93
Qualities of an exceptional leader
Louis E. Schultz
BlueFire Partners, 150 South Fifth Street, Suite 1300,
Minneapolis, MN 55402-4206, USA
Tel.: +1 612 344 1030; Fax: +1 612 344 1030;
E-mail: lschultz@bluefirepartners.com;
http://www.bluefirepartners.com
In preparation for his key-note speech to the Philippine So-
ciety for Quality annual conference in October of 1999, the
author reviewed the messages of the quality masters detailed
in his book, Profiles in Quality. Analysis of these messages
revealed three major groupings – Leadership, Direction, and
Action.
The Leadership element has five components – Roles and
Responsibilities, Appreciation for a System, Knowledge of
Variation, Theory of Knowledge, and Psychology. Four out
of five of these components fell into place coinciding with
the four elements of Dr W. Edwards Deming’s Profound
Knowledge. The components of Direction are Aim, Plan-
ning, Implementation, and Review. The elements of Action
fit a model developed by Dr Noriaki Kano, which he calls
the House of TQM. These are General Education, Intrinsic
Technology, Motivational Approach, Concepts, Techniques,
Vehicles, Strategies, and Customer Satisfaction.
This paper presents a structured composite of theories and
concepts of the Masters from which we can learn and apply
in our personal development and in the improvement of our
organizations.
Keywords: Leader, leadership, quality, performance, im-
provement, profiles in quality, direction, strategy, action,
strategic planning, system, variation, knowledge, profound
knowledge, house of quality, concepts, techniques, vehicles,
customer satisfaction, masters, consulting, theory, data, lin-
eage of quality, six sigma, role of leadership, coach, coun-
sel, philosophy, organization, appreciation for a system, man-
agement, prediction, common causes, special causes, com-
petition, global competition, aim, planning, attractive quality
creation, employee satisfaction
Introduction
Sometimes we think there is nothing new in the field
of quality and sometimes we think there is too much
that is new. I decided to go back and re-study the qual-
ity “Masters” to get a better feel for how the elements
Human Systems Management 19 (2000) 93–103
ISSN 0167-2533 / $8.00  2000, IOS Press. All rights reserved
Lou Schultz is a partner and managing
director of BlueFire Partners, formerly
known as Process Management Interna-
tional (PMI), one of the nation’s preem-
inent management consulting and lead-
ership development organizations. PMI
was founded by Mr Schultz in 1984
and merged with the other partners in
1997. The company’s mission is to assist
private and government organizations
worldwide to improve performance of
their enterprises.
Mr Schultz is recognized internation-
ally as a leader in the field of quality
improvement. He has helped numerous clients, including Artesyn
(Zytec), Chevron, INCO, Jaguar, Manitoba Hydro, Tredegar (Ethyl),
and Wal-Mart, to develop and nourish within their organizations the
exceptional performance, superior quality and extraordinary agility
necessary to thrive in today’s dynamic marketplace.
Mr Schultz was a friend and follower of W. Edwards Deming, the
world-renowned father of quality and namesake of the Deming Qual-
ity Award. In addition, Mr Schultz is a frequent speaker at national
and international conferences and has written and published numer-
ous articles on modern management. He is author of Profiles in Qual-
ity: Learning from the Masters and co-author of the Quality Hand-
book for Small Business.
Mr Schultz serves on the editorial board of Human Systems Man-
agement and is a founding member of the Asia Pacific Quality Or-
ganization. He was an adviser to the Deming Forum of Minnesota
and a recipient of the University of Minnesota’s 1987 Professional
Partnership Award. He also served as a judge for the 1991 Minnesota
Quality Award and as an advisor to judges of “His Highness Sheikh
Khalifa Industrial Award” of Abu Dhabi in 1998 and 1999. He served
on the board of directors of the Minnesota Council for Quality from
1987 to 1997 and on the board of directors of PMI Ltd. from 1992–
1998. Mr Schultz is listed in Who’s Who in America and Who’s Who
in the World.
Mr Schultz holds a bachelor of science degree in electrical engineer-
ing from the University of Nebraska and a master’s of business ad-
ministration from Pepperdine University.
of quality fit together. I learned that some are constant,
some are evolving, and some are changing.
