15 years ago— we had just implemented a Net Promoter feedback system, I had to do my first follow up call to a Detractor, an apparently very angry lawyer who hadn’t received his shipment in time. I wasn’t really looking forward to that. But I was in charge of implementation and we hadn’t assigned responsibility for following up with unhappy customers yet. So I called him and listened to a five-minutes rant. Now I was really scared. But I stayed calm. I listened. And I understood his frustration. Once I could get a word in, I apologized and explained what had happened. Some information had been missing in the paperwork, contact details had been wrong. That’s why it couldn’t be cleared on time. Again I apologized, yes, we should have handled that better. I made a note to look at the process. Somehow we continued talking and got to the subject of football and discovered we were both FC Basel fans. That somehow clicked. Also we had some of the same profs at university. We established a good connection. We stayed in contact over the years. He still ships with the company — fifteen years later.

Since he is just someone I chat with every once in a while and I am not a sales coach I never analyzed what happened in that first conversation. But something had happened there. Something that made him like the company more. And for me, it was a good experience, a good work day. Was it a mutual love of a particular football team, something totally unrelated to the business? I could never quite tell.

The Board Room Version: Quality Management is an old hat — it just never quite fit. Everybody understands that customers define quality. Drucker 1954, Ishikawa 1961, Deming 1982, Normann 1984 — four traditions, four decades, one conclusion. Everybody accepts it superficially. Even the boardroom nods. The implementation is the problem and it is a choice, not a knowledge problem. Quality is really value creation because it shifts the view from internal to external reference. Normann explains that the customer is inside the value creation process, not at the end of it. Normann also introduces the moment of truth where employees interact with customers to create value. Here all the good and the bad a company produces affects the customer. Decision making, structure, culture, control, mental health, evaluation — the customer experiences all of it. Ishikawa develops that further with true – customer – quality characteristics vs the substitute, internal KPIs. Internal data artifacts are a poor replacement for genuine customer feedback. Deming warns of people that never become customers or switch because of quality issues. But the bigger issue is the silent customer, never complains, just disappears. This is the ultimate failure — a feedback loop that never closes.

It is so obvious for me to write about customers and quality that I put it off forever. Of course it’s important but it’s also very close to what I do day in and day out, it’s the reporting, the initiatives, the newsletter, the trainings. Is it without issues? Hell, no. Because quality management is not just daily work for me but also daily frustration. The never ending fight for place one on the company’s priority list— still a losing battle if you have shareholder value on the same list. It’s the endless discussions on definition for the last twenty years, although it should be obvious for everybody by now. Quality is defined by customers. Full stop. No discussion, nothing else makes sense. 

What else is not helping? All the dangerous quotes of the classics on LinkedIn and in pop literature. They are true sentences cut away from the system that made them true. “Quality is everyone’s responsibility” — it’s Deming paraphrased, not direct — gets misused by management to shift responsibility down. Deming made it very clear that quality is mainly the responsibility of top management. But everybody contributes. “Quality is free” — classic Crosby— should actually say that non-quality costs more. That’s what he really meant. “You cannot inspect quality into a product” — attributed to Deming but it is actually Dodge. It means you should not be dependent on controls but it does not mean to absolutely abandon them. “Quality means fitness for use” — that’s Juran— and it’s actually quite good. Fitness for whose use matters, of course, because an umbrella will always make a bad baseball bat. Generally, as we have seen before: The simple quote survives. The thinking dies. So this is worth diving into deeper.

Quality is actually not the best word for the discussion, that would be value. Quality is generally seen as matching a fixed set of requirements. That can be some standard or specification— the bad version— or what we think the customer is specifying. But in both cases it is an internal view, a comparison against what we have defined. Value on the other hand is a comparative word with an external reference. Something has a value compared to something the customer brings— what they have to pay, what they expected, what they actually needed. Only the customer can say if it has value. Drucker was among the first major management thinkers to state it with absolute clarity: “What the customer thinks he is buying, what he considers ‘value,’ is decisive.” Value is defined by the customer. Only they can tell because only they can compare it to their own reference point. Drucker wrote that in 1954. Since then we had a lot more of the heavy hitters in quality management saying similar things— Ishikawa 1961, Deming 1982, Normann 1984. So the idea is pretty much universally accepted. The boardroom would nod in unison. But the idea is not the issue, the implementation is.

And the wording matters in implementation too. Quality is something you check— against specifications. Value is something that gets created. Why the funny passive formulation? Instinctively we would say the company, or if we are more people oriented, the employees create the value. No, that is not entirely true. Richard Normann described it best in his book “Service Management” in the 1980s. The customer is not the recipient of value. They are part of the creation process. Only through them can value be realized. The customer brings time, cooperation, expectations, constraints and usage into the game. Only with all of those things— and our processes and effort— value can be created. Just think of a product that nobody ever gets to use. No fun. No benefit. No value. 

And with that go all the slogans like “All for the customer”, “Customer is king”, “Delivering Excellence”, “We serve our customer”. All treat the customer as a passive recipient of a service or product, when they should be viewed as part of the process.

