Innovation: The New Frontier for Quality
Business Journal

Innovation: The New Frontier for Quality

Companies should use the tools they once used to prevent defects to promote fast, transformational change

Is quality still relevant? It's a question John Timmerman, Ph.D., was often asked when he served as the 2013 Chairman of the Board of ASQ, a global organization dedicated to quality.

Incremental improvement is still necessary, but it isn't sufficient to get businesses where they want to be.

After all, it's been decades since Japan and Germany were eating U.S. manufacturers' lunch. Companies got on board with total quality management (TQM) and Six Sigma programs. Congress gave birth to the Malcolm Baldrige National Quality Award. And MBA programs started teaching quality principles. Quality -- that is, zero defects -- was essential to running companies more effectively and competing with global rivals. But is TQM still necessary? Or has it been mastered, and we've all moved on?

Dr. Timmerman, a recognized thought leader on quality and a Gallup senior strategist for customer experience and innovation, has a strong point of view on these questions. In the following conversation, he explains why quality is more relevant than ever.

Gallup Business Journal: When you're talking with senior leaders, what are they concerned about?

John Timmerman, Ph.D.: The speed of innovation is one of their top issues. In the past, a hallmark of quality was a steady cadence of continuous improvement. Incremental improvement is still necessary, but it isn't sufficient to get businesses where they want to be, given the speed of change required for most organizations to stay competitive these days. The next domain of quality will be innovation, because market dominance now requires fast and transformational change.

Senior leaders are also concerned about their strategic challenges. A key opportunity for quality improvement begins when you ask the question, "What's your strategic challenge as a company?" That's the starting point of relevance for senior leaders -- and it always translates into economics.

What do you mean by "translates into economics"?

Dr. Timmerman: The late Dr. Juran is recognized as a thought leader and an architect of the quality sciences. When I attended one of his lectures on quality, I asked Dr. Juran, "When did senior leaders really start to listen to you?" He said, "When I started to translate quality into their language, which is finance and economics." Finance and economics are the means by which companies operate. To get senior leaders to tune in, the quality conversation must be focused on financial outcomes. If you start the conversation with methods, tools, and techniques, they'll tune you out.

I find that senior leaders are more concerned about "what" than "how." Quality professionals must engage senior leaders with a dialogue centered on financial and other important business outcomes -- the "what" -- and be confident that they can deliver these outcomes through the quality sciences -- the "how."

Can quality be used to improve human performance as well as manufacturing performance?

Dr. Timmerman: Absolutely. Businesses should be very proud of how they've used quality methods to create Six Sigma manufacturing results. I predict the next level of improvement will be gained from applying quality tools to improve what I call "human technology" through self-directed development, adaptive work structures, and knowledge transfer processes. Companies need HumanSigma-level knowledge workers to facilitate rapid innovation.

Another aspect of quality is personalization. That might not be on most leaders' radar, but it should be. Right now, most companies do mass production with some level of customization or a shading of personalization. But I predict that this will flip, and you'll see more companies personalizing their products and services. That's because technology and the global economy and distribution systems enable a higher degree of design targeted for individuals. So companies can become integrators or assemblers of highly personalized products and services.

You can see the personalization trend emerging from retail to healthcare. In the past, for example, a consumer would go to a large department store for lipstick, which was merchandised in an array of assorted colors. Today, that consumer can go online and personalize the lipstick by selecting not just the color but also the packaging, formulation, additives, scent, flavor, shine, frost color, and glimmer. Healthcare offers another example: In the past, patients would visit their primary care physician for basic medical care and make an appointment at a large hospital for a complex medical procedure. Today, patients can have basic medical care at a retail store while buying a pack of gum and receive a medical treatment based on targeted genome mapping from highly specialized facilities.

Advanced technology platforms and increased consumer awareness will cause the extinction of many mass production firms if they fail to adapt to this new environment. The new ecosystem will consist of organizations that collaborate to provide highly personalized products and services. This is what C.K. Prahalad and M.S. Krishnan call "R=G, and N=1," where resources are globally networked (R=G) and solutions are created for the individual customer (N=1). R=G and N=1 are the success factors for the new competitive environment, and the businesses that will survive will be the ones that can adapt, innovate, and provide a personalized experience to anyone, anywhere.

How does a company discover what the customer thinks of the quality of a product or service? That's subjective, and it would vary from customer to customer.

Dr. Timmerman: All customers have their own bias, a prism that's been created over time. But you can peek inside it. I asked John Chambers, the CEO of Cisco, how Cisco innovates, because it's a very innovative company, and I couldn't believe what he told me. He said he dedicates 50% of his time to talking to customers.

Now, he's the CEO of a big company. He has a market research department and a quality department, but he's very attuned to his customers -- not just what they say, but what they don't say, and their direction, their business needs, and the problems they're trying to solve. So his leadership and the direction he provides is based on his customers' needs, not his. Not every CEO can do that, but every CEO should consider quality from the customer's perspective. This is why I'm a big proponent of research methods such as ethnography, because it helps unlock customer behaviors and unarticulated needs.

So quality is still relevant.

Dr. Timmerman: Absolutely. Let's go back to what keeps CEOs up at night: rapid innovation to win economic market share. I believe you can have quality -- zero defects -- without innovation, but you can't have innovation without quality processes, the systematic and repeatable methods to foster speed and agility. ASQ's innovation mantra is "Innovation is quality for tomorrow," and I think it's absolutely right.

-- Interviewed by Jennifer Robison

Gallup http://www.gallup.com/businessjournal/166958/innovation-new-frontier-quality.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030