To develop our concepts of the leader of the future,
we can learn from studying the teachings of the Mas-
ters in the field. Who are these “Masters” and why did
I select them? They are the people I learned from in my
career. They were great role models, always learning
themselves and teaching others. Dr Deming took mu-
sic lessons until he was nearly 90 years old. Nor did he
ever let up with his teaching, completing his last four-
day seminar just ten days before his death at age 93.
For those of us with the honor of assisting him,
Deming would quite often correct us on our gram-
94 L.E. Schultz / Qualities of an exceptional leader
Fig. 1. Lineage of Quality.
mar in front of an audience of 600 or more attendees.
I had the privilege of assisting Dr Deming many times
at his four-day seminar. One day at a private seminar
for US Naval personnel in Jacksonville, Florida, Bill
Scherkenbach and I were the assistants. When it came
time for our part, we took the stage and Dr Deming sat
down but he still had his microphone on. He listened
carefully as I started to say that it was a pleasure for
Bill and I to be there. Before I could finish the sen-
tence, he bellowed, “Bill and me!” I learned quickly
the proper grammatical use of “I” and “me”.
Walter Shewhart, W. Edwards Deming, and Myron
Tribus are three Masters who used the Socratic Dia-
logue method of consulting. They asked simple ques-
tions, criticized answers, and poked holes in faulty
arguments. They used this method not to put others
down, but to teach. Those who spent time with them
found it somewhat uncomfortable but always a great
learning experience.
You might ask where did these “Masters” learn? To
the best of my knowledge, their tutors are as shown in
the above chart. I explored where the Masters learned
to find the source of the wisdom they acquired and then
developed further. The chart is by no means complete
but it did reveal that the basic premises go all the way
back to the ancient Greek philosophers. These truths
have been with us for centuries and it is our job today
to continue to uncover these eternal truths and apply
them to our organizations.
The Masters developed theory and tested it with
data. Theory can never be proven. It can be supported
or disproved but not proved.
The Masters never stopped learning. They contin-
ued to test their theories, modify, and learn more. Nor
would they let those around them stop learning. As I
mentioned, I had the privilege of assisting Dr Deming
26 times and I learned more each time. It was almost
embarrassing as I would say to myself, why didn’t you
understand that before?
What I discovered in my research of the Masters’
works is that their theories could be grouped into three
basic elements of organizational performance – Lead-
ership, Direction, and Action. Everything else supports
these three.
The Leadership element has five components –
Roles and Responsibilities, Appreciation for a System,
 L.E. Schultz / Qualities of an exceptional leader
Knowledge of Variation, Theory of Knowledge, and
Psychology.
The last four components are what Deming called
A System of Profound Knowledge. According to Dem-
ing, management, as developed in the 19th century
and continued during the 20th century, is the major
cause of waste, rework, and untold losses. Emphasis
on short-term results, outdated personnel ranking prac-
tices, and failure to understand a system are responsi-
ble for losses of both human and financial resources so
great that the total amount will never be known. “The
prevailing style of management has led us into de-
cline”, Deming said. “Transformation into a new style
of management is required. The route to take is what
I call profound knowledge. It is not automatic. It must
be learned; it must be led”.
The components in Direction are Aim, Planning,
Implementation, and Review. These are not broken out
separately in this paper as Implementation is treated in
the Action element and review is part of Measurement.
The elements of Action fit a model developed by
Dr Noriaki Kano, which he calls the House of Quality.
Kano has contributed several important concepts such
as the Attractive Quality Creation method of obtaining
breakthrough creation of products and services. But, he
may be best known for his theory and graphic, which
provide a model for understanding quality and what it
demands of those who wish to achieve it.
“If we think of Total Quality Management as a com-
plex, interconnected structure of ideas, practices, and
values, it may be compared to a house”, says Kano.
The ground beneath the house represents the general
education and mores of society. Upon that rests the or-
ganizational foundation of intrinsic technology, then a
ground floor of motivational approaches. Three pillars,
concepts, techniques, and vehicles, hold up the roof of
the organization, that is, its purpose, which is assuring
quality and customer satisfaction.
Following is a composite of theories and concepts of
the Masters from which we can learn. The various con-
cepts are noted so you can trace the source and study
more of the details associated with those that interest
you.
