I recently read a commentary in the New York Times (“Solar Industry Anxious Over Defective Panels”; May 25, 2013, link), and something sounded familiar.

Solar panels that are expected to have a 25-year life span are failing. Coatings are disintegrating and other defects have caused fires. Worldwide, the reports are coming in. The $77 billion solar photovoltaic industry is facing a quality crisis.

This is a moment of truth for the solar photovoltaic industry, and yet, many manufacturers will chose to ignore the opportunity and instead repeat the same mistakes that the American automotive industry did in the 1970s.

Remember the Ford Pinto that could explode if was hit from behind? What about Chevrolet’s Vega that was rusting before it left the factory floor? There were other spectacular flops like the Cadillac Cimarron, Plymouth Volare, Dodge Aspen, all Oldsmobiles, and GM diesel engines: all self-inflicted wounds that damaged once sterling brands for decades and drove sales into the laps of their international competitors.

Then, as now, assumptions are percolating among solar “PV” industry leaders about the “cause” of production problems they obviously do not understand. Is it really just cost-cutting in manufacturing materials that is causing 5.5% to 22% defect rate in solar modules?

I was struck by the comment from Dissigno CEO, Dave Williams: “Quality across the board is harder to put your finger on now as materials in modules are changing every day and manufacturers are reluctant to share that information.” This is the type of thinking that will cost the industry (and their customers) billions of dollars before they resolve this crisis. In fact, isn’t it time to set a firm finger on quality and hold it there until there until something positive happens?

American auto manufacturers learned three valuable lessons from their quality crisis:

1. “Problem solvers” will solve nothing but they will drill through wads of cash with very little to show for it;
2. Nearly all product quality failures begin at the design stage with inadequate specifications, standards, expectations; and
3. No amount of correction at the production and service end will ever adequately “solve” anything; that’s like trying to put out the fire after the barn burns down.

The solar industry must do as the auto industry has done: they must go all the way back to the design stage, dump their assumptions, check all processes, and re-examine everything right down to the basics of how they envision how their customers will use their products. They must deal with the physics involved, even the markets.

Late in the 1980s, the auto industry adopted the practice of “robust engineering” – using extreme conditions of operations the basis of design and engineering. Adding to the quality process, they also considered how people work together and how they discuss and formulate solutions. For the first time, designers, engineers, production managers and marketers got together and discussed not only what the product had to do, but how it might fail.

When you design for the two most extreme operating conditions that your product will experience, you eliminate 95% of the potential cause for failure. If your product must operate in a particular temperature range, you must ask, “Can we add 10 degrees either way to our operating design?” In the same respect, consider also how the product will be manufactured and sold. In this case, designers did not take into consideration possible price competition. Haven’t we learned that cost-cutting is a reality for commerce and therefore qualifies as a “condition of operation”?

This crisis of quality is not, as the writers of the story suggests, China’s problem. While true that Chinese manufacturing has supplied many panels, it is up to the world industry to set the standard. The companies that purchase the modules must set the quality process, be honest about the product design, and resist any compromise.

I appreciate Suntech CTO, Stuart Wenham’s commentary that “we need to start naming names.” In my book, those names should include the engineering directors and executives who missed the big cues and forgot the important lessons of what it means to adopt and maintain a robust and sustainable quality process.

Earthquakes in Haiti and Chile measured 7.0 and 8.8 respectively on the moment magnitude scale. The difference implies that the Chilean earthquake was 500 times stronger than the Haiti earthquake.

While the devastation in both countries was extreme, structural damage and loss of life were far less in Chile than in Haiti.  The difference in devastation is largely attributed to the difference in building standards.

Very few structures collapsed in Chile and the number of deaths was far less than in Haiti even though the Chilean earthquake was 500 times stronger.  In other words, in the case of Haiti, lack of quality can be directly attributable to the damage caused there, while a commitment to quality in Chile minimized what could have been an even greater loss of live than seen in Haiti.

In Haiti, the death toll exceeded 200,000 and the number of buildings destroyed or severely damaged exceeded 250,000 homes and 30,000 commercial structures.  In contrast, the death toll in Chile was less than 2,000 and very few structures were totally destroyed.

While the differences in building standards can be rationalized by noting the differences in economic health with Haiti being one the poorest nations in the world, the cost of poor quality proved to be enormous in Haiti.

Perhaps one of the most critical applications of quality is how it can have an impact on nations and individuals.  The impact of one nation’s choice to pursue or not pursue quality impacts not only that nation but almost every other nation across the globe.  These decisions impact how dollars are spent and what they are spent on.  While it’s often a difficult decision, especially in third world countries, political leaders who choose to ignore quality risk paying a heavy price.

