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May/June 1991 - By Andrew Singer            

Ethics, ‘Quality’ and the Persian Gulf War

“Nearly everything the U.S. and its allies used against Iraq—the air-land strategy, the high-tech weapons, the size and mix of the all volunteer forces—seemed spectacularly successful.... ‘It’s unbelievable,’ says John Keegan, a British military historian. ‘It’s a hell of a situation when everything works so well.”’—Wall Street Journal, March 6, 1991.

In the recent conflict in the Persian Gulf, many professed astonishment at the performance of America’s high technology weapons. The eighties, a decade marred by sundry defense contracting scandals, hadn’t quite prepared the U.S. public for the “spectacularly successful” performance of military materiel in the first months of 1991. Amid the $600 coffee pots and $300 hammers, some people, somewhere, were apparently meeting high standards of quality control.

Was there an ethical element in that manufacturing success as well? Is it possible to credit the high performance of U.S. weapons systems at least in part to the ethical climate within the companies that developed those weapons?

“I think that’s true without question,” asserts Norman R. Augustine, Chairman and CEO of Martin Marietta Corporation, the $5
billion aerospace and electronics manufacturer based in Bethesda, Maryland.

‘No one saw him drop it’

Augustine and others are convinced that there is an inextricable connection between “quality” and “ethics.” When asked if a company that lacks reasonably high ethical standards can produce a “quality” product, Augustine, in an interview, replies, “If they did, I think it would be entirely by accident.”

He tells this story. Several years back, a Martin Marietta employee, working on the night shift, dropped a complex electronic component. “No one saw him drop it.”

Nonetheless, the worker told his supervisor what had happened.

It was a good thing. “That electronic box went up in a space flight the next day,” reports Augustine, whose company is a major NASA supplier as well as the nation’s seventh largest defense contractor.

It is critical to establish an ethical environment in a company, particularly a technology company, says Augustine, whose company was a manufacturer of the Hellfire anti-armor missile and the Patriot missile (Raytheon made the Patriot’s radar system). “Without that ethical environment, the logical thing would be for the employee to put the box back on the shelf.”

Importance of admitting mistakes

Augustine isn’t alone in this view. “You can’t have a quality product without honest information flowing,” says Gary Edwards, Executive Director of the Ethics Resource Center (ERC), based in Washington, D.C. “If people won’t or can’t admit their mistakes, resources will be misallocated.” Company officers will blame equipment, for instance, where bad management, or absenteeism, is at fault. Money will be wasted trying to fix equipment that isn’t even the source of the problem.

A connection between ethics and quality? “I think they are very closely related,” says P. Roy Vagelos, chairman and CEO of Merck & Co., Inc., the huge pharmaceutical manufacturer based in Rahway, New Jersey. “You cannot put out a shoddy product and hope to survive as a company.... Everything we do is based on trust. The quality has to be the best and it has to improve every year.”

“I think the connection is a very strong one,” says James E. Hennessy, executive director of the Palisades Institute of Dominican College (Orangeburg, New York) and retired executive vice-president of NYNEX Corporation. “The simplest quality issue is doing what you promise a customer. And promise-keeping is an ethical issue.”

‘Nitpickers helped us’

If an effective ethical climate within the defense industry sustained the U.S. in its most critical military conflict since the Vietnam War, it didn’t come about without a struggle, suggests Louis Clark, executive director of the Government Accountability Project, a Washington, DC, organization that supports whistleblowers. “A number of the people we’ve helped over the years at the Defense Department were raising waste issues, and a number were raising quality assurance issues as well.”

Clark objects to what he sees as a certain institutional smugness on the issue. “[Secretary of Defense Dick] Cheney said that this puts to rest concerns about $600 coffee pots. I thought that was really offensive.”

 The Secretary’s suggestion was that the defense establishment ‘delivered’—in spite of the ‘nitpickers.’ “Well, the nitpickers helped us to get where we are,” says Clark. “Without ethical people—people reporting about waste, quality assurance—those basic checks would not be occurring.”

One long-time advocate of defense-industry reform, analyst Frank Spinney, who works out of the Pentagon, goes further. The jury is still out on ‘quality,’ he insists.