1. Leadership
The Leadership element has five components –
Roles and Responsibilities, Appreciation for a System,
Knowledge of Variation, Theory of Knowledge, and
Psychology. I will elaborate on each of them with the
95
Masters’ theories/concepts numbered for your conve-
nience in identifying the source if you choose to study
further.
1.1. The role of leadership
History will remember Walter Shewhart, not just
for originating the control chart, but for understanding
and teaching a management philosophy that stressed
leadership and customer satisfaction long before those
terms were buzzwords. (The highest executives in any
company must be personally involved in efforts to im-
prove quality) [1].
Experience has taught us that it is not sufficient for
the top executives to permit quality or performance im-
provement efforts within the organization, they must be
personally involved and, in fact, be driving the entire
activity. I was explaining the House of TQM to a co-
worker and why six sigma was a different vehicle than
its predecessors. I said that six sigma differs in that it
is truly driven by the chief executive and the board of
directors. It has always been wishful thinking to have
the top executives involved in the other vehicles but,
in reality, they gave lip service and deployed or dele-
gated the responsibility downward in the organization
in most cases. She responded, “Oh, you mean this ve-
hicle has a different driver”. Her metaphor is very ac-
curate.
What is the role of leadership? (The aim of lead-
ership should be to help people, machines, and gad-
gets do a better job) [2]. Effective leadership sets di-
rection, improves performance [taking focused action],
and produces results. Leadership accepts that people
want to do a good job and be proud of their work. The
role, then, is not to motivate and inspect but to remove
roadblocks that will permit the people to do better work
and provide direction for the organization.
(The leader’s job is to:
– Find out who is in need of special help and see
that they get it;
– Coach and counsel;
– Understand variation;
– Remove obstacles;
– Focus on customer;
– Understand the mission on the company [con-
stancy of purpose];
– Improve the system;
– Create an atmosphere of trust;
– Know the job, how it fits the overall product;
– Forgive a mistake) [2].
96 L.E. Schultz / Qualities of an exceptional leader
Fig. 2. Employee time allocation for continuous improvement (developed by Myron Tribus).
Quality education and philosophy begins at the top
of the organization [7]. Expect and insist upon proud
craftsmanlike performance [5]. Zero defects is not a
motivational slogan. It is a management performance
standard [7].
Managers’ attitudes reverberate through the organi-
zation and those with no interest in total quality control
should be weeded out [10]. And, why should they have
an interest in total quality control? The Japanese have
only one word for both control and management and
I think that is a lesson for us. I have used these words
interchangeably in this paper. I also view quality and
performance improvement as interchangeable terms.
Deming quotes Julian Huxley, “A practical man
is one who practices the errors of his forefathers”.
Change is upon us. It is not optional [2]. Technology,
quality, cycle time, cost, delivery means from producer
to consumer, leadership, and customer expectations are
changing at an ever-increasing pace. We cannot stand
still.
Quality control should not be practiced simply be-
cause it is fashionable. Its purpose is to rationalize in-
dustry, establish technology, and enable companies to
develop the ability to secure good profits and beat inter-
national competition [9]. Quality control must be con-
tinued throughout the life of a company [9]. Get ev-
ery department involved in a commitment to total qual-
ity [3]. Communication must be extensively transmit-
ted to all employees to sow the seeds of participative
management [4].
Myron Tribus developed a very useful chart to dis-
play how people should divide their time between op-
erations, improvement, and future.
Deming ranged from an unchallenged mastery of
statistics to a crusade for greater understanding of the
new role of management. The philosophy of this new
role of management, which he called Profound Knowl-
edge, consists of four parts.
1.2. Appreciation for a system
The second component of Leadership is Apprecia-
tion for a System. We all work in a system and we
need to make decisions with the benefit of the system
in mind.
A manager’s role is to understand how the organiza-
tion works as a system and to know when and how to
optimize the system [2]. Micro-management, improv-
ing one part of the organization at the expense of an-
other, demanding results from people that the system
is not capable of producing, and automating faulty pro-
cesses are examples of mistakes managers make when
they do not understand the system of work.
