We implemented a continuous quality improvement initiative in pursuit of a "zero-defects" performance goal in surgical pathology that required design of novel data collection tools to assess our current condition and sources of defects and waste. We defined defect as a flaw, an imperfection, or a deficiency in specimen processing requiring delaying or stopping work or returning work to the sender. These defects were noninterpretive, nondiagnostic defects critical to quality. Through a blameless work environment and contributions from all workers, we defined a baseline surgical pathology case defect rate of 27.9%, mostly arising in the laboratory (89.3%); only 8.3% were preanalytic; 2.4% resulted in amended reports. Additional focus on fidelity of patient and specimen identification allowed us to define defective identification in 1.67% of cases, with blocks and slides accounting for 78% of the defects. The misidentification defect rates per million opportunities for all sources were 4.3 to 4.8 sigma. These misidentification defects for 3 weeks required 159 hours of manual rework, or an annualized 1.3 full-time-equivalent employees. We found that through deep and honest exposure and the concerted effort of all workers, we could identify numerous sources of waste in our processes. This knowledge formed the structure for effective changes to strive toward a zero-defect performance goal.