Asked if the performance of U.S. weapons in the Persian Gulf put to rest questions of quality and $600 coffee pots, Spinney answers, “It has not. We still don’t know what the performance was.” The gross error rate of the laser-guided bombs dropped on Iraq and Kuwait has yet to be disclosed, for example.

The war “was not a victory of technology,” asserts Spinney, contradicting the conventional view. The most commonly used air weapons were laser-guided bombs, “and those aren’t new. They’ve been around since Vietnam.” All that can be concluded at this point, says Spinney, is that “our people worked [effectively] and the weapons did something. We could have switched weapons around, and still won.”

Problem of ‘front-loading’

Systemic problems remain, in his view. One of the most egregious practices is one called “front-load-rig,” i.e., deliberately underestimating the cost of future weapons. “We [i.e., the Defense Department] systematically underestimate the whole defense budget, and contractors do the same to us.”

The most recent example is the A-12 attack bomber, a program canceled by the Pentagon because of what it said were cost overruns, delays, and mismanagement. The winning bid to build the A-12 was $1 billion less than its closest competitor, and many said at the time it was a “buy-in,” asserts Spinney—i.e., a lowball bid in which costs would be recouped later. (The contractors were General Dynamics and McDonnell Douglas, the Defense Department’s two largest.)

The net result is “an ethical climate that encourages lying and deception.” Until such systemic problems are addressed, major concerns about both waste and quality will persist, Spinney maintains.

Do ethics programs help?

Is it possible to ascribe to so-called ethics programs (e.g., codes of conduct, ethics awareness training, ethics “hotlines,” etc.) some part in the favorable military outcome in the Persian Gulf? “Only to the extent that there is any correlation between programmatic activities and the behavior of people in organizations,” says ERC’s Edwards.

Ethics programs can “reinforce” a moral climate, but they can’t create it, Edwards explains. That remains a function of good management. But insofar as such programs “make people feel safe putting good information in the system, and not getting hammered for it,” such initiatives, many of which were implemented in the 1980s, may have helped.

“In general,” ombudsman offices, hotlines, codes of conduct “are helpful,” says retired NYNEX executive Hennessy. “The one danger is that they may become a substitute for constant leadership in the right way to do things.” Employees are quick to recognize managers who don’t “walk like they talk.” It is necessary to have “constant leadership by management at all levels” to support ethics and quality. This can be “supplemented by codes, ombudsmen, etc.”

Pentagon reformer Spinney has less regard for so-called ethics programs. “If we want companies to clean up their act, we don’t have to force ethics programs on them.” It’s simpler: Government must “punish the losers and reward the winners,” including the cancellation of programs that don’t meet performance specifications—and the possible curtailing of future contracts. It’s also important to “hold people individually liable.”

Until such systemic changes are implemented, ethics programs are just so much  “window dressing,” says Spinney.

Others don’t paint quite so bleak a picture. “In the defense industry, I watched many dedicated technicians provide high quality services to the military with very short notice,” says Hennessy. “They did this best when they were well trained by managers who coached and helped, but didn’t over-manage.”

One key to achieving quality, according to Edwards, is to have people who identify with the values of the organization—people who “bond with the organization.”

Technical innovations—such as improvements in computers and telecommunications—can only take one so far toward achieving quality in a service economy, he suggests. For the most part, “productivity and quality are the result of employees who identify their own values with the organization’s—in order to make the customer satisfied.” They are the sorts of things that a manager can’t write into a job description—things one can’t ask people to do. They must be given freely.

Norman Augustine recently returned from a meeting of Martin Marietta’s managers. Ethical comportment is the company’s number one priority, the meeting confirmed, and its second highest priority is quality. These are higher priorities within the organization than profit, Augustine reports. “The two go together, especially in the technology business.”

Dealing with problems honestly

Martin Marietta strives to be ethical “not only because it’s right, but because it’s good business.” The company’s standards are what enable “us to be honest with each other, and honest with customers,” so that when problems arise “they are dealt with honestly” and can be fixed.

“If it didn’t work like that, the hardware wouldn’t work,” says Augustine. “You can’t fool Mother Nature. Either the missile works or it doesn’t work.”

Andrew W. Singer is publisher and co-editor of ethikos.
Reprinted from the MaY/June 1991 issue of ethikos
© 2005 Ethikos, Inc. All rights reserved.

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