The Nuts and Bolts of Reformation
(Excerpt from Quality & Me: Lessons From An Evolving Life)

Around February 1969 1 became ill; my stomach and insides began acting up for no good reason, and I was often in a great deal of pain. One night I passed out at home, waking to see paramedics peering down at me. The doctors found nothing wrong, and so I kept puttering along putting the new quality department together. I brought three professionals in from ITT units: Jack Hagan, who had worked with me at Martin and had been at our New Jersey unit; Ernie Karlin, who was at West Palm Beach Semiconductors; and Milt Cohen, who became involved in the service operations. Along with Bob Vincent they made up the professional team, and then I was able to obtain Karen Kruger as administrator. Karen made the arrangements for the quality college, conducted corporate quality-awareness activities like the newsletter, and, in her spare time, ran the rest of us.

Now that we had the twenty-seven quality councils working worldwide, I felt the need for us to recognize those employees at all levels, in all departments, who were good examples of quality performance. Most programs of this sort are not successful because the winners are chosen by managers, who always select the wrong people because they judge people by appearance, not by contribution. They have no way to know about contribution. That is why most executive secretaries are attractive.

We had a multinational organization with several hundred thousand people working on all kinds of different products and services from hotel rooms to telephones. There were cultural quarrels, project jealousies, organizational overlaps, and all the other bits and pieces of business relationships. Also there was no corporate award program of any kind and no interest in having one that I could tell.

The key to proper recognition is to have people nominated by those who really know what is going on, their peers. This is the basis for the Oscars, Tonys, Nobel Prizes, Pulitzer Prizes, and other well-respected recognitions. Then, the winners need to be able to show off the award without a great deal of effort. If you have an Oscar on the mantle, all your guests will notice it before the evening is through. A plaque or certificate is not going to meet that test. I finally decided on a ring, the Ring of Quality. When devising something original, I find it of little use to bring it up with the staff. They just water it down or find rea-sons that it is going to fail. Committees worry that the wrong person will be selected, and they want to have the criteria written down, prob-ably at least three pages of them. I wanted the only criterion to be that someone else thought the person was doing a wonderful job when it came to quality. We would do a check through the quality councils to make sure the person was authentic and a reasonable candidate. Then the executive quality council would make the recommendations to me based on those inputs.

Learning: a committee will never create a respected award; it has to be conceived by one individual who understands the purpose.

We designed the ring of 10K gold and also had a "Q" pin for the lapel made of silver. One-page nomination forms were laid out, with the only rule stated clearly on it: you cannot nominate your boss or the corporate vice president of quality. Everyone else was eligible. The nomination forms were sent out around the world, and before long they were returned. We selected about twenty-five ring winners worldwide; the others nominated were given the silver lapel pin and a certificate at a luncheon with their general manager. Some of those sessions turned out to be quite elaborate; units were proud that one of their people had been noticed.

The first Ring of Quality dinner was planned in infinite detail by Karen and myself. For most of the participants this was the most important event of their lives. They came mostly from small towns (one had never been in an elevator) and were impressed by all the attention. I excluded negative things I had learned from the Martin award dinner and included many nice touches. We even rehearsed the ITT executives so they would not be blasé. We in the corporate office lived a special kind of life, travelling most of the time, living well, and expecting people to pay attention when we said something. That lifestyle did not compute in the regular world.

The winners and their spouses were sent to the meeting by their unit, and many ITT executives attended. President Dunleavy handed out rings for the men and medallions with chains for the ladies as I introduced them and read about their achievements. It was a moving experience. Tim even picked up the bill for the dinners, one in Europe and one in the United States each year. We gave out about twenty-five rings or medallions a year, of which five were to executives selected by the councils for obeying us wonderfully. Everyone took the program seriously; we never had a complaint about a winner being unworthy; and it is still being done in the company to this day. At least it was being done until ITT split itself into three parts and then merged some of those parts with others.

Learning: a non-competitive award program is taken to heart right away.

