There is an old saying in the operations world, that “quality is free.” Specifically, quality gurus such as Philip Crosby, W. Edwards Deming and Joseph Juran found that investments in improving product or service quality more than paid for themselves, because they simplified production processes, eliminated waste, reduced rework, reduced returns, and fostered customer loyalty.
As I think about promises and business momentum, it strikes me that the principle of “quality is free” also applies to questions of integrity and keeping our word. In fact, for the leaders of the quality movement, quality was a matter of integrity.
So, in this recent post in strategy + business, Integrity is Free, I explore the ways that integrity “more than pays for itself,” by improving credibility, galvanizing teams, accelerating innovation, and building trust. Here is a brief synopsis:
In the 1979 bestseller, “Quality Is Free: The Art of Making Quality Certain,” quality guru Philip Crosby outlined a straightforward argument: It’s always cheaper to do things right the first time than to go back and do them again. Though the downstream benefits of doing things right the first time weren’t always easy to track, but they were invaluable. “Quality is free,” Crosby wrote. “It’s not a gift, but it is free.”Crosby and his contemporaries, Deming and Juran, noticed that problems with qualityusually arose because senior leadership had not been clear about what they were committed to deliver, or they acted in ways that didn’t align with those commitments in practice. Conversely, when companies transformed, it was often because a senior leader became convinced that defects were not inevitable and the status quo was hurting the bottom line.
Today, integrity—or lack thereof—remains a critical challenge for companies. “Commitment drift” can seem inevitable, as roles and priorities change, companies merge, and timelines shift. Indeed, it stretches the imagination to envision a world in which businesses deliver on 99.99966 percent of their commitments, as factories do with Six Sigma quality methods. Every day, business leaders face pressure to side step the truth, fudge the numbers, play politics, or pass the buck. In the moment, doing the right thing, or doing things right, always seems to cost more. Yet if we go along, the costs of compromise—damaged reputation, stress and added complexity—predictably follow.
Integrity isn’t easy, but research has found that acting in an honest and transparent way can pay off. For example, in “The Integrity Dividend: Leading by the Power of Your Word,” Cornell University professor Tony Simons outlines a 2000 study of 76 franchise hotels that revealed a 3 percent difference between two hotels’ average employee “behavior integrity ratings” translated into a difference of US$250k in profit per hotel per year.
Why does integrity pay off? First, honesty and transparency make things simpler. Second, when you have the courage to own your values and make clear commitments and keep them, others are more likely to trust, commit and engage. Finally, and perhaps most importantly, integrity forces individuals and companies to invent. Rather than managing impressions and looking like we are achieving results, we are left with no choice but to really achieve them.
Waffling on integrity almost always involves some element of avoidance. Yet, when you step up with courage and conviction, less of your attention goes to managing appearances and putting out fires, so more of your effort can go to the actual work… and the next breakthrough.
What are your thoughts? Could integrity serve as a core business philosophy?
Please feel free to share your comments here, or at strategy+business, where you can view the complete article.
Find a more academic focus on The Safra Center blog.
All the best,
This post is adapted with permission from an article published by Elizabeth Doty in strategy+business entitled Integrity is Free.