The Cost of Lip Service


    You go to any major corporation in the U.S and mention "Quality". The most likely reactions you will see are either a smirk or a resigned shrug of the shoulders! They have seen a parade of "fad or the year" stuff spouted by their CEOs and they know Six Sigma, Lean and Continuous Process Improvement will join the scrap heap of other fads of the years before: Process Engineering, Total Quality Management, Zero Defects, Total Customer Centricity, etc.

    Does this mean these other methods do not work? Hardly. They just know that business will be as usual once the required lip service is done to the fad of the year. Once you worship enough number of times at the altar of the fad of the year, you will get your promotions, raises. Once another CEO steps in, in a few years. there will be another fad of the year that you can all pay obeisance to.

    Do all of these have a cost? Absolutely. Look at how american automakers lost a lot of ground by paying only lip service to quality initially and never caught up to Japanese automakers even though they tried harder in the recent years. The chart below is somewhat older but the latest news is even worse for the American Automakers – Toyota is #2 automaker in the U.S and Honda surpassed Daimler-Chrysler to take the #3 spot. However American Automakers have been claiming to have caught up on quality which they may have. However Gasoline Prices and Consumer Reports consistently rating Japanese autos (that includes Toyotas and Hondas manufactured in the U.S) higher than others have made sure that the above happened instead!

    The problem? They made it a 2 year plan instead of a 20 or 50 year plan where quality becomes slowly ingrained in the company, people and practices and you become a force to deal with, not a competitor! The sad thing is that companies like Daimler-Chrysler come up with innovations like the Minivan and more recently, the Tailgating accessories on the hatch back door of recent Chrysler vehicles. These find their way very quickly to all makers and the value of the innovation is lost in the race to quality of manufacture and reliability!

    Toyota Global Sales & Market Share: 1970-2003

    Source: Fortune, August 23, 2004; CSM Worldwide ;

    What does this have to do with Outsourcing? Everything! If Outsourcing vendors do not make quality a part of their DNA, they are going to lose out to the next cheap labor country that steps up! It will be China next to India and when that is too expensive it will be Vietnam (think this is not happening? – lots of manufacturing is already moving to Vietnam from China according to the latest reports!).

    Lean Six Sigma and Continuous Process Improvement offer a chance to build this 5, 10, 20 year plan to add value in Outsourcing activities not just provide cheaper labor. But will they take it? Will they move beyond just paying lip service?

    Some people seem to feel that leadership is about image and appearances. They try to look and act the part. They work hard at faking their sincerity. They’re about as authentic as "natural vinyl."

    — Jim Clemmer