The organization must have a well-defined process
to:
– Recognize a system;
– Define it so others can recognize it;
– Analyze its behavior;
– Work with subordinates in improving the system;
– Measure the quality of the system;
– Develop improvements in the quality of the sys-
tem;
– Measure the gains in quality, if any, and link these
to customer delight;
– Take steps to guarantee holding the gains [8].
Product defects are rarely the fault of the worker; the
process, established and controlled by management, is
more likely to be at blame [1]. Workers work in the
system, management works on the system [8].
People are trying their best. They have an intrinsic
desire to improve themselves [2]. Deming really be-
 L.E. Schultz / Qualities of an exceptional leader
lieved that people were doing their best and always
concluded his four-day seminars by saying, “And now
I leave you with five words, I have done my best”.
Only about 20% of all problems are caused by the
workers [3]. Juran uses the Pareto concept to empha-
size that the people are victims of the process within
which they work. They are responsible for only a triv-
ial small part of the problems, management is respon-
sible for 80% of the problems because they have the
responsibility for changing the processes. Deming in
his later years stated that management was responsible
for 94% of the problems.
Management is the major cause of:
– Waste;
– Rework;
– Untold losses [2].
Management must understand their system and how
it works before they can make any recommendations
for improvement [2].
1.3. Knowledge of Variation
The third component of Leadership is Knowledge of
Variation. Nothing is exactly the same, for example, if
you bought a sack of nails, if examined under a micro-
scope we would discover that there are minor differ-
ences between each nail.
Managers must have a knowledge of variation,
which exists in everything – systems, services, people,
and nature. Understanding what a system can do, and
what it cannot do, depends on having statistical data
and knowing how the data was obtained. The past is
helpful to us only if it helps in the future, if it predicts.
Management is prediction [2].
Deming gave lectures to top Japanese business lead-
ers regarding the importance of management’s under-
standing of statistical methods. There are no absolute
truths, only data from measurement of observation. For
example, our perception of the value of the speed of
light has changed over the years as we developed new
methods to measure it [2].
Dr Deming used to give the example of the speed
of light. What was considered to be the absolute speed
was changed several times over the years as we de-
veloped new ways to measure it. He jokingly credited
Galileo with saying that if the speed of light is not in-
finite, then it is awfully fast.
Like Shewhart, Deming identified two ways to im-
prove work processes; resolving “special” causes of
variation and reducing “common” causes of variation.
97
Managers must know the difference. Special causes of
variation appear on a control chart as a point lying
outside the calculated control limits or as other non-
random patterns. A manager should ask, “Is the pro-
cess performing in a dependable, predictable way over
time, with no evidence of assignable causes of varia-
tion?” If the answer is no, the process is not stable, that
is, there are sources of variation that are not part of
the process. These are called special causes of varia-
tion, which must be identified and resolved before the
process can become stable. The elimination of special
causes is often the responsibility of someone working
directly with the operation. Common causes, or prob-
lems with the overall system, are the responsibility of
management. Common causes of variation are those
inherent in a system. Management’s efforts to reduce
variation must be unceasing and must be consistently
communicated to the workers.
1.4. Theory of Knowledge
The fourth component of Leadership is Theory of
Knowledge. Leaders need to understand how people
learn.
Deming was fond of saying, “Experience by itself
teaches you nothing. You must have a theory. A state-
ment devoid of rational prediction does not convey
knowledge”. Learning requires comparison of results
with the original prediction or theory [2].
Measurements or observations are the basis for pre-
diction and theory [2]. Control charts are analytical
tools that help us understand the capability of our pro-
cesses and what to expect in the future. If we are not
satisfied with the nominal position or the amount of
variation around the average, then we must change or
improve the process.
The lead article in a major US newspaper recently
reported on the results of the secondary school stu-
dents. They were shocked to find that half were below
average. This is not news. It is reasonable to expect
that about half will always be below average [or tech-
nically speaking, the median]. The article went on to
say that those schools that were below average three
years in a row are suspect and put on probation. Statis-
ticians know that they are probably victims of normal
variation. A school would have to be below average
for seven periods in a row to be considered especially
bad. The leadership of this particular educational sys-
tem apparently do not understand this and may be mak-
ing matters worse by pressure to “do better”.
98 L.E. Schultz / Qualities of an exceptional leader
Leaders lead. Everyone is learning so much so fast
today that the leaders must never sit back and think
they know enough. Leaders must learn at a faster pace
than their employees and that is a challenge. You can-
not lead what you do not understand, you cannot un-
derstand what you have not done [8].
