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GM's New Approach to Quality

 On June 4, Automotive News (autonews.com) reported that Mark Reuss, GM North America president, was instituting a new compensation structure for salaried employees—all salaried employees, be they designers, engineers, or executives—that would tie a portion of their bonus to customer loyalty.

 On June 4, Automotive News (autonews.com) reported that Mark Reuss, GM North America president, was instituting a new compensation structure for salaried employees—all salaried employees, be they designers, engineers, or executives—that would tie a portion of their bonus to customer loyalty. As in customer satisfaction with their cars and trucks. Their entire satisfaction.

 
A few weeks before that, on May 17, we talked with Bob Ottolini, GM Executive Director Global Quality Strategy. We had been told that there was something that was going to be changing in GM’s approach to quality in June, but we hadn’t been told what precisely that was, and were told that Ottolini couldn’t tell us. One of the changes was that on June 1, Alicia Boler-Davis was named GM Vice President Global Quality—a title that was tied with her previous one, which was Vice President of U.S. Customer Experience.
 
We weren’t 10 minutes into our conversation with Ottolini when he said, “You’re probably hearing a broken record of the word customer, but it’s what we are all about. It’s the way we need to move forward from a quality perspective.”
 
And when we look back at what Ottolini told us and what happened subsequently to that, the quality picture at GM begins to come into focus.
 
Ottolini is a 39-year vet of GM. He’s worked not only in quality roles in the U.S. and Europe (he took on his current position earlier this year), but also spent some 30 years in product engineering. Consequently, he is well versed in all of the quality methods and metrics, in the “things gone wrong” and the “build it right the first time,” in Deming and Juran, in warranty costs and GM’s internal metric Incidents Per Thousand Vehicles. He gets all that. Those are the basics.
 
“But you have to go to the top of the pyramid: It is all about the customer. If the customer is satisfied with the whole experience with the product, then you have a quality product. If you fall apart in any key area in customer satisfaction, then you have problems,” he said. And note well the “whole experience.”
 
Not only is quality not just what goes on in the Quality Dept., but it is, Ottolini said, important for everyone in the organization (e.g., Reuss’s all salaried employees) to understand what the customer expects: “People in manufacturing, engineering, finance, purchasing—they all ought to be aware of what the customers are saying about quality.” One of his tasks is making sure that this message is delivered on a cross-functional basis, so that all the people “who touch and are accountable for our products”—even the person who does purchasing of glove box doors—“understand what the customers want and meet those customer requirements.”
 
What’s more, it is not just about the quality of the product that leaves the factory, but the quality of the product five years or more down the road. Ottolini explained that if you own a car for several years, you probably don’t remember the first 90 days unless there was something egregiously wrong. But what you do remember is what is going on with the vehicle then: are you spending a lot of money on it to keep it running; does it feel solid or like it is falling apart? When people are thinking about getting their next car, that’s when you really want them to feel good about the car or truck.
 
And if they do, that is likely to result in customer loyalty. And that’s going to result in a higher number on a bonus check.—GSV
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