NEW –STYLE QUALITY

The term quality is one of the most misused in the business world. What exactly does it mean? Our grand parents would have been no doubt. Quality means excellence: a thing was the best of its kind, and that was that. A Stradivarius violin had a quality, a tinker’s fiddle did not. In business, however, the world has acquired a different meaning. As defined by the American statistician Edward Deming some 50 years ago, quality means consistency, a lack of defects.

Around 1970, it is said, a group of investment analysts visited a world class UK engineering company. They asked the questions of their trade: about profit margins, stock control and balance sheets. The company’s executive seemed honestly puzzled. They didn’t see the point at all this they said. Their product was the finest in the world. Why all these detailed question about the numbers.

Rolls Royce, the company in question went bust in 1973. The trouble with old style quality, it seemed, was supply driven management. The engineers would make the product to the highest possible standard and price it accordingly. If the public was so uncultured that they turned it down, so much the worse for the public. And so old quality got a bad name in business circle. It was all very well for artists to produce masterpieces. The job of company to please the market.

Further damage to old style quality was done by the rise of Japan. When Japanese cars toys and television sets first reached the marketing the US and UK, local manufacture considered them cheap trash. In the beginning they are. But under the teaching of Edward Deming the Japanese were learning about the second definition of quality. Western customers then began to realize that while Japanese cars might be tin cans, they did not keep breaking down as did American and British cars.

In time of course, Japanese cars stop being tin cans, and became stylish and being comfortable vehicles instead. That is, they achieved old style quality as well. As western manufacturers discovered to their cost, that was in some respects the easy bit. New style quality was harder.

Quality has a third meaning: that of value for money. To qualify for that meaning, a product must be of certain standard; and it should convey a sense, not of outright cheapness, but of being sold at fair price.

The US fast foods group McDonald’s, for instance, talks of its high quality food. But at 99c or 99p, its hamburgers are as close to absolute cheapness as any person in the developed word could desire. They are also highly consistent. Eat a McDonald’s anywhere around the world and the results will be roughly similar. But as anyone who has eaten a really good hamburger knows, a McDonald’s is also a long way from quality in its original sense. --- A page from financial times.