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.


Subir’s Reading List


Books by Subir

The Power of LEO
The Ice Cream Maker
Next Generation Business Handbook
Taguchi's Quality Engineering Handbook
The Power of Design for Six
The Power of Six Sigma
Organization 21c

Data, Action, and Future

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?


More on Quality & Economics

A Tale of Two Countries

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Whose political crisis is this, anyhow?

Questions persist as to whether our representatives can actually manage the country’s business. But whose fault is that, really?

Subir Chowdhury Fellowship on Quality and Economics at the London School of Economics (LSE)

The Subir Chowdhury Fellowship on Quality and Economics allows for any post-doctoral scholar in-residence to participate in the program, regardless of ethnicity or national origin and spend time at LSE engaging in research examining the impact of “people quality” and behavior on the economies of Asian nations prioritizing, but not restricted to, India and Bangladesh.

A Moment of Truth for the Solar Panel Industry

A 5.5% to 22% defect rate in solar modules is more than just a manufacturing problem. It's a moment of truth for the entire industry.

A Little Salmonella May Not Kill You, but it May Kill your Economy

Quality processes affect more than business. When it involves a country’s ability to maintain and regulate safety, poor quality management can damage the entire economic infrastructure of an industry, even a nation.