Quality & Economics
The question of quality runs far deeper than business. When quality fails at the societal level, we fail each other. Then the real danger is that we fail to govern efficiently and fairly.
Books by Subir
When I talk about “honesty” in the context of quality, people often mistake my intent. I am not implying that people are dishonest. I am not saying that people do not know right from wrong. The kind of honesty I’m referring to is the kind that helps you avoid mistakes in your business—the type of honesty that pushes good data, good actions, and a positive future.
- What happened that allowed the Deepwater Horizon drilling platform to explode and release millions of gallons of oil into the Gulf of Mexico? Detailed testimony during the court case against BP suggests that the engineers and management were aware of possible problems, but that they ignored the warnings.
- What were politicians thinking when they enacted the Budget Control Act of 2011? Supporters claimed that budget sequestration would not damage American military readiness. However, less than a year after enactment of the law, a top of the line nuclear submarine was severely damaged because the resources were not there to protect it. When it came time to repair the sub, the US Navy said that it didn’t have the budget, so a $1 billion piece of equipment was scrapped instead.
- The Japanese government and a national power company claimed that the Fukushima nuclear reactor disaster was the result of unforeseen circumstances. Reports have since come out that they had received many warnings that Fukushima was vulnerable to tsunami and earthquakes.
When there are disasters, people often make irrational claims that a company is being deliberately dishonest. There’s a general misunderstanding about how large organizations make decisions.
Large corporations and especially government and government agencies rely heavily on management consensus for their big decisions. The nature of the consensus could be based on several criteria like risk assessments, mitigation, cost factors, profitability, and so on. No single factor is the driving force in any decision, especially when there are political elements involved. Moreover, that’s how disasters can happen.
In the cases I mentioned above, it is very likely that few people thought that the risk levels were high enough to change their minds or offer alternative solutions. More than likely, they never heard the warnings because, by that time, the warnings had been filtered out or diluted to the point that they didn’t stand out. Ultimately, the decision makers did what many people do: they just went with the flow.
To me, “going with the flow” means that you are not listening to the data, you are not enriching your actions, and you are not optimizing your future. When you make decisions as they did at BP or Fukushima, you’re taking an average of possible answers and hoping nobody notices that you took a shortcut. The problem is, these days, even the most innocuous shortcuts can set off terrible global disasters.
When you have true honesty in management, information flows freely. You have real data, effective action, and a positive future. If you do not have honesty from everyone in your organization, how can you make the right decisions? How can you trust the quality of your processes if your people can’t be honest with you?