Creating flawless products no one wants

"You know there's a problem with the education system when you realize that out of the three Rs, only one begins with 'R.' " Dennis Miller

Today we meet another executive at Mundane Industries, our head of Quality Management, Donald "Zero" Difetto. He's what is known as a "Black Belt" in Six Sigma, the system for getting an organization to improve its processes, with the goal of zero defects.

DALE: Speaking of belts, Donald, I see you missed a loop.

ZERO: Oh, man, hold on while I write that up. I'm going to have to reprogram my spousal unit to include that in the a.m. checklist.

DALE: I invited you to join me because I wanted your opinion on a new study. The folks at QualPro, a research company I wrote about recently, searched for corporations announcing new Six Sigma programs, then looked at what happened to each company's stock price. Of the 58 companies they reviewed, only six had stocks that outperformed the S&P 500, while 52 underperformed. That's 10 percent up and 90 percent down. Could it be possible that quality is to the manufacturing business what health food is to the restaurant business -- everybody says they want it, but nobody actually buys it?

ZERO: So are you anti-quality? Pro-defect? We're building the best Mundane Industries products ever, and yes, our stock price is falling, but I don't see how more defects are going to boost the stock price. Take our least-profitable division, our toy business. Not our fault. Our product returns are approaching zero. We are, in effect, making perfect toys.

DALE: Good example. Our lead product this last Christmas season was our "Me too" competitor to "Tickle Me Elmo," our "Wedgie Me Wayne." Nobody returned it because nobody bought it. So it's flawless production of a product nobody wants.

ZERO: That's marketing, not production. The Wall Street Journal had an article on the stock-price research that quoted Jeffrey Pfeffer, a Stanford professor and Six Sigma advocate, as saying: "You can't do just one little thing. Low cholesterol is just one measure of health. In the same way, quality management is just one piece of the puzzle, but not the answer to the whole puzzle."

DALE: Well, say you make a cholesterol drug -- one little thing -- and then you look and see how people who take it are doing, overall. And if you see that those on the drug were less healthy, shouldn't you consider that the pill is actually bad for them? And maybe that's true for obsessing about quality. Maybe it makes a company less nimble or less creative. Maybe it helps turn a company inward rather than being focused outward on customers.

ZERO: If you people in marketing can't figure out what products we should make better, then there's the problem.

DALE: Agreed. A few years back I heard a story about two cell phone companies. One had virtually eliminated defects, while the other had just ordinary quality control -- let's call them the Perfect and Good phones. When customers had problems using the Perfect phone, the company had them box up the phone and send it in, and then the company sent it back, saying it was fine. And it was, because most problems were customers not understanding how to use the thing. On the other hand, if you called the Good phone people, they would work with you to figure out how to use the thing, and if it was a manufacturing problem, it would send someone out with a replacement. The upshot was that the Good phone had higher satisfaction ratings than the Perfect phone. I was told this by someone in the industry, but could never track down the actual data. It makes sense, though, doesn't it?

ZERO: No. Nothing you've said today makes any sense.

DALE: Here's the logic: The corporate brain can absorb only one big idea a year. Having fewer defects is a good idea, but it isn't "The Idea" because consumers don't get excited about what didn't go wrong. It's the lottery divided by zero, selling tickets to see what didn't go wrong.

ZERO: You're making my brain hurt. Besides, I can't think about it because I'm late for the taskforce on punctuality. (Standing up.) As Venkman says to the librarian in "Ghostbusters": "We'll get back to you."

Dale Dauten is a syndicated columnist. He can be reached at dale@dauten.com.