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Automotive Industry

J. D. Power: "Mr. quality": while Power's quality, dependability and satisfaction surveys are the industry standards, some aspects are controversial. Power explains why they are what they are

Automotive Industries, June, 2004

Dave and Julie power started this internationally known and respected business on their Los Angeles kitchen table in 1968. Prior to that--after graduating from College of the Holy Cross in 1953, serving four years on U.S. Coast Guard icebreakers in the Arctic and Antarctic and earning an MBA from the University of Pennsylvania's Wharton School of Finance--he worked in finance and marketing positions at Ford, Marplan, J. I. Case and McCulloch.

These assignments were generally challenging but unfulfilling. As a consultant (to GM's Buick and GMC Divisions) and later as an executive in marketing research, he found U. S. managers too often tending to question and "spin" the research until it told them what they wanted to hear instead of what they needed to learn. Unlike them, Power saw a pressing need to change, so he founded this new company to fill that need.

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Detroit makers wouldn't give him any work at first, so his first automotive client became Toyota, which was re- entering the U.S. market after a disastrous initial attempt with a shoddy little car called Toyopet. Toyota has led Power's quality rankings pretty much ever since, partly because it designed its quality control system around his surveys.

"I heard that there was this Japanese company by the name of Toyota that was re-entering the market with a new Corona automobile that was going to put them back on the map," Power Mates. "The perception of Japanese products in those days was tin and bamboo. They knew they had to do something differently, and they were able to open up their thinking. So I had an organization that was open to listen to the data, and this gave me a tremendous advantage. When I'd come in with a presentation, they didn't challenge the methodology or the way the questionnaire was designed or whether we had the right return rates. What they wanted was the information, and if they didn't have an answer on a specific question, they'd ask me to go back and do another survey."

As Toyota began to prosper and grow, it hired U.S. staff from American makers, and some began looking at research in the old Detroit ways. So in 1971, Power started doing smaller independent studies on specific products. "The first one," he says, "was on the Mazda rotary engine. Cash flow was a major problem in those clays, so I had my wife tabulating the data at home. I'd bring home 30 or 35 questionnaires that I'd received that day and hand them to her, and she'd show me the tabulations up to that time. One night, she said, 'Mazda has an O'ring problem.' I said, 'What's an O-ring?' She said, 'I don't know, but look at this."

In those early years, Julie Power tabulated consumer surveys on the kitchen table while also caring for their four young children. While she never had an official title, she actively participated in the company's development, working closely with her husband on everything including major business decisions, until her untimely passing in 2002. "We owned the data since we funded it ourselves," Power continues, "and we sold that report to 14 manufacturers. It was an eye opener for the industry to see that this highly touted rotary engine had this flaw that was going to cause them many problems. We tried to keep it within the industry, but somebody leaked it to the press. And that changed my life.

"I got a call one morning from the Wall Street Journal's Detroit Bureau Chief, and I could tell that he knew about the study. I asked, 'Where did you get this?' He said, 'We have our sources. I understand that they have an O-ring problem.' I said, 'Yes, but this is easily fixed if they put their attention to it, and it's not as severe as if they had an apex seal problem, which earlier rotary engines suffered from. I want to give you a balanced understanding of the problem, so I'd like to send you my press release.' He said, 'Well, you'd better get it to us right away.' So after I hung up, I sat down with my yellow pad and pencil and wrote my first press release. Within 24 hours, it was in the Wall Street Journal, and within 48 to 72 hours, it was in every paper and magazine in the world."

This was a huge blow to Mazda. "They denied that they had the problem," Power says, "but we stood our ground with the findings. The press saw that what we said was going to happen did happen and that really helped our credibility. From that point on, the media has been delivering our message to top management throughout the industry."

Auto Research Still Leads

From its Westlake Village, Calif., headquarters, J. D. Power and Associates' clients today include virtually every auto manufacturer in the U.S. market and many other companies in other industries around the world, and Chairman Dave speaks frequently to top managers and boards of directors worldwide. The firm's renown and reputation has led to research and projects in a variety of industries including automotive, financial services, telecommunications, travel, home building, utilities and healthcare.

Automotive Industry

J. D. Power: "Mr. quality": while Power's quality, dependability and satisfaction surveys are the industry standards, some aspects are controversial. Power explains why they are what they are

Automotive Industries, June, 2004

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