1.5. Psychology
The fifth component of Leadership is Psychology.
Generation gaps, attitudes, work habits, independence,
are examples why the leaders of today need to have a
working knowledge of psychology.
A manager must have some knowledge of psychol-
ogy to better understand people to optimize their abil-
ities. Management too often operates under the suppo-
sition that people are all alike [2]. Deming said that
in fact, they are quite different from each other, hav-
ing different ways of learning and different values. In
other words, there is variation between people as well
as processes. There are some basic premises about the
psychology of people that we need to understand:
– Everyone is born with a natural inclination to
learn and be innovative [2].
– Everyone in the organization needs to understand
the need for harmony and cooperation [4].
– The most elusive edge in the new global competi-
tion is the galvanizing pride of excellence [12].
– Treat workers with respect [5].
– One inherits a right to enjoy his work [2].
– Drive fear out of the workplace in order to em-
power employees at every level to work toward
performance improvement [2].
To get everyone involved in the quest to improve
productivity, we need:
– Commitment by everyone;
– Ownership of the work and organization;
– Feedback, up, down, and across the organization.
Information keeps the sense of commitment and
ownership alive [4].
2. Direction
The next element of the qualities of an exceptional
leader is Direction. It is composed of four components
– Aim, Planning, Implementation, and Review.
Strategy, like, leadership, is an elusive concept.
Merriam-Webster’s dictionary defines it as “the sci-
ence and art” of conducting a major campaign to
achieve some objective. Strategy is the idea on how to
achieve goals. It is based partly on prediction. That is,
if certain activities are carried out effectively, the aim
is achieved. Deming has made it clear that the leader-
ship of the organization must determine its aim and es-
tablish a system for getting all employees involved in
it. Management must determine where the organization
is headed in the long term, and what ideal conditions,
strategies, and values can get it there.
Management must state a system’s aim so that
everyone can understand and be guided by it [2].
A farmer knows he must provide guidance to his team
so they are pulling together. So must management pro-
vide guidance to employees so they are pulling to-
gether to reach their common goal.
The word theory comes from the same Greek root
word as theater and means, “to get a view of, to under-
stand”. Knowledge gives us a basis for planning [2].
Deming said there is no substitute for knowledge and
that is certainly true for management to determine
proper direction for the organization.
Just as strategic planning is a requirement for the or-
ganization, so is planning required for the performance
improvement activity. Quality does not happen by ac-
cident. It must be planned and that planning must begin
with top management [3].
Akao makes a useful distinction between planning
and designing. Planning is determining what to make,
designing is deciding how to make it [11]. Akao’s
Quality Function Deployment technique is very use-
ful in comparing customer needs with features of our
products or services. Kano’s Attractive Quality Cre-
ation concept helps to identify the articulated and unar-
ticulated customer needs, which feeds into Akao’s
Quality Function Deployment model to help us move
into a leadership position in our industry [2]. This leads
us to take focused action.
3. Performance improvement action
The final element of the qualities of an exceptional
leader is Action. After we have analyzed our leader-
ship style and made appropriate changes in our behav-
ior, determined and communicated the direction of the
organization, we need to take action to achieve results.
If you want to be ahead, then you have to get ahead,
said Deming.
If you want to be a leading organization, then you
have to take action. For those who understand their role
of leadership and have provided clear direction for the
 L.E. Schultz / Qualities of an exceptional leader
Fig. 3. Kano’s house of Total Quality. (Reprinted by permission of Noriaki Kano from his paper, “The Right Way to Quality”, delivered to the
1993 World Quality Congress.)
organization, know the next step is to take focused ac-
tion to improve performance. The required action is
nicely portrayed in a graphic by Noriaki Kano.
Quality is like a house, suggests Kano. It must be
built well and maintained or it will crumble [13].
The ground beneath the house represents the general
education and mores of society. Upon that rests the or-
ganizational foundation of intrinsic technology, then a
ground floor of motivational approaches. Three pillars,
concepts, techniques, and vehicles, hold up the roof of
the organization, that is, its direction or strategies, and
its purpose, which is customer satisfaction.