The kids went to horse camp in the Catskills for six weeks during the summer of 1969. They were assigned a personal horse to care for and ride, and Skip was a junior counsellor. My insides were still giving me trouble, and Dr. John Lauer, the ITT physician, suggested that I go to the Greenbrier Clinic to get checked out. This was a perk for officers anyway, but I had been putting it off. I called the kid's camp to let them know where we would be and found out that Skip had broken his leg the day before (chasing a co-counsellor down the stairs). So I drove up to the mountains to get him and passed him and passed him through the family orthopaedic group, where they took off his cast and started over. We were good customers of that group. Then the three of us flew to White Sulphur Springs, West Virginia, on a company plane. They had several, of different sizes. This was a small one, but it got there. Personnel was still irritated because I had become an officer, but I figured that was their problem. The little plane was supposed to show me that they were in charge of such things.

Learning: I am very good at forgiving, but fail forgetting.

There is no other place like the Greenbrier, and it was great to be back in my home state, which was still poor but beautiful. At the clinic Dr. Morehouse examined me from one end to the other, literally. While he had a long instrument inserted, he asked whether "this" was what I had been feeling. The symptoms were duplicated exactly except that I didn't pass clear out. The next day, after all the tests were in, he explained that I had an inflamed colon, which was caused by "taking yourself too seriously." He said that their experience with corporate people was that when they got a big promotion, they became so intense that this one spot, where the colon took its last bend, became inflamed. He also said I needed to lose twenty pounds and quit smoking. My insides never hurt again, and anytime I felt a little shaky I just remembered that visit. Dr. Morehouse said he was going to "get me ready to be fifty," and he taught me a lot.

Learning: thinking about being fifty at age forty-two alerts one to become interested in personal wellness.

In the spring of 1969 1 received an invitation to the ITT world meeting that would be held at the Boca Raton Club in Florida. This was the third of these affairs, as I understood it. Everyone who was anyone in the corporation, four hundred people plus spouses, was invited to Florida for the ten-day conference. The Boca Raton Club was taken over completely. The New York contingent travelled on two chartered trains, and others flew in from all over the world. There were serious meetings with well-known speakers, from Gerry Ford (then a Congressman) to Art Buchwald. Every night was Saturday night with carnivals, symphony orchestras, name singers (like Tony Bennett), and a casino night. People had big badges hanging around their necks with their first names in big letters and their last names and companies in smaller letters.

It was a marvellous opportunity for me to meet people and develop relationships that lasted for my time with ITT and afterward. Whatever the event cost, the company got it back right away in people working together. The biggest problem Shirley and I had was digging up a suitable wardrobe; we just did not have the money. In fact I tried to get out of going when I realized the expense we were going to face. However, Rich let me know that my incentive compensation bonus would have something extra in it for just that reason. As it turned out the bonus was equal to half my annual income. We were even able to pay the baby-sitter and go off relaxed.

Learning: if you want to get the attention of senior executives, do something original.

HSG asked me to have lunch and play golf with him. When I came to the meeting place, he already had a game arranged with three other fellows. We were going to be there for several days, so I asked whether we could pick another time (especially since it was raining), but he insisted that I stay with him. After sandwiches and conversation, I was growing nervous about missing our tee time, but eventually we all went out in the rain to the first tee. He pulled out a club, placed a ball on a tee, and at that moment the rain stopped, the sun came bursting through the clouds, and birds began singing. The five of us played together, getting acquainted in the process; when we reached the ninth green, HSG left us to make some calls. We were halfway down the tenth fairway when the heavens opened and chased us all inside, soaking wet. That is the way it always was with Hal.

Let me go back to my first GMM in January 1969. Rich advised me to keep my mouth shut for a year or two until I learned the ropes. I sat next to Ed Schaffer, who was director of manufacturing on a temporary basis but got the real job and became a vice president a year later. Ed did the inventory presentation and was an old hand at these wars. The GMM was notorious in business circles because of the stories about people being destroyed by questioning, particularly from Geneen. He had a b.s. detector with a long antenna built in and was hard to fool. When people did not do what they had said they would do, there was hell to pay. Strong men became pale as their turn in the barrel approached.