It was also Normann who introduced the term Moment of Truth into service management. In these instances the customer and the employees interact and create the value together. All the plans, the system, the promises, processes and management intentions become real in this instance. Therefore it is very important to build the system around these interactions. Otherwise they cannot work. That is one of the key problems that quality management sees today. We are quick to nod at the idea that we all do it for the customer — quite frankly because we want their money and it is kind of polite to say so — but we are not building processes and systems that make value creation together with customers possible. That is why my lawyer friend was so pissed.

Instead we still have the same old production processes: input of resources, production, delivery of output. These can if we are lucky result in a positive customer experience but as often as not they do not. What certainly will happen is that the customer ends up being on the receiving end of all malfunctions in our system. And as we have seen, there are many possibilities for that. Decision making based on unverified assumptions. Unclear structure. Ignored changes in customer requirements. Inflexible processes due to too much control management. Stressed employees due to negative work conditions.

The issue of systems designed without customer participation also comes to the surface in how we measure. Kaoru Ishikawa— yes, the fishbone guy— already realized in the 1960s that there is a difference between true quality characteristics— what the customer actually needs— and substitute characteristics that we as a company measure instead. This gap used to be very wide when we just sort of guessed what was important in a product for a customer. Later with Total Quality Management and Six Sigma the translation from customer view to internal view became more refined— Voice of the Customer to Critical to Quality— but it is still based on the view of an average customer. 

The thing is that this average customer is a fiction. They do not literally exist. And we can create as many segments and personas as we want — they all remain a grouped average, a fictional customer. Why was this done? Partly because mass production and mass service delivery made it necessary or at least easier. It is kind of hard and very expensive to produce a car tailor made for each individual customer. Instead we tried to find the lowest common denominator. The problem is that this can very rapidly lead from a good product for many to an average product for nobody.

Newer approaches in gathering customer needs, for example via customer feedback methods like the Net Promoter approach, have brought some more realism and immediacy into the game. But by concentrating on customer satisfaction scores we end up again with a fictional average. Large language models have changed this — for the first time it is practical for far more organisations to analyze thousands of open customer comments in something closer to the customers’ own language, not stars or a number between zero and ten. But this does not automatically solve the issue. It is just a new and better tool. The work is still tricky. In my reality I see that while some issues are shared by the majority of customers, we also get voices that go in completely opposite directions. “I want more features” — “I want a simple product”. “I need more information” — “Don’t bother me with too much information”. “I want blue pills”— “I want red ones”.

There are many more of these problems within quality management. B2C — business to private customer — has always dominated the discussion in the practitioner literature and in the way practitioners view the situation. B2B — business to business — is looked at much less, although it reveals some interesting points for better and worse. For worse: in B2B price becomes a much more dominant factor in customers choosing a certain service or product. Companies feel the immediate cost pressure on their side and the value experience is not a personal one but a corporate one. It is not “I like this smartphone, the experience of using it is nice” but “The company has to have smartphones, they should not cost too much, security needs to be guaranteed, administration has to be easy and by the way employees should also not hate to use it.” I have learned that this is just a much harder value creation process. It works the same way as with private customers, same basic model. Value is created with the customer, it is a comparison to something the customer brings to the table — business customers just have more to bring. A bigger rucksack so to speak. 

The better side of B2B actually comes from an idea in Deming’s “Out of the Crisis” where he describes that businesses should build long-term relationships with their suppliers. Long-term collaboration leads to better quality through active exchange between the two sides. And although Deming does not reference Normann, this is exactly the inclusion of the customer into the value creation process, just from the other side.

So the key is that customers become part of the value creation process and that we have to be aware that they feel all the effects of our system, including the bad ones — even something as remote as how motivated and healthy our employees are.

But no matter how good or bad our system is, whether private or business, with all the customer satisfaction dashboards in multicolour and AI-driven feedback analysis, I still see one big problem that is not addressed. Deming warned of people who will never buy your products — the non-users — and of dissatisfied customers who switch due to quality issues. My biggest concern has always been somewhere in between. The customer who does not complain. They do not return the product, do not fill out the survey. They just disappear. They silently become non-users. They are the biggest failure of quality management, of any system and any company.

No fancy dashboard or smart survey will solve that. The best approach is not to deliver value to the customer but to create it with them. Normann was right forty years ago that our systems have to be designed with the customer inside them. Not as a recipient, not as a data point, but as a participant. Because that’s what he truly is. That’s not new, I know, it was just the idea that was never implemented.

But even then something is still missing. Participation requires interaction, direct, personal, one-to-one. We have come from ignoring customers to creating fictional customers to analyzing large numbers of individual customer voices. But how can we ensure that sometimes we just talk with customers — an actual customer, not to sell, not to get a gold star, but just to talk about football and what a moron that referee was.

I guess there is more to explore.

Is your company producing for the customer or with the customer? Discuss — LinkedIn

Don’t just take it from me, here is some good stuff to read:

Peter F. Drucker, The Practice of Management, Harper & Row, 1954.

Richard Normann, Service Management: Strategy and Leadership in Service Business, Wiley, 1984.

W. Edwards Deming, Out of the Crisis, MIT Press, 1982.

Kaoru Ishikawa, Guide to Quality Control, Asian Productivity Organization, 1968.

Kaoru Ishikawa, What Is Total Quality Control? The Japanese Way, Prentice-Hall, 1987.