy even when they think their business is only local. They’re buying from around the world, or they may be competing with a franchise that’s owned by a French-owned company operating out of Seattle in the United States. People now have to react quite differently. What have you seen, what kind of problems do organizations face, and how are they coping with it?

Dr. James: I think what’s difficult is long-distance management on a global scale. People won’t produce quality if they’re not managed in successful ways. No amount of quality directives is going to help if your French office is disaffected in terms of the way they are being managed. Leadership is everything.

Why don’t we take the airlines as an example? Here is a business where quality may or may not be the determining factor in someone’s choice of route, but it really causes the business a tremendous amount of trouble in terms of regulations when they don’t provide quality. I don’t think there is a single industry where people have more complaints than those about air travel. The airline industry is not run as a business providing a quality service for a variety of clients. It is run as a kind of Las Vegas odds game.

What seems to happen is less quality on every level. There isn’t quality in how they’re delivering the basic service because there are few straight line routes. There is no quality in how they treat the client because no matter how well they train their agents, the agents are too frustrated by the system that frustrates everyone in it. Flying is becoming a business, in America, where quality becomes almost impossible. No matter how accountants, or strategists, play at airline game theory to establish their schedules, their hubs, their rates, etc., they cannot provide quality, nor can they succeed financially.

The airlines are acting like addicted gamblers, if we stretch my metaphor. Instead of using any kind of logic, they are deep into a strategy game in which they play against each other, elbowing each other out of the way or, playing with the customer, forcing the business client to pay more… .

NFC: Your image is like three people who have been at the slot machines now for 36 hours watching each other… .

Dr. James: And they’re sure that somehow if they keep playing this game that the odds will change, when in fact they’re playing the wrong game. These are companies whose basic structure of how they are organized, how they are administrating, what they’re trying to deliver has gotten so deep into game theory, whether it’s from consultants or whether it’s from trying to elbow another company out of the way, whatever it is — undercutting, underselling — that they have lost track of the ability to deliver a high-quality product over the long term.

So there’s some kind of convoluted business theory working here that makes quality sort of beside the point. It began to happen, I think, more over the last 10 years — the manipulation of business instead of the actual business of business.

NFC: Doesn’t that resemble the early 1970s? It’s a cycle that has just repeated itself then?

Dr. James: Sure! It works for a short while and it looks enormously successful for a short while, which Americans love because we have such a short attention span. Quality requires a much longer and more in-depth commitment. So much of what passed as business success in the ‘70s or what passed recently, if you use your recycle theory, is not going to function in the future. And I’m worried about any number of our businesses. They’re built on houses of cards just like a lot of the tech businesses were.

My husband bought a GM truck for his business. We got so many recall notices that we began to ignore them. But there is a special group that’s hired by the government to call you if you do not call in on your recall. It took so much time to do the paperwork on the recalls for GM that we eventually just got rid of the truck. Our view was we would never buy another product like that. Not because it didn’t run reasonably well, but because we couldn’t handle the paperwork of the recalls and the organizations hired to check on the recalls. Layer after layer after layer … .

NFC: It seems to be somewhat endemic in the large companies, but not all large companies because some large Japanese companies are consistently good at quality. And it isn’t that all Japanese companies are wonderful and operate well, because a number of large Japanese companies are doing exactly the same thing as U.S. multinationals — they “shop” around for the lowest cost workers in China, in Russia. Where would you look for examples of organizations that are doing some things right, or alternatively, where would you look for clues?

Dr. James: It would be either an old-line solid company that basically stayed with meat and potatoes and didn’t give it up — Johnsonville Sausage, a company that’s still making brats but trying to make better brats. Or it would be with a young tech company that has a product, maybe one that saves data so that companies can reconstruct themselves after a disaster like the Trade Center. They can do it and do exactly what they say they can do and they can turn around on a dime. It could be either end of the complexity spectrum. The book, Built to Last, do you remember it? Many of the companies in Built to Last at the moment that book came out (even though it was a well-written book) were already in trouble. Boeing was in trouble, because new young engineers didn’t want to work for Boeing anymore. It had a 1950s command and control structure. People were losing faith in the Boeing management compared to Airbus and other engineering opportunities.

NFC: The ultimate slap at their workers is perhaps that they left their home city.

Dr. James: We still don’t know why they went to Chicago. Here’s this company that had everything going for it according to Built to Last with very little competition worldwide that has had trouble solving the most fundamental quality control issues. They had too many planes with quality problems coming off their assembly lines and many disaffected professionals among their employees.

NFC: Due to people being dispirited.

Dr. James: Yes, conscious and unconscious sabotage. The board seemed unwilling to act. So if you ask me where the future is in terms of management and quality, I would say it is in anything that is not “lodge” driven — in other words, new, innovative companies that are not built on the old lodge model. Or the Japanese model where I was using Johnsonville as an example. This type of company is saying: “We’re just going to make our product better and better, treat our employees well, and have close relationships with our suppliers.” It’s those two ends of the spectrum. The middle I can’t speak to.

