Does the customer invent new product or service? The customer generates nothing. No customer asked for electric lights. There was gas and gas mantles, which gave good light. The first electric lights had carbon filaments. They were fragile and inefficient. No customer asked for photography. No customer asked for the telegraph, nor for a telephone. No customer asked for an automobile. We have horses: what could be better? No customer asked for pneumatic tires. Tires are made of rubber. It is silly to think of riding on air. The first pneumatic tires in the United States were not good. The user had to carry with him rubber cement, plugs, and a pump, and know how to use them.
A good question for anybody in business to ask is What business are we in? To do well what we are doing-i.e., to turn out a good product, or good service, whatever it be? Yes, of course, but this is not enough. We must keep asking - What product or service would help our customers more? We must think about the future. What will we be making 5 years from now? 10 years from now?
Nothing can do you so much harm as a lousy competitor. Be thankful for a good competitor.
Profit in business comes from repeat customers, customers that boast about your product and service, and that bring friends with them.
It will not suffice to have customers that are merely satisfied. An unhappy customer will switch. Unfortunately, a satisfied customer may also switch, on the theory that he could not lose much, and might gain.
A company could put a top man at every position and be swallowed by a competitor with people only half as good, but who are working together.
This may be the world's most underdeveloped nation. We're number 1.
Top management should publish a resolution that no one will lose his job for contribution to quality and productivity.
There are four prongs of quality and four ways to improve quality of product and service:
- Innovation in product and service
- Innovation in process
- Improvement of existing product and service
- Improvement of existing process
The common mistake is the supposition that quality is ensured by No. 4, improvement of process, that operations going off without blemish on the factory floor, in the bank, in the hotel will ensure quality. Good operations are essential, yet they do not ensure quality. Quality is made in the boardroom.
A bank that failed last week may have had excellent operations— speed at the tellers’ windows with few mistakes; few mistakes in bank statements; likewise in the calculation of interest and of penalties and loans. The cause of failure at the bank was bad management, not operations.
The moral is that it is necessary to innovate, to predict needs of the customer, give him more. He that innovates and is lucky will take the market.