The meeting was supposed to begin at 10 a.m., and participants began arriving well before that time. About a third of them were from headquarters, so they had offices they could sit in until they had to appear upstairs. The rest were stuck hanging out in the lounge, which had a dozen telephones and the opportunity for endless conversation. This was a great place to get things done; everyone who could do anything was there. HSG came when he was ready but usually made it before eleven on that first day. He lived in a different time zone than everyone else.

When he went to his seat, the rest of us made our way to the tables, which were shaped like opening and closing parentheses, with a green cloth covering, and sat in the eighty comfortable blue steel chairs, forty on a side. I sat on the staff side six or seven people down from the three people from the office of the chairman. The group executives and product-line managers were on the other side. Everyone knew each other so there was an easy air about the place until the numbers began. Everyone lugged their two big GMM books plus the notes for their own information. I brought nothing except a note pad. No one ever looked inside those books during the meeting anyway.

Learning: meetings held on a regular basis with the same attendees create their own standards of behaviour, which it is wise to understand.

The meeting began with the comptroller's numbers. Each of us became expert at counting the number of view graphs the three assistants lugged to the tables inside the circle. There were three large screens in the room; the view graphs were set on the tables, and the presentation proceeded through the whole corporation. Revenues, profits, accounts receivable, compensation, inventory, and every other number for the corporation as a whole were displayed. Then we reviewed the numbers for each group and the units within the group. Questions flew back and forth, with the Office of the Chairman or staff people probing and the operations people defending.

About two hours into my first GMM someone brought up a profit exposure caused by a "quality problem." All seventy-nine heads turned toward me. I responded by saying that they should not look at me; I was not responsible for quality. I noted that this particular problem had been caused by a design error that had not been corrected as promised. I also pointed out that the information they were discussing was from my report and stated again that I did not think we could afford to categorize everything that went wrong as a "quality problem" and put it on a list to be handled by someone someday. We had to get serious about corrective action and prevention.

After a silence, the subject was picked up in this new vein. The engineering director agreed that it was his problem and took the assignment, and he gave a date for correction. The next time someone said "quality problem" everyone laughed out loud, and I never heard that expression again for the rest of my days there.

Learning: speak up firmly and respectfully, but do it about significant topics.

After all the staff reports, the grilling of the group executives began. The president of ITT Europe (ITTE, which we all said stood for "I Travel, Talk, and Eat") went first. Product-line managers, who worked with one type of item, like switchboards or pumps or insurance, hopped into the conversation now and then. Staff people brought up concerns about their specialty. I made it a solid rule never to raise an issue but to participate when a discussion was going the wrong way.

One had to be careful with HSG. Once he asked me three questions in a row. I answered the first two and then told him we had reached the limit of my factual knowledge and that further replies represented personal opinion. He smiled, and we discussed the subject with those rules. Those who did not separate opinion from fact were always found out. People would get so full of themselves and the encouraging response they were getting to their factual comments that they would keep right on going and fall into a pit. Hal was an information junkie, and he remembered everything. If you told him a number, he might ask you about it a year later.

Most people hated the GMM; it was boring a lot of times but was exciting in bursts—sort of like flying a plane, I imagine. People kept slipping out to make calls or to smoke or just to rest. The trick was knowing when this was safe, when the discussion would not affect you. Unfortunately my stuff could come up anywhere, particularly because we reported cost figures for non-conformance to requirements.

After a few of these events I realized that none of these people had the opportunity to get involved in operations beyond their own. The defence people never went near industrial products; the hotel executives had never been in a plant; the financial officers never went anywhere except corporate meetings. Quality went on in all units, so I found that my exposure to the whole corporation was unique; after a while I had been almost everywhere. Also through the quality-council meetings and the network it created, I knew what would be reported in the GMM. So I became the one to ask about problems and situations. Several times I was assigned to mediate a dispute between two or more units. They accepted my decision without comment. As Geneen said, "We'll let Phil settle it; he is the only one who doesn't care if we make any money."

Learning: establish a position on a perch above the fray in order to stay out of the political world.

