Quality & Performance Excellence 6th Edition by James Evans

Exercise 4

David Kearns and the Transformation of Xerox
David Kearns, former chairman and CEO of Xerox, provides an excellent example of leadership for quality. Xerox's problems in the early 1980s were legion and typical of American manufacturers facing serious foreign competition for the first time. Xerox discovered to its horror that Japanese companies were able to sell copiers in the United States for roughly what it cost Xerox to build them. Its former lion's share of the copier market had dwindled to a paltry 8 percent. Even at the time, Xerox was hardly complacent: Productivity was increasing by as much as 7 or 8 percent every year. Kearns calculated that gains closer to 18 percent a year were needed to catch Xerox's competitors.
About this time, Kearns read Philip Crosby's book, Quality Is Free, and invited Crosby to address Xerox's management. Kearns's pleas for change initially were resisted by a management team who said they were already doing everything they could. This led Kearns to tell his managers that trying to change Xerox was like "pushing a wet noodle." It was time for more drastic action.
In 1983, the top management team at Xerox designed a new approach to quality that was dubbed "Leadership through Quality." The central principle of the new approach was that quality would be defined as customer satisfaction, not internal standards. If customers were not satisfied, quality had not been attained. A second principle was to focus on processes, not just outcomes.
In the past, poor outcomes were an occasion to blame someone and to hammer into them the importance of doing better. This was replaced with an approach that focused on examining the process that had created the outcome and improving it.
In order to operate according to these principles, a number of specific practices were undertaken. Xerox is perhaps best known for its extensive use of benchmarking-a process by which a company compares its operations to the best practices of other companies. The company's approach is to benchmark against the best, in whatever industry it is found. Xerox has benchmarked its billing processes against American Express and its distribution processes against L.L. Bean.
To demonstrate their commitment to these principles, Kearns and his management team were the first to undergo the newly devised quality training. They then became the teachers for the next level of management, and training flowed throughout the organization in this manner. In a move that represented a major departure from tradition, each senior manager was made responsible for taking calls from customers one day a month. Xerox managers still interrupt their meetings to take such calls.
Although Kearns's efforts were crucial to this process, he believed that leadership must (and in this case did) come from other sources as well, including the Amalgamated Clothing Textile Workers, the union representing Xerox's production employees. Xerox also learned that it was important to have union leaders as deeply committed to the quality process as management. A strong and enlightened union leadership shared management's vision and understood that changes had to be made if there was to be a future for all Xerox employees. The union leadership and management shared each other's trust.
Xerox's competitive resurgence was dramatic. Market share, revenues, and profits recovered substantially. In 1989, Xerox became one of the first winners of both the American and Canadian National Quality Awards.
Kearns believed that "Xerox was probably the first American company in an industry targeted by the Japanese to regain market share without the aid of tariffs or government help." Despite the recovery and the awards, however, Kearns did not abandon the principle of continuous improvement. At the time, he stated: "We take great satisfaction in winning these awards, but the fact is that we're far from finished with our drive to improve. We have learned that the pursuit of quality is a race with no finish line. We see an upward and never-ending spiral of increased competition and heightened customer expectations."
David Kearns was succeeded as Xerox's chairman in 1991 by Paul Allaire. Kearns is now working within the U.S. Department of Education to bring the quality perspective to America's schools.
Discussion Question
Is Kearns's approach broadly applicable, or would different approaches be needed in other settings