Where is Quality Really Made? An Insider's View of Deming's World

In this episode, Bill Scherkenbach, one of W. Edwards Deming's closest protégés, and host Andrew Stotz discuss why leadership decisions shape outcomes far more than frontline effort. Bill draws on decades of firsthand experience with Deming and with businesses across industries. Through vivid stories and practical insights, the conversation challenges leaders and learners alike to rethink responsibility, decision-making, and what it truly takes to build lasting quality. Bill's powerpoint is available here. TRANSCRIPT 0:00:02.2 Andrew Stotz: My name is Andrew Stotz, and I'll be your host as we dive deeper into the teachings of Dr. W. Edwards Deming. Today, I'm continuing my discussions with Bill Scherkenbach, a dedicated protégé of Dr. Deming since 1972. Bill met with Dr. Deming more than a thousand times and later led statistical methods and process improvement at Ford and GM at Dr. Deming's recommendation. He authored the Deming Route to Quality and Productivity at Deming's behest and at 79, still champions his mentor's message: Learn, have fun, and make a difference. The discussion for today is, I think we're going to get an answer to this question. And the question is: Where is quality made? Bill, take it away. 0:00:44.9 Bill Scherkenbach: Where is quality made? I can hear the mellifluous doctor saying that. And the answer is: In the boardroom, not on the factory floor. And over and over again, he would say that it's the quality of the decisions that the management make that can far outweigh anything that happens on the shop floor. And when he would speak about that, he would first of all, because he was talking to the auto industry, he would talk about who's making carburetors anymore. "Nobody's making carburetors because it's all fuel injectors," he would say. And anyone who has been following this, another classic one is: Do you ever hear of a bank that failed? Do you think that failed because of mistakes in tellers' windows or calculations of interest? Heck no. But there are a whole bunch of other examples that are even more current, if you will. I mean, although this isn't that current, but Blockbuster had fantastic movies, a whole array of them, the highest quality resolutions, and they completely missed the transition to streaming. And Netflix and others took it completely away from them because of mistakes made in the boardroom. You got more recently Bed Bath & Beyond having a great product, a great inventory. 0:02:51.4 Bill Scherkenbach: But management took their eyes off of it and looked at, they were concerned about stock buybacks and completely lost the picture of what was happening. It was perfect. It was a great product, but it was a management decision. WeWork, another company supplying office places. It was great in COVID and in other areas, but through financial mismanagement, they also ended up going bust. And so there are, I mean, these are examples of failures, but as Dr. Deming also said, don't confuse success with success. If you think you're making good decisions, you got to ask yourself how much better could it have been if you tried something else. So, quality is made in the boardroom, not on the factory floor. 0:04:07.9 Andrew Stotz: I had an interesting encounter this week and I was teaching a class, and there was a guy that came up and talked to me about his company. His company was a Deming Prize from Japan winner. And that was maybe 20, 25 years ago. They won their first Deming Prize, and then subsidiaries within the company won it. So the actual overall company had won something like nine or 10 Deming Prizes over a couple decades. And the president became... 0:04:43.5 Bill Scherkenbach: What business are they in? 0:04:45.5 Andrew Stotz: Well, they're in... 0:04:47.0 Bill Scherkenbach: Of winning prizes? 0:04:48.7 Andrew Stotz: Yeah, I mean, they definitely, the CEO got the distinguished individual prize because he was so dedicated to the teachings of Dr. Deming. And he really, really expanded the business well, the business did well. A new CEO took over 15 years ago, 10 years ago, and took it in another direction. And right now the company is suffering losses and many other problems that they're facing. And I asked the guy without talking about Deming, I just asked him what was the difference between the prior CEO and the current one or the current regimes that have come in. And he said that the prior CEO, it was so clear what the direction was. Like, he set the direction and we all knew what we were doing. And I just thought now as you talk about, the quality is made at the boardroom, it just made me really think back to that conversation and that was what he noticed more than anything. Yeah well, we were really serious about keeping the factory clean or we used statistics or run charts, that was just what he said, I thought that was pretty interesting. 0:06:06.7 Bill Scherkenbach: Absolutely. And that reminds me of another comment that Dr...