Making quality Job 1
When A. Thomas Young was put in charge of what was then Martin Marietta Corp.'s Orlando-based electronic and missiles group in 1985, the division was producing such poor-quality products it was on the government's critical list.
"I used to say that very few of our 14,000 employees probably drove to work each day intending to do a poor job, but that by 8:30 in the morning, management could turn them around," says Mr. Young, Martin Marietta's president and chief operating officer.
Why? Company managers repeatedly told workers to use the proper tooling and follow correct procedures. Quality was as important as cost and meeting deadlines, managers said.
"We couldn't understand the lack of employee response until we realized we simply were not believed," he says. The company had always paid lip service to quality, as long as it didn't interfere with meeting cost and schedule goals.
Then "we said quality was first, above all else," Mr. Young said.
The company spent a lot of money on the right tools for workers and, he added, "We went out on the shop floor and gave gifts to employees who stopped work rather than producing inferior products."
Martin Marietta followed up by organizing work teams and spreading decision-making authority to lower levels. "Unit labor costs in many cases were cut in half," he said. "Government audit deficiencies dropped to zero." And the company met production schedules."
The lesson, Mr. Young said, is: "If you do it right the first time, it's cheaper and faster."
American companies are acknowledging that important business decisions calling for ethical judgments are made every day by low-level employees.
Some ethics issues for the '90s: where corporations choose to put jobs, how companies train and educate workers and how they approach environmental issues.
Self-interest is one reason for the surge in companies adopting or strengthening ethics policies, said Steven Alan Reiss, of the New York law firm Weil, Gotshal & Manges.
Over the last 20 years in the United States, he said, the distinction between civil and criminal liability for corporations has been "blurred." And in the last decade, the trend has been toward escalating criminal penalties.
Meanwhile, companies realize it is important to share the information about how their ethics policies work. In 1987 the Conference Board, a business-supported research group, said only a handful of companies provided copies of their policies. In the most recent survey, 75 companies did.