Natural disasters cannot always be predicted, but you can minimize damage to people and places by integrating quality measures into infrastructures and policies.  Whether it is a hurricane, flood, tornado, pollution, or fire, the impact of the economics of quality for nations and their environmental resources can be devastating.

Over the last 50 plus years, Toyota has led the automotive industry in quality and cost. As a result, the company rose to become the world’s largest automotive manufacturing corporation and Japan’s largest corporation with revenues of $230 billion in 2009.

However, this once untarnished icon of Japan’s status as an economic powerhouse, is now in decline and the impact on the company and the entire country is tangible.

As Dr. Masatomo Tanaka says, a professor at the Institute of Technologists, a university that specializes in training engineers, “If Toyota is not healthy, then Japan is not healthy.” As goes Toyota, so goes Japan.

Toyota has long enjoyed near hallowed status in Japan as the greatest practitioner of “monozukuri,” a centuries-old ideal of perfection in craftsmanship central to ancient pottery and sword-making.  The pride of craftsmanship, burned into Japanese culture as the apex of accomplishment, was turned loose on the factory floor and was once the secret to Japan’s postwar “miracle.”

Then something changed. Yes, the earthquake and tsunami last year was a serious blow to Japanese manufacturing, but the decline at Toyota was clear long before the natural disaster. About the time the company achieved its global dominance, rumors began to filter out that management was cutting corners on quality – fewer people on the factory floor, lower quality raw materials and suppliers, reductions in research and development.

The result has been devastating. Shaving a few dollars off the cost of each car has resulted in billions of dollars in recall costs, not to mention the billions of dollars in legal costs the company has incurred from lawsuits filed by customers and government regulators – and in a few cases, possible loss of life. The damage has also been broadly felt: dealerships have lost sales, negatively impacting local economies, and for a time Toyota’s global position fell. But Toyota’s once unblemished record of quality is now questioned in the media and among many customers.

To compound matters, as Toyota moved away from quality, some of its competitors have moved in. Some have embraced their earlier methods to the extent that their products are now surpassing Toyota. Korea’s Hyundia-Kia is rapidly gaining on once dominant giant and Detroit’s big three have partly adopted Toyota’s engineering and manufacturing methodologies and improved their quality as well.

Toyota had the quality mindset before it become the largest corporation in Japan and the largest automotive company in the world.  The company’s actions proved that quality can be the principle driver of efficiency and profitability, but also market dominance. Now the company is learning a new lesson about what happens to giants when they cut corners too often.

After salmonella was discovered in a flavor-enhancing ingredient, a wide range of processed foods were recalled including soups, snack foods, dips and dressings, the result of poor quality control.  Food and Drug Administration officials noted that the ingredient, hydrolyzed vegetable protein, was used in thousands of food products. The FDA and the Centers for Disease Control and Prevention said no illnesses or deaths have been reported – so far.

Currently the recall only involves Las Vegas-based Basic Food Flavors Inc.  The FDA collected and analyzed samples at the Las Vegas facility after one of the company’s customers discovered the salmonella, an organism that can cause serious and sometimes fatal infections in young children and others with weakened immune systems. The FDA confirmed the presence of a strain of salmonella in the company’s processing equipment.

According to the FDA, hundreds of thousands of food recalls per year, again reflecting the impact of poor quality control.  While there are currently no deaths or even illnesses attributed to this recall, the economic impact can be felt in the millions of dollars Basic Food Flavors Inc. has to spend on the recall.

An impact like this leads to less spending in other areas, such as product development or workforce expansion.  The company’s reputation often takes a hit.  These all have a negative impact on the economy.

Add on the class action suits that generally result after a large recall like this and the impact becomes even greater.

More than 2.1 million drop-side cribs by Stork Craft Manufacturing were recalled, the biggest crib recall in U.S. history.  In a 2008 scare, milk from China laced with the industrial chemical melamine led to the deaths of six babies and sickened 300,000 others who had been fed baby formula made from the tainted dairy.  Lack of adequate quality programs led directly to these defects.

By paying attention to quality, fewer cases of food borne illnesses arise, and fewer injuries from defective consumer merchandise occur.  This means fewer dollars spent correcting problems, and more resources made available for product development.

For decades now, we’ve made the Quality Department the epicenter of our quality policy. But has this attention been misplaced? My contention is that the reason we have failed to deliver resilient and sustainable quality from American businesses is that we are too focused on the metric of quality. We have turned a qualitative question into a quantitative one, and that simply will not work.

