The Mystery of Commitment
In an English breakfast of bacon and eggs, who is more committed? The pig? Or the hen?
Organizations desire commitment at all levels.
But how do you get commitment for quality from the top management? Not that they are not committed. What I mean is committed-committed.
Russi Mody, Chairman, Tata Steel, in the 1980s, resisted any formal quality intervention on the grounds that even the 3 percent seconds (read – rejects) of Tata Steel had a pent up demand. Is seconds an opportunity or a threat? By translating the 3 per cent seconds into the language of top management, the opportunity converted to a threat. The language was that of money.
The alarm for 3 percent seconds was 30 percent of total cost! This is referred to as the Cost Of Poor Quality.
Mr Mody compared that figure with his profit. He instantaneously got committed to drastically reducing the seconds. He assembled other members of the top management and declared war on waste! The Commander-in Chief was none other than the legendary Dr J J Irani, Managing Director. All the rank and file from all functions stood committed to the declared war.
Why had Mr Mody not seen it this way before?
Tata Steel, a decade later, went on to becoming the lowest cost steel producer in the world. A further decade later, it acquired Corus in the UK, through the distinguished leadership of Ratan Tata, Chairman, Tata Group. Corus is today a turnaround story, importing best practices from Tata Steel.
Finally, the answer to the original question on commitment is – pig! He sacrifices his life.
I am part of ASQ’s Influential Voices and this post is in response to ASQ’s Blog: A View from the Q.
Sharp thinking! Thanks for the answer.
2) Indeed, the period of 70s and 80s – I can talk of only this period, since that is when I had joined the working professional career – when “seconds” certainly had pent up demand.
One possible reason was skewed tax structure. This lent “seconds” to be sold at lower rates – by the (substantial) margin on account of the way the taxes were charged. Indian customer was happy that a product was available ‘cheaper’ [and most of the time at almost the same quality]. The manufacturer was happy because by ‘managing’ “seconds”, one could make a fast buck, away from the eyes of the Government.
In fact, there was a great school of ‘expert’ professionals who specialised in this practice of ‘managing’ “seconds”, as if the organization’s purpose was to produce “seconds” and the “prime” products were by-products!
It was the advent of cenvat – or for that matter, an efficient system of avoiding cascading taxes – and ‘lower’ differentials between “prime” and “seconds” that helped to focus on “seconds” as a waste – whatever be its market demand.