The Case for Proactive Vulnerability Assessment

Headline:
Honda Recalls 646,000 Vehicles Worldwide Over Faulty Switch
News Source: JusticeNewsFlash.com by EIN, 2010/02/02
Legal news for product liability attorneys. Honda recalls the Fit after discovering a switch poses a fire hazard. Product liability attorneys alert- Honda recalled the Fit over the power window switch, which poses a fire hazard to consumers.

Headline:
Toyota's other pedal problem: Lawsuits
NEW YORK, Feb 1 (Reuters) - Toyota Motor Corp is facing a growing number lawsuits from consumers who complain their vehicles suddenly accelerate or may do so, and want the world's largest automaker to pay for it. Last week, Toyota stopped selling eight models in the United States and Canada, including its popular Camry and Corolla, because of possible unintended acceleration. Some 8 million vehicles are up for repair worldwide over problems including alleged faulty accelerator pedals made by the supplier CTS Corp, and the possibility that floor mats could jam the accelerator pedal.

Headline:
CPSC Recalls 15,000 Horse Figurines Over Lead Paint
January 30, 2010 (NewYorkInjuryNews.com - Injury News)
New Source: JusticeNewsFlash.com
Minneapolis, MN—The U.S. Consumer Product Safety Commission (CPSC) http://www.cpsc.gov/ and Blip Toys have voluntarily recalled Nature Wonders HD pinto horse toy figures, after it was revealed that the toys violate the federal lead paint standard. The recall was announced by the CPSC on Tuesday, January 26, 2010.

Headline:
Tree Stands and Brackets Recalled Due to Fall Hazard
New Source: JusticeNewsFlash.com
CPSC announces recall of tree stands and brackets due to fall risk. Product liability lawyer alerts- Tree stands recalled due to fall risk, CPSC reports. Decatur, ALSummit Treestands LLC has participated in the voluntary recall of Talon Hunting Hang-on Tree Stands and Brackets due to the fall hazard they pose to consumers. The U.S. Consumer Product Safety Commission (CPSC) http://www.cpsc.gov announced the recall on Thursday, January 28, 2010. The CPSC reported, The tree stand can unexpectedly detach from the tree when the brackets fail, posing a fall hazard to consumers. Approximately 6,800 tree stands, brackets and straps are involved in the recall.

What is more disturbing than the content of these four news stories is that they were from the FIRST TWO DAYS of February, 2010. The numbers are staggering. The cost is mind-boggling. The impact is global. The long-term consequences cannot be measured because the manufacturers will only have the opportunity to fix a small number of the products. Lack of notification and consumer apathy will ensure that many of these faulty products will be in the hands of customers for decades. The release of these products to the public by the manufacturers is not only keeping the Consumer Products Safety Commission busy, it continues to overload the civil court dockets with products liability lawsuits. This epidemic borders on criminal behavior because the vast majority of these defects were avoidable!

When Lexus was introduced by Toyota as their high-end line of ultra-reliable vehicles, we in the quality assurance field studied their processes and training to learn proactive techniques for process excellence. The Toyota quality model had long-been a benchmark of success in minimizing defects, so we were eager to learn of the ongoing advances. During that period, there was a popular case study that made many of the quality assurance journals as an example of proactive quality management.

A customer complained that the gas pedal on her Lexus caused her shoe to become jammed between the pedal and the floor mat, resulting in the heel breaking from a very expensive pair of Ferragamo shoes. As the legend was told, the dealer immediately replaced the shoes and within a week Toyota had flown an engineer from Japan to New York to study the problem. Within a month, a fix was designed and all Lexus were voluntarily retrofitted with an improved gas pedal.

While the exact details of the case study may have been embellished in the retelling, this example of customer service and proactive defect avoidance has been used as a benchmark for teaching continual process improvement and customer satisfaction. Fast forward to the above story of millions of Toyota vehicles being recalled (and production halted) to fix a gas pedal problem. Is this the definition of irony? What has happened to Toyota over the last twenty years?

Since I have not been commissioned to perform an exhaustive quality audit of Toyota, I can only present a scientific hypothesis based on 40+ years as a quality control engineer, 20 years as a management consultant and ten years as an expert witness in products liability and organizational negligence litigation. It is a phenomena we have termed Enterprise Entropy©.

(En•tro•py - noun: The inevitable and steady deterioration of a system)

Enterprise Entropy typically manifests itself as follows: A company is launched to fill some perceived gap in a market. The principals are determined to make the product or service “better and of higher value” (or some such superlatives) than those currently in the market. They execute per their vision and values and rise to prominence in their industry. Their name becomes synonymous with quality and value. Then the business “changes hands,” either by sale of the company or generational transition from the older to the younger, the “Boomers to the Gen X to the Gen Y.” The new leadership rides the crest of their public reputation while on a mission to drive down costs, increase profits and penetrate new markets.