The GMM was held monthly on the first two and sometimes three days of the first week. The following week all the headquarters people went to Brussels for the meetings there. The quality executive there, who reported to me for functional direction, was part of the manufacturing staff, and I could not get the organization changed to conform to company policy. The ITTE president, Jim Lester, didn't think that quality needed to report at the top. As a result at the meetings there was no real place at the table (which was much smaller than in New York) for me or the ITTE quality director. So I kept appearing at the first meeting for an hour or two and then heading out into Europe to hold council meetings, visit units, and work on real business. Nothing ever happened to affect the quality operation for good or ill in the Brussels meetings.

It took a couple of years for the German units to back away from the thought that their products were marvellous. They translated Cutting the Cost of Quality after sending a man over to the States for a few months to learn the real language. Among other things, he came to realize that "prevention" did not mean "condom." I developed a relationship with the managing director of SEL, the biggest ITT company in Germany. He finally decided that I was sincere and agreed to try a quality-improvement process in a couple of plants. SEL had about twenty-five operations making all aspects of telephone systems and electronics.

The company approached quality methodically, doing exactly what I had written in the company procedure booklet. In fact the staff corrected me a couple of times when I made suggestions that were not in the booklet. The results were swift and dramatic, with big reductions in rework and warranty costs. The customer was pleased and wanted to do some of the quality process in its operations. We were able to set up a quality-engineering training course to improve the manufacturing processes. Many of these changes were made possible by the careful leadership of Dr. Behne, who knew the level of resistance to change in the organization.

He set me up to speak to the management board one evening. After a long and large dinner I was asked to explain quality to the board members, who looked as though they were going to send me back to New York. I told them about my background, which was half German and half Irish. "Each morning," I said, "my German side says, 'You will get up and go to work and not come home until everything is done perfectly.' My Irish side replies, 'I'll drink to that."' There was a forever pause while the translator went through the story, and then they laughed and accepted me. We had a good and honest question session. I never told them what no one knows, which is that the Irish have the lowest per capita drinking rate in Europe. Nobody believes that because of the reputation the Irish have developed over the years. People also believe there are alligators in the sewers of New York City.

Learning: business schools should have a course in patience.

The Germans taught me not to try to change a culture that has been around for hundreds of years. For them to become interested in quality improvement, they had to learn that I was not self-serving, and then they had to see the opportunity for themselves. Also, the process of improvement could not be seen as a criticism of what they had been doing in the past. We phrased it as a "rededication to the principles of quality for which we are so well known." As soon as they had a few operations going and were recording successes, I enticed three of the principals to come to the United States and do a road show for the companies there. The Americans ate it up and began doing what we had been trying to get them to do all along.

The year 1972 was quite interesting for a few reasons. First, my publisher had gone out of business the previous year, and I had taken The Strategy of Situation Management to McGraw-Hill after a reference from Tom Flynn of the public-relations department. His wife worked at the publisher and got someone to read the book. They liked the first line ("You may have noticed that the world was not designed specifically for you"), and as a result I rewrote the book and changed the title to The Art of Getting Your Own Sweet Way. My grandmother used to say, "You can't always have your own sweet way."

The book came out early in 1972 and received a couple of good reviews, which enticed McGraw-Hill to arrange a media tour. We matched schedules so they could set up radio and TV shows in the cities I was visiting. The talk shows liked the subject, and I enjoyed handling problems that the listeners brought up. The process described in the book works. We did noon news, late-night chatting, morning book reviews, and it was a great learning experience. I found that my answers were the most sparkling when I had no idea of the question beforehand.

At the same time, the Sheraton people were finishing construction on their new hotel in San Diego. That city was bidding to host the Republican National Convention in the summer, and the hotel was pushing hard to open in time. To properly open a new hotel by bringing in media and travel people costs around a million dollars. Sheraton management was trying to figure how to get that much money out of ITT when they were approached by the city's convention committee. If Sheraton would make a contribution to the program and if San Diego got the convention, the hotel would be convention headquarters, and the president would stay there. The result would be national—in fact, worldwide—television and other media exposure. As a result Sheraton donated $50,000 to the committee.

