Question: According to Dr. Juran, one of the great quality gurus, the 20th century was a century of productivity and quantity, whereas the 21st century will be the century of quality. In that context, where is the global quality movement headed? What are the challenges and developments you see ahead?

Townsend:

I remember that quote. I saw it in the same article of Quality Digest in which Dr. Juran took the time to take the whole ISO thing very much to task. But anyway, the quote.

My wife’s and my latest book; one published by the American Society for Quality which you mentioned, thank you; When Quality Makes Money. One of the things we addressed was the evolution of the relative power of three groups. You split the whole world up into three groups; owners/managers, workers, and customers. In point of fact, almost all of us belong to two of those groups at any one point in time. And in fact, over a lifetime, most of us belong to all three. But, we don’t talk about them as separate groups all the time. When we talk about a particular new contract being really good for the workers, forgetting the fact that it just jacked up the prices for the customers and just lowered the profits for the owners, we treat them like separate groups. From the beginning of time, well at least the beginning of commercialism thousands of years ago up until late into the nineteenth century the owners/managers had the power. They defined what was going to be made, who was going to make it, where it was going to be made and what they’re going to charge for it. Nobody had much to say about it other than the owners/managers. Late in the 19 th century, unions were born out of necessity. They became a junior partner with owners and managers. When you go into the 20 th century, they took advantages of some real improvements of technology, and really push into the century of pro activity and quantity.

Now the other thing that is half of the twentieth century of course was the two World Wars. They forced the acceleration of improvements. They forced finding ways to make things faster because we needed them for the war effort. Then, there’s no polite way to say this, by leaving whole economies absolutely devastated, they forced those economies to jump start, and instead of going through a slow evolution, they were able to jump ahead. There was actually an executive at a United States steel company that said about fifteen years ago, “Oh yeah” when talking about why the Japanese steel prices were lower and the Japanese steel plants were more productive, he said “Oh yeah, they got lucky. They got bombed.” But you know what he means. He means that they got the chance to not evolve. They got the chance to jump. So that brought us into the 20 th century.

Through the 21 stcentury, first, we have this quality thing. Now this actually began back in the 20 th century in the mid1970s when the first boatload of Toyotas hit California. The world began to change. Because suddenly, what had been a few geographically based monopolies were on the way out. You could no longer hold an area because transportation was now cheap enough that stuff could be shipped in. You walk in any mall in America today there’s a phenomenal mixture of products and services from all over the world. The internet came along and blew away the geographical limits for services. Banks are suddenly no longer just the bank on the corner but a bank on the internet which happens to be located 2000 miles away. So these geographic limits went away.

So that means the customer is in charge. So that’s where you are now in the 21 st century. The customer is in charge and if you don’t believe me you can ask Ford or General Motors. They’ll tell you the customer is in charge. Because they are suddenly up against it because the customers are saying, “No thank you. We’re going to go buy their stuff.” And you have nothing. You can’t do anything about it. So as you come into this 21 st century, this century of quality that I think Juran correctly predicted, an organization has two choices, unless they have an absolute monopoly on a highly desirable service or product, which they’ll hold for about an hour and a half. If you happen to have a monopoly good on you, you can do what you want to. For the rest of the world, you’ve got two choices: you can compete on the basis of quality or you can have a bankruptcy lawyer and retainer. Those are your two choices in the 21 st century.