Defining Quality: Is It More Than Just Meeting Metrics?

Management

Defining Quality: Is It More Than Just Meeting Metrics?

Core company values can and should be considered

Published: Monday, July 24, 2023 – 12:03

Business owners and employees alike have long debated over how best to achieve quality standards and what those standards ought to be. However, as much as linear thinking may help when measuring degrees of improvement, increases in profit, or low turnover rates, it can’t tell you that your company may need slightly different quality requirements than another—or why. That can only come from individualized, often-surveyed human analysis. And in an age where self-appointed doomsday prophets assert that AI will soon take over people’s livelihoods, the need for actual human analysis is a good thing!

As workplaces shift to offer more perks in the form of “company culture,” it can be easy to dismiss words like “values” and “mission statement” as irrelevant to a generation that touts company lunches, casual Fridays, and vending machines for the intended audience. But that’s not the case. In fact, company values like integrity, providing quality services or a quality product, and making sure a job gets done are all intrinsically tied to quality. 

Many of the most successful companies still thrive mostly due to the intense beliefs—and a strict adherence to them—of their founders or CEOs. Here, we’ll look at examples from five successful companies to see how their corporate values tie into every aspect of their business’ quality and standards: Trader Joe’s, Costco, Google, Nike, and Ben & Jerry’s.

Five companies that follow their values to success

1. Trader Joe’s

Trader Joe’s is the definitive example of “the little grocery store that could.” In a market saturated with Safeways, Albertsons, and QFCs, it took some creative genius—and a lot of grit—to make a not-quite-health-food store and more-than-just-a-grocery store the success that is your local TJ’s.

A lot of it comes down to seven top values imparted to employees in introductory training. Yours truly did, in fact, work for the Trader Joe’s in Burien, a suburb of Seattle, back in the early 2000s, and yes, I went through the videos and quiz to become a crew member, so some of this is anecdotal. (Bear in mind that Quality Digest may not share the same views as this writer.)

1. Integrity: TJ’s tries to be honest, take its sustainability factor into consideration (e.g., when customers asked for less packaging on their produce, TJ’s delivered), and maintain affordable prices for customers who don’t exactly make the top people rich but keep the company profitable.

2. Product-driven company: It’s all about the product. If something isn’t selling well, it’s out. If a product is found not to be good, it’s gone. There’s a strict regulation process on what continues to make it to the shelves as a regular item.

3. Wow customer service: The interview process at TJ’s doesn’t feel like a normal retail or grocery store interview. It’s a conversation. Are you someone who makes people feel welcome when they walk through the door? Can you engage in a conversation about the qualities of one granola mix vs. another without rolling your eyes like a jerk? Can you wholeheartedly give hints to a child about where to find the Trader Joe’s stuffed animal? Do you enjoy ringing bells? (No, literally, bells—while cashiering—as part of a communication system with your co-workers.) If being at the beck and call of customers—with a genuine smile—is your thing, you can work at TJ’s.

4. No bureaucracy: The trend of saying “We’re like family” is now dead and gone, thank goodness. But I would say that Trader Joe’s values the feeling of community. The full-time managers’ work duties overlap—and surpass—those of the people they manage. And there’s very little hierarchy. From top to bottom, decisions are made efficiently and with little “political” agenda. It’s all about delivering good products and service, quickly and pleasantly. Thus, bureaucracy has no place to loiter.

5. Kaizen: Continuous improvement. That’s right! In the world of quality, this word represent so much more than a value: It’s a philosophy. Progress demands that people acknowledge that there is room for improvement—and strive for it.

6. The store is the brand: Brand is important for any company, but for the quirky store that always has enough cashiers to get you through the line no matter how crowded it is, this is all the more a vital part of TJ’s success. The brand, from the Hawaiian shirts to the variety of mixed nuts and fresh flowers, is inseparable from any store at any location.

7. A national chain of neighborhood grocery stores: Think local, think friendly, think anti-corporate giants. Every Trader Joe’s store acts as part of a larger system while keeping the things that make it unique to the area. TJ’s concentrates on serving the local population, from displays to products to atmosphere.

2. Costco

Costco is the straightforward, old-fashioned uncle at the table. Since its founding by James Sinegal and Jeffrey Brotman in 1983, Costco has operated under the simple premise that success requires four simple agreements:
1. Obey the law
2. Take care of our members
3. Take care of our employees
4. Respect our venders

Though warehouse clubs aren’t unusual, Costco stands out for its commitment to stay modern when it counts (its business practices are sustainable, partially due to that “respect our venders” thing) and yet grounded enough to honor past commitments to club members.

Two noteworthy examples of this are Costco’s bakery and its hot dogs. Yes, you read that right. Costco still has its old-fashioned cake system, in which customers write their order on a slip of paper (gasp!), slip it into a box, and the cake is ready when the customer comes in to pick it up. In this day of online ordering as the norm, that system still prevails and is surprisingly efficient. And the inexpensive hot dog meals? It’s estimated to be more than $3 less than what the meal would, realistically, cost with inflation if the CEO hadn’t fought to keep the item at its standard price for Costco members. Instead, it remains yet another relic that survives merely to keep things simple, familiar, and easy for members.

In an interview with The Motley Fool, Costco CEO W. Craig Jelinek summarizes the company’s entire system—and the reason for the success—into one key concept: “The key is being the low-cost provider,” he says. “That’s going to be the key for anybody winning the battle long-term. It’s whoever can bring value and bring the best quality of merchandise to the marketplace at the best price.”

He clarifies that Costco differs from a discount store.