One of the ITT public-relations people, who was known to drink a little too much, in fact a lot too much, told a Washington columnist that the money was given as a bribe. The story hit the front pages as a fact. Everyone came down on the company, and the stock began to fall, dropping two-thirds before it was all over. So I was out in this media storm talking about getting your own sweet way and being hit with questions about the company's ethics.

As if this were not enough, ITT was accused of trying to overthrow the government of Chile. That charge was disproved, but the message never got out. Those who have worked for international companies know that they have almost zero influence anywhere. It is only in books and movies that you can bend a nation to your will.

To add one more log to the fire, my publisher got involved with Clifford Irving's pretend biography of Howard Hughes. My book tour became the hottest thing going. I was the only one who could talk about all these situations at the same time. The ITT corporate public-relations people encouraged me because the interviewers seemed not to relate my being employed by the company to the acts that had supposedly taken place. My stock line was "We are a big company, and we do a lot of dumb things, but these dumb things we did not do."

Learning: don't get in a position where the company feels it owns you; it's better they feel happy that you are willing to work with them, so stay a little aloof.

My initial stock option when I became a vice president was $62 a share; each year around Christmas I received another one ranging from $55 back up to $62. After all the dust had finished flying on this exposure, the stock was about $20. The company had just completed fifty quarters of profit improvement in a row, had little debt, fifteen billion dollars in assets, and a good future. However, everyone thought we were a bunch of thieves. My children were even snarled at in school.

Investigation showed, finally, that we were not trying to bribe the Republicans and that Geneen was not pulling the strings at the White House. When Richard Nixon's tapes came out, one of the comments that the president made was "Geneen? Hell, he wasn't even a contributor." The remark was engraved on a brass plate and presented to HSG, who had hardly noticed the commotion anyway.

I realized that the company had brought the San Diego scandal on itself by being insensitive. Management has to watch itself when it gets people pumped up about the company. The folks involved were so busy taking care of ITT they never thought about how their decisions were going to look. It would have been much better to have joined a committee and stayed away from appearing to become part of the political process. During a visit to the Washington office the previous year I had noticed signs of this sort of arrogance and had mentioned it to one of the senior executives, who suggested that it was none of either of our businesses. He was wrong because he assumed that our people were following directions. But they were just doing what they wanted to do, and that is worse than having a deliberate plan of deception coming from top management. I learned again that companies make their own image and have to be serious about how they present themselves and how they are perceived.

Learning: if people are going to represent you, make certain you share the same philosophy.

One of the problems of international travel is alcohol. The Euro-peans drink wine at most meals, and it doesn't take long to dive right into that habit. Each wine has a story, and there are hundreds of tastes involved. My colleagues on the executive council were well versed in wine lore and took pains to coach me. They tasted and sipped a lot; I just drank it. I was uncomfortable with the effect alcohol had on me and did not drink beer or whiskey, but I drank a lot of wine. It was not possible to write anything useful after even one glass, so I was not putting out much material. Time changes bothered me too. When I went to Europe, it took me a couple of days to begin functioning again. Consequently, I went over early and spent a day wandering around whatever city I happened to be in. In this way I saw a lot of historical sites and spent time with my colleagues.

In late 1972 1 picked up a throat infection and was put on antibiotics. The doctor said not to drink any alcohol as long as I was taking pills. My schedule was to go to Copenhagen for an executive council meeting and the annual Ring of Quality dinner. Flying over from New York I refused all the wine and cordials that were offered, confining myself to Perrier water. These flights usually get in at the crack of dawn, and my custom was to check into the hotel and try without success to get some sleep. This time, however, I dropped right off for a few hours, went out to a nice lunch, and spent the afternoon sightseeing. It was a warm day in Copenhagen, and the secretaries and store clerks were sitting in the park, taking off their blouses and bras in order to grab some sun, a practice that bothers only Americans. That night, after dinner, I slipped into bed and slept without waking until morning, which was a revelation. Alcohol causes time-change problems. If you do not drink it, and you get plenty of daylight when you arrive, there is little effect. I resolved to drink no more and shared that resolve with Shirley on the telephone. She was more relieved than she let on; apparently I was becoming somewhat of a problem in this regard.