Many companies that rose to stardom during the second half of the twentieth century have become mostly entropic skeletons of their former majesty. Production of their products and services are now outsourced, off-shored, throw-away hermaphrodites of what was designed and produced by the founders. The vision and values of the founders have been methodically diluted as time and business pressures and loss of focus caused systematic decay. Oftentimes, customer service issues begin to surface signaling an increase in the probability of impending product failures. This priceless message from consumers is, tragically, too-often dismissed as customer stupidity or buyer’s remorse.

We are utilizing the lessons learned from our expert-witness assignments, harmonized with our quality management tools, as the basis for making executives aware of the potential liability issues within their organizations. Just as we have used our assessment and diagnosis tools to help improve processes, we are applying ourselves to uncover the warning signs of pending catastrophes that may have become embedded in products and services.

As best-selling author Malcolm Gladwell points out in his books Tipping Point and Outliers, we are often unaware of when symptoms turn into epidemics until it is too late. Gladwell’s research goes on to make the case that well-meaning leaders are prone to misdiagnosing the problems and then trying to fix the wrong root causes. He also points out that those attempting to communicate the message of impending disaster are often ignored.

The disease of Enterprise Entropy has also permeated the quality assurance disciplines set the stage for inherently unsafe products to reach a critical mass and explode into an epidemic of a country producing the equivalent of “Japanese Junk” as seen in the 1950’s. Currently however, rather than defective products simply being thrown away, we have cadres of attorneys ready to sue your company into non-existence.

Tom Taormina was a Quality Control Engineer at NASA’s Mission Control Center for 14 years. He was part of the Apollo 13 recovery team and heard the words “Houston, we have a problem” first hand. His career has been dedicated to hands-on proactive business excellence and he has written ten books on quality and business process improvement.



tt@taorminagroup.com www.taorminagroup.com

Perfecting Mediocrity

The above is the title of a book manuscript I wrote about two years ago. Having had ten books published, I set out to get number eleven accepted by a reputable publisher. I was told repeatedly, however, that the title and the content were too provocative. My theme was (is) that manufacturing and service companies in this country have systematically abandoned “pride in workmanship” resulting in substandard products and services that are marginally acceptable in quality, mediocre in reliability and increasingly prone to failure in normal use, with often-catastrophic results.

In our preparation as expert witnesses in product liability and organizational negligence law suits, we are repeatedly examining and testifying about once-robust and reputable companies that have allowed entropy to destroy their quality and value systems. (En•tro•py - noun: The inevitable and steady deterioration of a system).

Entropy manifests itself as follows: A company is launched to fill some perceived gap in a market. The principals are determined to make the product or service “better and of higher value” (or some such superlatives) than those currently in the market. They execute per their vision and values and rise to prominence in their industry. Their name becomes synonymous with quality and value. Then the business “changes hands,” either by sale of the company or generational transition from the older to the younger. The new leadership rides the crest of their public reputation while on a mission to drive down costs, increase profits and penetrate new markets.

Many companies that rose to stardom during the second half of the twentieth century have become mostly entropic skeletons of their former majesty. Production of their products and services are now outsourced, off-shored, throw-away hermaphrodites of what was designed and produced by the founders. The vision and values of the founders have been methodically diluted as time and business pressures and loss of focus caused systematic decay. Oftentimes, customer service issues begin to surface signaling an increase in the probability of impending product failures.

The Taormina Group is utilizing the lessons learned from our expert-witness assignments as the basis for making executives aware of the potential liability issues within their organizations. Just as we have used our assessment and diagnosis tools to help improve processes, we are applying ourselves to uncover the warning signs of pending catastrophes that may have become embedded in product and service enterprises. As best-selling author Malcolm Gladwell points out in his books Tipping Point and Outliers, we are often unaware of when symptoms turn into epidemics until it is too late. Gladwell’s research goes on to make the case that well-meaning leaders are prone to misdiagnosing the problems and then trying to fix the wrong root causes. He also points out that those attempting to communicate the message of impending disaster are often ignored. We are studying Paul Revere’s success strategy in communicating to the leaders of the day that the British invasion was eminent, in hopes of stemming the epidemic of product liability.

The cumulative entropy of quality assurance disciplines set the stage for perfected mediocrity to reach a critical mass and explode into an epidemic of a country producing the equivalent of “Japanese Junk” as seen in the early 1950’s. Currently however, rather than defective products simply being thrown away, we have cadres of attorneys ready to sue your company into non-existence.

A Forensic Business Pathology® assessment will uncover the symptoms of entropy and provide a blueprint for production processes capable of producing defect free products. The end result is that the consumer will be product failure protected and your company will be made liability suit-proof.

Tom Taormina, CMQ/OE, CMC
The Taormina Group, Inc.

http://taorminagroup.com
http://legalquality.blogspot.com/

IF YOU PLAN TO FAIL, AND SUCCEED, WHICH HAVE YOU DONE?