3.1. Intrinsic technology
Intrinsic technology is the business’s driving tech-
nology. It depends on having people educated in the
specialty of type of business and serves as the foun-
dation for that business. Seed and use worker’s expe-
rience in continuing maintenance and redesigning of
systems. The person doing a job knows more about it
than anyone else and is therefore the one best person
to improve it [5].
A process is actually a collection of cause-and-
effect factors and must be controlled to obtain better
products. Performance improvement education must
be given to all employees from the president to assem-
bly line workers [9].
3.2. Motivational approach
Once the intrinsic technology is in place, there still
must be a motivation for quality. Kano said quality or
99
performance is a “hot and sweaty job”. The problem is
how to impel managers and employees to take such up
such hard work. Success depends on this sweat.
According to Kano, there are two approaches that
make people undertake this difficult work, crisis con-
sciousness and leadership. Leadership is preferable.
Juran said the recipe for leadership action should be
90% substance and 10% exhortation. The formula for
results, according to Juran, is:
– Establish specific goals to be reached;
– Establish plans for reaching the goals;
– Assign clear responsibility for meeting the goal;
– Base the rewards on results achieved [3];
– It is the art of doing the obvious and doing it
right [10];
– It is work smarter, not harder [5];
– The goal of total quality control is defect-free pro-
cesses, not just quality end products [9].
Two factors cause defects:
– Lack of knowledge;
– Lack of attention [7].
Crosby maintains that the former can be measured
by tests and improved through training and education.
The lack of attention is overcome by people who com-
mit themselves to watch each detail and carefully avoid
errors.
Organizations may share common educational lev-
els, levels of intrinsic technology, and even concepts,
techniques, and vehicles but still be very different in
levels of success. The difference, according to Kano, is
the differing strengths of motivation for performance
100 L.E. Schultz / Qualities of an exceptional leader
improvement or willingness to work and variations in
strategy. Attention must be paid to both before con-
cepts, techniques, and vehicles work to their maximum
potential.
3.3. Concepts
With a good foundation of general education, intrin-
sic technology, and properly motivated workforce, we
can proceed to provide concepts, techniques, and ve-
hicles to launch our organizational improvement activ-
ity.
Once management has a strategy and the willingness
to work, it must choose or develop the concepts to hold
up part of its house. Concepts show how to proceed
from the organization’s particular view of its industry,
society, or other situation. Concepts consist of a qual-
ity theory or philosophy and a theory of management.
A theory of management might be summed up by such
statements as building quality into processes, manag-
ing by facts, quality is customer satisfaction, the next
processes are our customers, respect for humanity, and
simply plan-do-check-act.
To manage the process, rather than be managed by
it, a never-ending quality cycle can be identified – plan,
do, check, act. The concept of plan-do-check-act was
initiated by Shewhart, carried forward by Deming [he
later changed it to plan-do-study-act because of the in-
spection connotation of check], and embraced by the
Japanese Masters is most significant. It is the under-
lying principle of techniques to link the quality tools
together like the Quality Control Story [QC Story],
Seven-Step Method, and Quality Journal.
Shewhart said, “Quality comes from the Latin word
“qualis” meaning “how constituted” [1]. We need to
understand the process that produces the product or
service.
“One of Walter Shewhart’s major contributions to
the control of quality was the realization that human
wants and preferences were an indispensable part of
what need to be specified”, said John Karlin of Bell
Labs.
Speaking of the daunting nature of Shewhart’s pa-
pers, Deming said, “Although his explanations could
be simple and clear in a face-to-face discussion, his
greatest papers remain as difficult for the reader as they
were for him to write. As he told me once, when he
writes, he must make it foolproof. I replied in a partic-
ular instance that he made it so foolproof that no one
would understand it”. Said US Army General Leslie E.
Simon, that he once congratulated Shewhart on a mag-
azine article, adding, “But Walter, it took me four hours
to read it thoroughly”. “Cheer up”, replied Shewhart,
“it took me four years to write it”.
Total quality control is an effective system for in-
tegrating quality development, maintenance, and im-
provement efforts to achieve full customer satisfac-
tion [6]. A concept is required to tie our thoughts and
approach together.
There are four kinds of value
– Use,
– Cost,
– Esteem,
– Exchange [1].
