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The Old Way |
The New Way |
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Quality is relative. |
Quality is absolute. |
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Objective |
Defines "high quality" through a process of comparison with the offerings of a company’s closest competitors. |
Defines "high quality" by asking what is possible. |
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Method |
Products and services are engineered to compete only with the company’s closest competitors. |
Products and services are developed that meet customer needs and exceed customer expectations. World-class excellence is the goal. |
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Perspective |
"We must stay ahead of, or keep up with our closest competitors." "Watch your back." |
"Our customers deserve the best, and we will give it to them." "Keep your eyes on your customers." |
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Reasoning |
The real game is with our local/comparable competition. To win, we must beat them in terms of what our customers need. |
The real game is with our customers. To win their favor, we must exceed their expectations, and serve their as of yet unrecognized needs. |
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Nature of Inputs |
Inputs that are "just good enough" are used. The goal is to match or beat what competitors are offering. |
The best inputs available are used. The goal is to exceed customer expectations. |
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Nature of Outputs |
The products and services produced by this company are "competitive", at least on a local/comparable level. |
The products and services of this company satisfy customer needs with innovation and world-class excellence. |
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Internal Systems |
The internal systems of this company are geared toward production stability. As such, they often use regulating systems (e.g.: quotas, targets and automated equipment), that require employees to produce quantity instead of quality. |
The internal systems of this company are geared toward problem solving and learning. As such, they use team-based analytical techniques (e.g.: Total Quality Management) that enable employees to produce quality with quantity, and to seek out opportunities for improvement. |
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Employee Outcome |
Employees may be urged to produce "quality", but are expected only to produce "satisfactory". Employee pride is diminished. |
Employees are urged to delight customers and are expected to do so with excellence. Given this mission and the proper support from management, employee pride drives the effort. |
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Customer Outcome |
Here, customers must choose between relatively similar products and services, differentiated mostly by price. In this respect, they get what is familiar, and so are always looking for a better price in order to get some satisfaction out of the purchase. |
Here, customers get innovative, high value added (and even customized) products and services. They become used to this company’s uniquely excellent products and services. Eventually, they are dissatisfied with anything less, and are willing to pay a premium price for innovative offerings. |
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Market Outcome |
This company develops a reputation in the market for "average" or "local" quality. Because of this, it faces an eroding customer base and ever shrinking profit margins. |
This company develops a reputation in the market for world class excellence. Expanding market share and growing profit margins enable this company to pursue the future it wants. |
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Result |
This company tries to keep up with the pace of its closest competitors, all the while subsisting on slim market share and decaying reputation. |
This company sets the pace its competitors must keep, while enjoying above average profit margins and a sterling reputation. |
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