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
http://jobs.johnsonville.com/jvillejobs.nsf/Value?OpenPage
“What does Johnsonville stand for? …there
are five things we value over everything else: integrity,
innovation, commitment, continuous learning, and
teamwork.”
Pic ‘n Pay
http://www.pnp.co.za/
“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
http://www.hbfuller.com/aboutus/aboutindex.html
“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
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