All must be addressed with our concept.
3.4. Techniques
Management must choose how it carries out its
concepts; that is, it must choose the tools for doing
so. These may be such quality control tools as his-
tograms, control charts, run charts, scatter plots, or
other data-gathering and analytical tools to visualize
variation.
Quality control means the use of statistical methods
from raw material to customer and back again [1]. The
first step is to draw a flow chart or diagram of the orga-
nization viewed as a system. “Until you draw a flow di-
agram, you do not understand your business.” The flow
chart may be viewed as the organization chart, showing
people what their jobs are and how they should interact
with each other [2].
Statistics can be viewed as a language that allows
the work to talk to us. The most important measure-
ment tool is the process chart, a device for visualizing
a process as a means of improving it [5]. Use control
charts to predict behavior [1].
Build in good quality, as opposed to inspect it out.
Inspection after the fact is too late. The defect resulting
in scrap or rework has already been made.
Use statistical methods to study, discover, and mea-
sure effects of unknown causes on a system. Modify
the systems to reduce variation [1]. Variation exists in
everything:
– Systems,
– Services,
– People,
– Nature [2].
 L.E. Schultz / Qualities of an exceptional leader 101

When implementing quality control, we need to – Selecting a job to improve,

manage the five “M”s: – Getting the facts and making a chart,
– Challenging every detail,
– Men,
– Machines, – Developing a better method,
– Materials, – Installing the improvement [5].
– Methods, Join or form committees and societies for the study
– Measurements [9]. of engineering, statistics, standardization, and manu-
Measurement must be insisted upon from the very facturing processes [1].
beginning [5]. Juran provides a formula for quality
measurement: 3.6. Strategy
Quality = Frequency of Deficiencies divided by Op-
portunity for Deficiencies [3]. The results of the use of the concepts, techniques,
This measurement has been noted and expanded and vehicles should help us achieve our organizational
upon by the six sigma practitioners with “defects per strategy.
million opportunities” measurement. Some companies that are just beginning to focus on
process improvement do so without a strategy. No mat-
3.5. Vehicles ter how well their intentions, they are not likely to suc-
ceed without a plan to execute a strategy and a plan to
Vehicles are highly important, because they convey measure progress.
management’s choices of concepts, techniques, and Identify the vital few projects using pareto analy-
motivation to the general work force. Some examples sis [3]. An organization dilutes its efforts if it tries to
of vehicles are: address too many projects at one time. It is best to fo-
– Management by policy, cus on a few critical projects at a time and do them well
– Quality circles, and in a timely fashion. Then it can move to the next
– Work simplification, critical few.
– Daily management, Deming demonstrated in the 1940 census that sta-
– Cross-functional management, tistical controls and tools could be used accurately
– Total quality management, in clerical as well as industrial applications [2]. For
– Work-out teams, the first time these statistical tools were used to ana-
– Re-engineering, lyze the data from the census and increase the amount
– National quality award, e.g., Baldrige Award, of usable information. This pointed out the tremen-
Deming Prize, dous opportunity to use the tools in service applica-
– Six sigma. tions.
Plan, design, and control the four aspects of quality: Quality is not just for manufacturing processes. It
works equally well for service or administrative pro-
– Quality – Characteristics in their narrow sense- cesses. It is common to find that 35% of effort and cost
performance, reliability, appearance, strength, pu- in manufacturing go to make waste and rework. How-
rity, etc. Quality is a predictable degree of unifor- ever, in administrative processes experience has shown
mity and dependability at low cost and suited to that up to 90% of effort can go to waste and rework.
the market. Manufacturing or industrial engineers have worked on
– Cost – Characteristics related to cost, price, profit manufacturing processes for many years but seldom
control, yield, losses, etc. have they focused any efforts in the administrative or
– Delivery – Characteristics related to quantity, lead service areas. It is in these areas that real improvement
times, inventory. opportunities exist.
– Service – Characteristics requiring follow-up, Fix the system first, then bring on the new equip-
safety, liability, compensation, warranty, repair, ment [5]. It is fallacy to automate a bad process. The
spare parts, maintenance [9]. waste and rework may be generated more quickly but if
Mogensen defined work simplification as the orga- the process is not capable of producing the desired re-
nizing of common sense to find better ways of doing sults, then additional expenditures for equipment will
work. Work simplification is a five-step process: not change it.