My latest endeavor, an extension of my philosophical backbone to make quality accessible to the masses, centers on the notion that Quality is Everyone’s Business or “QIEB” as I call it.  What I propose is that we expand our notion about Quality beyond the quantitative mindset of controls and processes. As I see it, Quality is about relationships – relationships that involve all people, all the time. Taking that idea one step further, that definition of Quality, especially in the business world, has far greater reach and impact than the controls and processes exercised by one department. If you really stop and think about it, the impact you seek can and should be felt everywhere. Why then should we limit ourselves?

I have come to see that there tends to be one function inside most organizations that really has both the ability and the need to reach every person on a regular basis: it’s Human Resources. Human Resources is the wheelhouse of the workforce; the one department function that holds the interest of every employee at every level of the organization.

Human Resources is often perceived as non-threatening, but also powerful and influential. It’s the one place where management goes to implement training, company-wide policies, distribute compensation and make regular communication with the workforce multiple times throughout the year. And ideally, as I seek to make Quality everyone’s business, who better to lead that effort than someone (some organization) that has the ability to touch everyone in the organization? That’s why I believe that HR is the ideal standard-bearer to carry out what is essentially an acculturation program for the members of the organization – changing the age-old notion that responsibility for Quality should reside solely within the quality department.

Whatever the source within the company, I believe that it is of fundamental importance that there is a new Quality message – that Quality is Everyone’s business, not the responsibility of one department. I believe the pursuit of “key” or “critical to success” factors to be the utmost responsibility of everyone in any organization, but especially Senior Leadership. Leaders in the organization must play that vital and essential role of ensuring that the rally around Quality is consistent, sustained, and properly understood by everyone, each time, ever time.

Do you want to change your organization – to transform the rank and file members so that they WANT to achieve true Quality? Of course you do – who doesn’t.

But even the most perfect retraining process will fail if you do not gain firm commitments from the people you are asking to implement the change. And that would be everyone in your organization. I have learned that when companies force a process on their workforce without first receiving their commitment to participate, the rank and file employee will become resentful and they’ll fight change – even when they know that change is for the better.

Now, I ask you to apply that reality to other situations – government, education, business, your family – without willing and full cooperation of everyone involved, implementing even a small change is difficult if not impossible. When we want to bring about change, we must ask for the utmost commitment from every active member – including ourselves. This is also true for my own change process, “Quality Is Everyone’s Business” (QIEB). I cannot ask a client company to implement a change in their quality process without first knowing that certain fundamentals are met.

In my book, The Power of LEO, I laid out these fundamentals – I called them the “Four Cornerstones.” These are the basic ground rules that can make the difference between a process that fails, or one that leads the organization toward a sustainable pathway of change.

First, I ask that people say to themselves and others, “Quality is MY responsibility.” This personalizes the pathway as a self-actualized mission. Quality is not someone else’s problem. Quality is the personal pursuit that is reflected in every aspect of “my” work. Thus it becomes their personal belief that they can make a difference.

Second, everyone must accept that Quality must involve ALL the people, ALL the time. In effect, you will deputize the rank and file members of your organization to recognize a problem and solve it. If trashcans are overflowing with trash, the janitor is empowered to request larger receptacles. People must act as they would if they saw a burning fire – filled with the belief that they have the solution to make a lasting impact.

Third, everyone must adopt an “I-can-do-it-Mindset.” There is a straight line between the leader’s policies and the behavior and attitudes of the employees that follow, and that line continues on into the quality quotient. For the Quality transformation to be sustainable, management needs to instill confidence among rank and file members of the organization; build up the belief that responsibility is the only answer.

Finally, we must also assume that ‘one-size’ does not fit all. It’s always tempting to look for a policy (framed by some handy slogans) that can be applied across the board to any and all situations. It would make life so much simpler. But haven’t we already learned that such solutions are counter-productive? In an earlier article, I demonstrated how individual response to quality can be very different from person to person. Moreover, there are so many special cases and exceptions that any set policy itself becomes irrelevant the moment it is enunciated on the organization. Therefore, doesn’t it make sense to allow every individual to arrive at their own reason to believe in Quality?

I have seen situation where these Four Cornerstones act as a catalyst for acculturation. People tend to push each other along toward improvement. And as people improve, they are encouraged to do more. At the end of the day, it isn’t the process of change that’s important. What is important is the belief that the change is making a difference. That’s how I believe that Quality will become Everyone’s Business.