Harrington’s Seven Basic Performance Improvement Principles

The older I get, the more I realize that the basic things we believe in and live by do not change. The world keeps moving faster and faster. We need to run and work harder just to keep up. We get sidetracked by many new ways to use our time. Technology is moving so fast that before you can learn all the features on your cell phone, it is obsolete.

We communicate faster, more extensively, and exchange a great deal more information. The country and people that we used to think of as being on the other side the world now are our next-door neighbors. CNN reports the latest news on the wars and the fight against terrorism to the world before the generals commanding the troops know about it. Facebook and the Internet allow every person to broadcast his thoughts with minimum censorship to a vast population.

China has emerged from the dark ages to become one of the leading economic powers in the world. Labor costs there are getting so high that the country is outsourcing its manufacturing jobs to other developing countries.

Even our family life has changed. Most families’ living standards require both parents to work in order to maintain an acceptable standard of living. Microwaves and frozen meals have replaced the family getting together so they can share a leisurely dinner and discuss the day’s activities. The morality and aspirations of our teenagers are more influenced by television than by their parents or teachers.

Yes, there’s no doubt about it: This little blue marble floating in space that we call Earth has changed. But in reality have the basic beliefs and principles that we quality professionals have lived with for 30 or even 50 years also changed?

I was cleaning out some old papers and technical reports when I ran across a three-year planning technical report I prepared when I was president of the Harrington, Hurd and Rieker consulting group in 1988. The report listed the seven principles that must be considered when preparing any performance improvement plan. I was amazed at how little things have changed during the last 30+ years. These principles contains most of the concepts embodied in the lean Six Sigma methodology we are promoting today, plus some additional ones that are essential for organizations to be successful.

Seven basic principles were listed in the 1988 report. They are:

1. An organization must maintain long-term product or service superiority in its home market, for this is the area that is most critical to profitability and growth. Organizations around the world have found that if competition is possible, it’s bound to occur. The only way to combat this competition is to anticipate it so you can stay ahead of it. It is difficult, if not futile, to play catch-up.
2. Past experience has proven that foreign competition invades by establishing a small niche market, then expands to capture a bigger share of the total market.
3. Eliminating waste is more effective in increasing profits than increasing sales. In some cases, reducing waste has increased profits more than doubling sales would have.
4. The soft side of customer relationships has proven to be more important than meeting specifications. Customer service must be surprisingly good to keep customers. Most companies can meet requirements. The truly great companies get ahead by meeting and exceeding customer expectations, then helping the customer set new, higher expectations for the total market.
5. Product leadership is not based on making products quicker and cheaper but rather on making them better. A focus on “better” is the best way to produce less expensive products faster, as well as sell them faster.
6. The best advertising a customer can have consists of groups of satisfied customers. A satisfied customer tells eight people; a dissatisfied customer tells 22 people.
7. Technology can no longer be looked to as a wall that protects your customer base. Where product technology once provided a company with a competitive advantage, it now travels so fast from organization to organization and nation to nation that it has lost most of its advantage. The most important and powerful way to hold and increase your market share is through quality supremacy.

Since 1988 we have developed many new and supposedly revolutionary approaches and methodologies to bring about improvement in organizational performance. Some of them are:
• Process redesign
• Process reengineering
• Six Sigma
• Lean Six Sigma
• Balanced scorecard
• Value-chain mapping

In 1998 ISO 9001 was just being rolled out. The new concept of total quality management was taking hold. But with all the changes in quality practitioners’ approach to performance improvement, and all the changes in our environment, have there been any major changes in these basic seven principles that drive performance improvement? From my standpoint these principles are as good today as they were during the 1980s. Seldom does hindsight provide a better view than you have today, but in this case these basics truths are still as good today as they were during the 1980s.

Now as you read them you may want to add additional principles based on today’s views, but that was also the case in 1980. In selecting the seven, I want to limit the principles to the ones that were most important and should have been driving our improvement efforts as we moved forward. It’s too bad that during the past 30+ years we have not been able to develop improvement efforts that have transformed our public and private sectors in keeping with the principles defined in these seven basic concepts.

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