102 L.E. Schultz / Qualities of an exceptional leader
Just meeting customer specifications is not suffi-
cient. Satisfied customers are not enough. Satisfied
customers will shift. What you want are delighted cus-
tomers that brag about you and are loyal to you [2].
Taguchi teaches that we should design our processes
to produce products that can be misused and still func-
tion as intended. Robust products gain steadfast cus-
tomer loyalty. They perform under less than ideal con-
ditions [12]. Quality is a virtue of design [12]. The
more manufacturing deviates from specific targets, the
greater its losses. Loss increases by the square of the
deviation from the target value [12].
Kano warns that there are common errors that often
defeat quality efforts:
– Chasing too many rabbits [not focusing narrowly
on the vital few projects].
– Inadequate data analysis; a preference for pursu-
ing dreams.
– Insufficient cross-function coordination [13].
We can never feel that we are good enough. Cus-
tomer’s expectations are what we and our competitors
lead them to believe they should receive [2]. Our com-
petitors are continuing to improve and so must we.
Quality improvement is seen as an ongoing everlast-
ing process [7]. An American baseball player, Satchel
Paige once said, “Never look back, someone might be
gaining on you”.
3.7. Customer and employee satisfaction
The last component of Action is Customer Satis-
faction. The peak or roof of Kano’s House of Qual-
ity is, of course, customer and employee satisfaction.
Without customers and employees, we have no busi-
ness.
Quality is what the customer believes it is [1]. It is
not our view but the customer’s view that is important.
The consumer is the most important part of the produc-
tion line [2].
If a company can’t meet the basic needs of its em-
ployees, it does not deserve to exist [9].
Classify customers as to the vital few and useful
many [3]. If we collect data on the importance and
profitability of our customers, then the Pareto princi-
ple is again useful. If we focus on the 20% of our cus-
tomers that bring in 80% of our profit, then it is appar-
ent where we should focus our effort.
The ultimate measure of your success is customer
satisfaction [4].
4. Conclusion
The Masters have provided us with a very clear mes-
sage of what action to take to achieve the qualities of
an exceptional leader. The elements and their key com-
ponents are:
– Leadership – roles and responsibilities, apprecia-
tion for a system, knowledge of variation, theory
of knowledge, and psychology;
– Direction – aim, planning, implementation, and
review;
– Action – general education, intrinsic technology,
motivational approach, concepts, techniques, ve-
hicles, strategies, and customer satisfaction.
What we do with this information determines how
successful we are with our performance improvement.
One of the first portable computers, the Osborne Ex-
ecutive, had a sage bit of advice in its manual, “When
in doubt, do something”. Try some of these concepts
out a little at a time [PDCA]. Said Lorne Ames, pres-
ident of INCO Manitoba, “What is important is baby
steps”. Gather data on your progress, learn from your
mistakes, and move on a faster pace each time around
the PDCA cycle.
Dr Deming said, “It does not matter when you start,
as long as you start now”.
And now I close with another Deming quote, “I leave
you with five words. I have done my best”.
References
[1] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, W.A. Shewhart, pp. 3–11.
[2] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, W.E. Deming, pp. 13–48.
[3] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, J.M. Juran, pp. 49–68.
[4] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, H. Sarasohn, pp. 69–78.
[5] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, A. Mogensen, pp. 79–84.
[6] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, A. Feigenbaum, pp. 85–
90.
[7] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, P.B. Crosby, pp. 91–106.
[8] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, M. Tribus, pp. 107–114.
[9] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, K. Ishikawa, pp. 117–128.
 L.E. Schultz / Qualities of an exceptional leader 103

[10] L.E. Schultz, Profiles in Quality, Learning from the Masters, [12] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, S. Mizuno, pp. 129–138. Quality Resources, New York, 1994, G. Taguchi, pp. 147–154.
[11] L.E. Schultz, Profiles in Quality, Learning from the Masters, [13] L.E. Schultz, Profiles in Quality, Learning from the Masters,
Quality Resources, New York, 1994, Y. Akao, pp. 139–146. Quality Resources, New York, 1994, N. Kano, pp. 155–166.