Several months before I had been approached by one of the administrative guys in Brussels who bought and sold wine by the case as a sideline. He said that my favourite Graves wine, Oliver, was available in both white and red and asked whether I would like to order some. I told him about the Copenhagen meeting and asked whether we could get a few cases of each sent to the hotel for the Ring of Quality dinner. It was all done, and the wine bad arrived. The night of the dinner the steward approached me to taste the wine before they began service. I asked Georges Borel, my Frenchman, to do the honours, and he was suitably impressed. He declared this Graves to be the best he had ever tasted. I realized that I had passed up the best wine anyone had ever had offered to them. But it would not do to fall off my perch. Once my mind is truly made up, the doing is not difficult.

Learning: there are, or will be, things that need to be removed from our lives; getting rid of them is a matter of intellectual decision and then a firm will.

My travel schedule at this time was heavy in terms of places to go, but the amount of time I spent away from home was not significant. I never missed a weekend at home except for the ITTE planning meeting at the end of September. Those two weeks were made bearable only by the opportunity to play some golf. On other trips I kept time away to the minimum.

The company sent cars to pick us up at home for travel to the airport and to return us from the airport. And there were also company planes. These were a mixed blessing. We had a 727, set up to carry about twenty-two people, which the chairman used primarily to get to Europe and back. I much preferred to go commercial, as did most of the other people. On the 727 there were only other ITT executives, no movie, and a dull meal. A poker game was always going, but poker interests me only once in a while and never for long. I also don't care about gin rummy, so I spent most of my time reading and avoiding getting into a discussion with Hal. He sat in his little office room with his seven briefcases, wearing an old sweater and working on papers. I did wander in there once and spent the next hour listening to suggestions, some of them good, about things I could do. Later I discovered that he considered these chats to be agreements, and as a result I had a difficult time getting off his to-do list. Most of the other people had a briefcase full of papers to process, but my case contained only books. The great fear of my life was to be trapped on an international trip without something interesting to read. Because I never knew how good a book was going to be, I always brought several. Few bookstores in Europe carry books I want to read. As I noted before, I read only history and biographies.

When it came time for a trip to Brussels, the director of administration in New York started calling those who were going in order to entice them on the plane. He was in a position to dispense or withhold many favours, so we usually wound up doing what he wanted. However, we were able get the meal service changed to an Italian deli menu and a few hot things. If it sounds ungrateful to be complaining about flying a private plane across the Atlantic, accompanied by a dozen good friends, then we should accept that one can get used to anything. It is sort of an "isn't this suite kind of small" mentality. But golden chains are just as binding as those made of steel.

ITT had purchased a company in Massachusetts that made special cables and wire back in 1964. The owner had been unable to get into the local country club for one reason or another, so he decided to create his own golf course in Bolton, Massachusetts. It was the longest in the world, over eight thousand yards from the "tiger tees." There were three other tees, but a good drive for me from the tigers placed the ball right next to the ladies' tee. No one was ever able to stroke a putt across one green, which was an acre in size. The company didn't know about this course until after it had made the purchase. It decided to turn the facility into a place for conferences and thought it perhaps could rent it out one day. Customer groups were taken there regularly by the unit executives, who were often kind enough to invite me to participate. They knew I would come if an event were held at Bolton. We used it many times for quality meetings and as a place to get away. After lodges were built, families were welcome. Bolton is the only part of the company I miss today.

Having realized how successful a place to entertain customers could be, ITT made additional arrangements with a bird-shooting reservation in Georgia, a trout-fishing camp on the Canadian border, and a houseboat anchored in the Florida Keys. I went to these a few times, but my heart was always back in my library. If one must have a master, then ITT was the best. The question that was beginning to form in my mind, however, was, Does one have to have a master?

© 2000 Philip Crosby Associates II, Inc.

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