Is Quality Still FREE?

Joining Rank Xerox in the mid-80s was one of the best career moves I ever made and one of the most enjoyable times of my life. The company was going through a process of reinvention, after being swamped by new competitors in the 70’s. This was due to anti-trust legislation forcing Xerox to license copier patents to its main competitors.

Having invented and launched the first plain paper photocopier, the Xerox 914 in 1959, Xerox was the only game in town and quality was not the key to the companies success. By the mid-80s, the new kids on the block were starting to really hurt Xerox, delivering smaller and more reliable products.

Legend has it that the CEO of Xerox, David T Kearns read “Quality is Free” by Philip Crosby and implemented “The Leadership Through Quality” initiative, a multi-day residential training course for every one of Xerox’s over one hundred thousand global workforce. I still have the workbooks, produced on a Xerox copier of course.

Crosby understood that Quality is not limited to Processes, Numbers, Charts and Systems. Positive results can be gained by the individual employee understanding the concepts and impacts of quality, both good and bad.

Crosby had found that on average 20% of a companies turnover was wasted correcting mistakes and doing things again, so a company with $10 million in annual revenues was wasting $2 million every year. A small but achievable 10% improvement in quality (Doing it right the first time) would immediately add $200,000.00 in extra PROFIT to the bottom line.

With annual revenues in the billions, the potential savings for Xerox were enormous, so running the Leadership Through Quality course for every employee was an insignificant cost by comparison.

By 1992 Xerox was winning Quality Awards. The ROA was the highest in 11 years and Xerox was the only US company taking market share back from the Japanese. 

Coincidentally it was also the year I left and went into business as a reseller of Xerox Electrostatic printers which dominated the early years of the short run wide format colour printing marketplace. 

When we started to grow the business one of the first things I did was to implement quality training based on Crosby’s principal theories. A course we have continued to develop over the years. We now run the updated course through Novalead as “PROFIT from Quality.”

So is quality still free? 

Well, Xerox saw massive growth through the 90’s until it lost focus on quality in 98. That culminated in a new crisis that was eventually turned around again when Xerox launch a quality initiative in 2001, which was the prelude to Lean Six Sigma. 

Quality can be very expensive when it is ignored.

To quote Harold S. Geneen from the dedication page of Crosby’s book Quality is Free: 

“Quality is not only right, it is free. And it is not only free, it is the most profitable product line we have.” 

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