When you think of management theories and principles that come out of Asia, you usually figure they're coming from Japan. While I was over in Singapore, though, I came across a business philosophy that as far as I can tell hasn’t been publicized much if at all, but certainly represents a radically different way of management.
It’s called the ROFO principle, and was devised a while back by A.B. Goh, managing director of Leica Microsystems, a manufacturer of optical systems and microscopes that was a finalist in the MAXA competition.
ROFO stands for:
On-time corrective action
As Goh explained to me, Leica no longer has a quality department. It took about 10 years to phase out the entire department, but beginning in the 1990s, the company whittled down the headcount in the quality department from 41 to basically none. These people didn’t actually lose their jobs, just the word “quality” in their job titles.
In the Singapore Quality Yearbook, Goh asks: “If quality is everybody’s business, isn’t everybody already performing the quality role, and why do we need a separate quality department? In a modern manufacturing organization, which department owns the quality – the manufacturing or the quality department? If the answer is both, why do we need the quality department to address the quality issues as if they own the quality problems of the entire company? If the answer is one of them, it would give rise to a redundant role in one department.” That’s why, he explains, Leica decided to phase out its quality department and have everyone within the manufacturing department take personal responsibility and ownership for quality.
Just as interestingly, while Leica’s business grew by nearly two-and-a-half times in 10 years’ time, the number of direct managers employed there actually decreased, from 11 to 8. Again quoting from the Singapore Quality Yearbook, Goh points out, “More managers do not mean that more work will be done. Leica is not in the agriculture business where more hands in the rice fields will certainly lighten the workload. Leica wants managers who are able to lead and mobilize the entire workforce to deliver the desired results.... Leica does not need managers who are good at debating as well as pouring out brilliant ideas but nothing gets done.”
Maybe ROFO is a unique concept that can only work in Singapore, and maybe only at Leica. But it was quite eye-opening to see how many quality awards the company had on display in its boardroom. Apparently having a quality-oriented culture doesn’t necessarily require having an actual quality department.