“We have department store-type items that we bring to the marketplace,” says Jelinek. “It’s not like it’s inexpensive or cheap merchandise. I think, over time, that has taken care of itself. The people know that we have quality merchandise at a very good price. They’re not seconds, they’re not closeouts. It’s quality merchandise that you can buy at most department stores or high-end stores at a very good price.”

3. Google

Leave it to Google to have the words “Don’t be evil” as part of its motto. While it has evolved into “You can make money without doing evil,” it remains one of 10 tenets held by the company, listed on its own site as “Ten things we know to be true.”

Listing all 10 aspects of Google’s philosophy isn’t necessary to make the point, but it’s worthwhile to visit a few notable statements.
1. Focus on the user, and all else will follow.
2. It’s best to do one thing really, really well.
3. There’s always more information out there.
4. You can be serious without a suit.

These values not only create a powerfully distinct work culture, but they also lead to increased employee engagement and innovation. By allowing for people to be serious about their work without worrying about a dress code, being selective in hiring people with the same values (roughly 0.2% of applicants) and remaining open to providing as much information—as fast as possible—to users, Google has remained the prominent search engine.

4. Nike

Founded in Beaverton, Oregon, in 1964 by Phil Knight and Bill Bowerman, Nike is one of the top athletic apparel and equipment retailers in the world. According to Business Strategy Hub, Nike’s core values are community, sustainability, diversity, and social responsibility. These, combined with the mission to “Bring inspiration and innovation to every athlete in the world,” have motivated company decisions, affected hiring practices, and launched ad campaigns since Nike’s establishment.

As of 2022, in line with Nike’s diversity goals, more than half of its employees are women, and almost 40% are ethnic minorities. Nike also has invested more than $100 million in historically black universities and Hispanic-serving institutions. Regarding its sustainability, Nike reports 64% less GHG emissions in its facilities and 97% of its waste reused or recycled rather than sent to landfills. For community and social responsibility, Nike’s 2022 reports indicate that it has spent more than $800 million acquiring diverse suppliers—including women—sent wellness surveys out to more than 500,000 employees across 15 countries, invested more than $375,000 in girls athletic programs, increased spending in inclusive coaching programs, and put $149 million toward women, girls, and Black community commitment (BCC).

Not only have Nike’s values had an effect on its actions and spending, but it appears that the public recognition and appreciation of its products remains high. Brand awareness is at 95%, and loyalty hovers at a little under half of Nike buyers, according to a June 2022 survey by Statista.   

5. Ben & Jerry’s

Founded during the late 1970s, this ice cream company was determined to make great ice cream for the sake of the product and customers—not the profit. And by focusing on quality (or deliciousness), Ben & Jerry’s not only met just about any organization’s definition of financial success but stayed true to its original mission. In fact, it came in second in leading ice cream brands in 2022, making more than $910 million in sales.

Ben & Jerry’s values are broken into three mission statements: product mission, economic mission, and social mission. To summarize, Ben & Jerry’s aims to make great ice cream, maintain and grow its product’s value in the marketplace, and improve the lives of others through its business. While it’s obvious that it stays in line with company goals of making a great product and developing its value, many of its customers don’t know much about its nonprofit work. The Ben & Jerry’s Foundation supports racial equity and inclusion efforts in the Vermont community and beyond.

Defining values, then incorporating them

Every company has a different method for discovering and distinguishing its core values. Some make lists, others make statements, others do bullet points. Some are elaborate, some are simple. But the most successful companies have this in common: They put their words into action. Whether it’s keeping their commitment to be involved in the communities they serve or providing a product that’s guaranteed to satisfy customers, the best CEOs and employees take their values seriously.

‘Values can set a company apart from the competition by clarifying its identity and serving as a rallying point for employees. But coming up with strong values—and sticking to them—requires real guts.’
—Patrick Lencioni, author and CEO

And defining them is key. From Trader Joe’s to Ben & Jerry’s, all the companies listed above dedicated time to writing out clear, concise, and attainable objectives. For each statement or commitment, there is an intended audience. But how does a company make sure its values aren’t just words? Incorporating them into the fabric of everyday operations is crucial.

Patrick Lencioni of the Harvard Business Review writes candidly about the pros and cons of having strong company values: “Values can set a company apart from the competition by clarifying its identity and serving as a rallying point for employees. But coming up with strong values—and sticking to them—requires real guts. Indeed, an organization considering a values initiative must first come to terms with the fact that, when properly practiced, values inflict pain. They make some employees feel like outcasts. They limit an organization’s strategic and operational freedom and constrain the behavior of its people. They leave executives open to heavy criticism for even minor violations. And they demand constant vigilance.”

The takeaway

Essentially, there are growing pains—and much like the selective hiring at Google, it’s important for companies to recognize when it’s worth the struggle to take a stand, invest in a cause, or increase training and engagement processes. But ultimately, they will see a payoff.

That little buzzword—”culture”—isn’t so little. According to a 2022 Indeed article, companies with positive cultures “increase employee satisfaction, customer and employee retention, and productivity.” 

Because values are so crucial in creating a company culture, as well building trust in an organization’s brand and leadership, it makes sense to invest some time and thought into what your company stands for and how to stay aligned with those core components.

Of course, no company (or person) gets it right 100 percent of the time, so it’s important to take responsibility when you do make a mistake. These companies must factor in the weight of accountability—and take action to amend any wrongs.

According to a Dale Carnegie Training survey, 81% of employees surveyed stated that it was “important” or “very important” that leaders own up to their mistakes, and yet fewer than half felt they could count on those in leadership to do so. This makes corporate action, whether in the form of public apologies, new policies, or updated terms, an indispensable aspect of maintaining public trust and staying true to company values. For companies like the ones above, the ability to adapt and change with customers’ needs will ultimately determine whether the original guiding tenets are truly a capable force behind the sails of industry.