NFC: Let’s go back to globalization for a second. It’s really one of those times where there is no going back and globalization will just keep working its way but I still see very few companies that operate themselves in a global way. In other words, if you go to an American company in Malaysia, its senior managers are all Americans, or it could be a Dutch or German company here and the senior managers are only Dutch or German and there’s no real attempt at any level within the company to give yourself an idea of how to adapt to all those different cultures.

Dr. James: We know that approach cannot sustain itself. I was just in South Africa working with Pic ‘n Pay, which is a fabulous company. If you want to look at quality on every single level, look at how Sean Summers runs Pic ‘n Pay which is in all of South Africa, a good part of Southern Africa, and in Australia.

NFC: Is that a grocery store chain?

Dr. James: It’s kind of a high-quality dry goods and grocery combination. Forty percent of his current managers are Black South Africans. The company did that during the Apartheid era. They ignored the political pressures and created their own management training schools. The result was a very strong company all during Apartheid and an even stronger one afterward. Quality from the fruit to the pastry to how they treated their employees, how they treated their clients, to how they treated their suppliers, really an extraordinary example. You can look at Sean Summers’ management group and see they are from every class and ethnic group in Southern Africa, Asian, which is East Indian, or Zulu, or Dutch, or whatever. So those are the companies that have the energy to succeed in this decade.

NFC: So you’d say if Pic ‘n Pay decided to open up stores in Brazil that there’s going to be a healthy mix of Brazilians working there?

Dr. James: Oh, yes. It’s Pic ‘n Pay — their management style is excellent and would work absolutely anywhere. If you take Johnsonville Sausage, I don’t think they’d have any trouble promoting anyone from anywhere either if they were competent. But Boeing would have trouble, because Boeing is still a lodge, and a lodge basically is going to be the Elks and the Elks are still all white, all male, or a few females who pretend to be white males. That is, aside from color, gender, or ethnicity, it is basically people who think alike. So the problem isn’t whether it’s a new tech company or an old basic company like a Pic ‘n Pay or a Johnsonville, it is a management attitude about recognizing quality in personnel as well as in all the other things.

NFC: There is a meat and potatoes global company, H. B. Fuller, out of Minneapolis-St. Paul that makes glue for labels. They take their relationships with employees very seriously. They don’t pay their overseas staff the same as they do in the United States, but they use the same approach with them, in that all promotion is done from within, if at all possible, and they look at the pay scale — which could be in Singapore or Taipei — and they will aim at the middle of the pay scale as a starting point. So their employees, wherever they may be, will receive competitive pay.

Dr. James: So even if they could bottom line people, they don’t. Whereas the airlines or many of the other industries we’re talking about will bottom line people. Airport security at $7 an hour. You can make more than that at McDonald’s.

NFC: So, whom do you see globally that is taking great care with their employees?

Dr. James: If you ask me what’s the best company I’ve seen in the last 10 years, it would be Pic ‘n Pay.

NFC: And if Pic ‘n Pay wants to expand globally, they don’t have to physically expand, do they? They can expand by exporting their management method and how they approach their business and customers?

Dr. James: Right, since they’ve built their own management training schools. I’ve suggested to Summers that since groceries are hard to take global because of local arrangements and suppliers, there’s no reason not to export the most valuable thing they have — which is what they know about — quality management.

NFC: Their knowledge about how to run a quality company?

Dr. James: You bet. I just worked for a huge grocery chain/association in the Midwest doing some of the same things Pic ‘n Pay does, and I went to a number of their stores to prepare for it and I was stunned. The United States compared to South Africa, right? And the quality — it was like night and day. The quality of the store, the personnel, the products, and the management at the American stores was a C or D level compared with an A level in South Africa. That’s what I told them. The design, the product quality, the cleanliness was second rate compared to Pic ‘n Pay. In addition to not matching up on that type of quality, one of the most insulting things here in the United States is going into a business primarily patronized by women — in this case, grocery stores — and finding that their management structure is still 92 percent male, starting with assistant store managers. I said, “It’s 2001. You guys can’t see quality because your eyes are shut.”

The consumer is becoming more global, more informed, more aware of options and quality, and more able to buy through the Internet. Quality of product and service is acquiring more power than even W. Edwards Deming imagined when he first tried to get American manufacturers to consider it as crucial to their business. And as I said earlier: Your people can’t, won’t produce quality if they’re not managed in successful ways. No amount of quality directives is going to help if your employees are disaffected in terms of the way they are being managed.

Excellent companies referred to in this interview:

Johnsonville Sausage Company

“What does Johnsonville stand for? …there are five things we value over everything else: integrity, innovation, commitment, continuous learning, and teamwork.”

Pic ‘n Pay

“We serve. With our hearts, we create a great place to be. With our minds we create an excellent place to shop. Our people make the difference.”

H.B. Fuller

“H.B. Fuller is committed to the balanced interests of its customers, employees, shareholders and communities; and, accordingly, H.B. Fuller will conduct business ethically and profitably, support the activities of its employees in their communities, and exercise leadership as a responsible corporate citizen.”

November 2001 News for a Change Homepage

 In This Issue...
Global Quality from Johnsonville, WI, to Durban, South Africa, with Jennifer James
The Drugs Are in the Mail
Virtually Amazing
Why Can’t We All Just Get Along
What Did You Just Say?

Peter Block Column
Views for a Change
Brief Cases

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