I felt it would be appropriate to end the year by posting a brain teaser. My point was not to immerse us in a didactic debate but to propose starting 2009 with a challenge that we each take an introspective look at our businesses.
It is my observation as a consultant and expert witness that many business leaders unconsciously plan to fail and succeed at it. This is not the result of some masochistic wish but the inevitable truism that failing to plan is planning to fail. I am not sure why human nature makes it so difficult for us to look into a mirror and objectively see our weaknesses, but that process is one of the most poorly executed by the most intelligent and talented people I know (including ME).
Part of the answer is that we have seen the literal and figurative reflection of ourselves and our business so often, we have developed a filter that only lets us see a certain image that seldom changes. Just as we do not see the crows-feet developing around our eyes as we age, we do not see subtle changes in our organizations until they precipitate some sort of crisis.
An example is a company I worked with that was pioneering bio diesel fuel refining. They designed and sold hundred of units for home and small businesses that refined used cooking oil into diesel fuel. Through the formative months of development, we planned for structured growth, scalable processes and customer support. During the same time period, used cooking oil was available from restaurants for free because there was a disposal fee to the restaurateur. By not planning for how success would affect their business, the supply of used cooking oil literally dried up when there was a sudden demand for it by the new users of bio diesel converters. At the same time, increased use of corn for ethanol made cooking oil a very expensive commodity and completely destroyed the economic model of bio diesel refining.
While the entrepreneurs thought they were planning to succeed, their paradigms caused them to plan to fail. While the crystal ball has not yet been perfected and the Ouija board has its limitations, there are more robust approaches to holistic assessment and business process optimization that you might want to investigate as we move into a new year that is target rich in opportunities.
Holiday Greetings from Tom, Midge and the Taormina Group

Successfully Avoiding Product and Service Liability

If you are in a manufacturing, service or distribution business, sooner or later you are likely to be blind-sided by a product liability claim or a law suit. The suit may or may not have any basis, but you have little choice but to spend large sums of money and time defending the allegations.In my seven years as an expert witness, I have seen plaintiffs walk away with a cash settlement even though their claim defied reason. Some insurance carrier’s pay-off “nuisance” claims to minimize their exposure while they unwittingly encourage unethical people to continue to file frivolous complaints.

On the other hand, manufacturers and service providers seldom look objectively at their processes, products and services from the perspective of potential risk. It is not our nature to systematically analyze each step in our business operations, looking for potential opportunities for a consumer to be victimized or injured by our product or services. At best, most organizations grudgingly implement risk mitigation guidelines from their insurance carriers and consider these measures an imposition and added cost.

There are also a handful of companies that consider risk a usual cost of doing business. In my work as a quality control engineer and business consultant, I have witnessed company leaders who have built “acceptable risk” into their business model. They build (or import) products that are of questionable quality, sold at discounted prices to an unsuspecting public, knowing that very few will complain and even fewer will attempt to sue the company. The inevitable law suits become just another cost on the balance sheet with no regard to individual or social consequence.

Most business leaders have never contemplated or anticipated a scenario such as described in a law suit complaint and their first reaction is shock, followed immediately by denial and anger. They become so obsessed with remediation and defense that the personal and financial trauma may be irreversible.

Over forty years and my work with over 500 companies, I have found a more robust solution to “risk mitigation.” Forensic Business Pathology® (FBP) is a set of tools companies can use for “risk avoidance.” The tools have long been proven by enlightened business leaders for continual process improvement and proactive quality management.

The “pathology” metaphor was chosen to prepare us for a diagnostic approach to risk avoidance. FBP proactively performs a structured, holistic assessment of your business similar to how medicine uses a CAT scan to diagnose disease hiding within our bodies. The procedure requires that everyone in the organization subject their methods and processes to clinical examination with the real possibility that there may exist cancerous cells that we would rather not know about, admit to or treat surgically.

The tenets of FBP for risk avoidance are elegantly simple:

• Develop an irrevocable company goal that NO critical defect shall ever reach a customer.
• Use quality process improvement tools to map all business processes, their interrelationships and their dependencies.
• Assess each process on its own and assign metrics for effectiveness, quality and reliability.
• Dissect each process until all opportunities for defects or mistakes are identified and understood.
• Objectively improve the processes until they are innately safe, reliable and continually-monitored metrics warn of pending problems before they happen.
• Remove the concepts of defect inspection, rework, punishment and blame from your organization.
• Replace them with individual and organizational accountability for the outcome of everyone’s work.
• Continually elicit and scrutinize customer feedback for potential issues and correct them immediately and proactively as a “gift” of valuable information.
  
  

While the tenets are simple, their implementation requires uncommon courage by business leaders to assess their business for systemic disease and eradicate it with tenacity and finality. It requires driving any signs of mediocrity from the organization just as you would remove pre-cancerous cells from your body.

There is another dramatic benefit to pro-activity. That is profitability. Just as it is customarily assumed that quality management is an indirect cost, so has risk assessment shared that mythology. Any initial costs to establishing proactive quality and risk avoidance processes are very quickly overcome by the reduction in rework, customer complaints, customer returns, recalls and, inevitably, avoidance of law suits.

We have not learned pro-activity in business school. Our model is minimizing risk rather than avoiding it. The rewards to an FBP-modeled company can be enormous when we replace rework with products and services that are always compliant, when we replace management with leadership, when we replace punishment with accountability and when we no longer need a customer service department.