Quality and Innovation

Debanjan Mitra, an Assistant Professor in the Department of Marketing at the University of Florida, is a quality guru – whether quality professionals know it or not. Here’s why: have you ever been frustrated by all those definitions for quality (e.g. the transcendent “you know it when you see it”, Crosby’s “zero defects”, Juran’s “fitness for use”, or the ISO 8402 definition)? I’ve been frustrated too, but Mitra’s work has really helped me make sense of all these different perspectives on what quality is all about.

Mitra noticed that across many disciplines, there were different perspectives on what quality was all about. To understand the meaning of quality from the marketing perspective, which is his interest, he investigated over 300 journal articles in different fields. He found that there were five stages of the dynamic process of achieving and improving quality:

• Organizational antecedents – creating an organization whose capabilities can support achieving world-class quality in products and services
• Operational antecedents – designing quality into products, managing processes to achieve quality
• Production quality - meeting specifications for features, reliability and performance; adequately addressing aesthetics and customer taste preferences to create demand
• Customer consequences of quality – whether and how customers perceive quality, and how this impacts retention
• Market consequences of quality – in terms of market share, as well as the impact of quality and quality improvement on its contribution to profitability and global competitiveness

Here’s my rendition of Mitra’s original charts, showing the relationships between these areas:

“Zero defects” is an aspect of production quality. “Fitness for use” is part of the customer consequences of quality. Strategy, competitiveness and innovation can be related to any of these five categories, but particularly the market consequences of quality. The ISO 8402 definition is the only one that spans all five stages of the dynamic process.

Innovation requires creativity, and has even been described as the act of channeling creativity to produce ideas or products “that people can and wish to use,” (Vandevert, 2003) because creativity is the cognitive process that enables innovation. This topic has been extensively studied in the art and psychology literature.

Bassett-Jones (1998), examining the interrelationship between diversity, creativity, innovation and competitive advantage, defines a creative product as one that a) has novelty, b) is appropriate in the situation it was created to address, c) is public in its effect, and d) derives a perceived benefit.

According to Sternberg (2006), who reviewed 25 years of psychology research on creativity, the creative process that yields innovations is characterized by three intellectual abilities:

• “The synthetic ability to see problems in new ways and to escape the bounds of conventional thinking,
• Analytic ability to recognize which of one’s ideas are worth pursuing and which are not, and
• The practical-contextual ability to know how to persuade others of – or sell other people on – the value of one’s ideas.”

This suggests that for an idea to be innovative, it must meet three criteria: it must be novel, demonstrate utility, and demonstrate relevance. Relevance implies a specific context of use for the idea, a specific time horizon for realization, and also that the new idea must be operationalized and made useful. This final point distinguishes innovation from invention.

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Bassett-Jones, N. (2005). The paradox of diversity management, creativity and innovation. Creativity and Innovation Management, 14(2), 160-175.
Vandervert, L.R. (2003). Research on innovation at the beginning of the 21st century: what do we know about it? In L.V. Shavivina (Ed.), The International Handbook on Innovation. Oxford: Elsevier, pp. 1103-1112.
Sternberg, R., Pretz, J.E., & Kaufman, J.C. (2003). Types of innovations. In L.V. Shavivina (Ed.), The International Handbook on Innovation. Oxford: Elsevier, pp. 158-169.

In Good Business, Mihaly Csikszentmihalyi discusses some insights from Robert Shapiro, CEO of the chemical company Monsanto about authenticity and job design:

The notion of job implies that there’s been some supreme architect who designed this system so that a lot of parts fit together and produce whatever the desired output is. No one in a job can see the whole. When we ask you to join us, we are saying, “Do you have the skills and the willingness to shape yourself in this way so you will fit into this big machine? Because somebody did this job for you, somebody who was different from you. Someone will do it after you. Those parts of you that aren’t relevant to that job, please just forget about. Those shortcomings that you have that really don’t enable you to fill this job, please at least try to fake, so that we can all have the impression that you’re doing this job.”… We ought to be saying, “What can you bring to this that’s going to help?” Not, “Here’s the job, just do it.”

Later in the book, this concept of authenticity – the ability to be real, and get connected to your intrinsic motivation – is broken down into two distinct parts:

Differentiation – How and why are you unique? What can you alone bring to the workplace? What skills and talents are you dedicated to developing so that you can contribute those aspects of yourself to the team? Does the team know what specialized contributions each individual is there to bring, and do they value the contributions that are expected?

Integration – How well are you connected with the needs of others? Can you relate to – and empathize with – your manager’s needs? How well, and how honestly, do you hear the voice of the customer?  Do you have the willingness and the attitude to respond to it?

Authenticity within an organization can influence quality in many ways: people will feel more comfortable recommending and implementing changes, products and services will be tailored meet customer needs and demands more effectively, egos will be tempered, and teamwork will become natural.

Although Shapiro’s example considers differentiation and integration with respect to an individual, the concept also applies to teams in the workplace, and companies and how they relate to their customers and the external environment.

Initially conceptualized by Herbert Simon (1996), the design science paradigm “is fundamentally a problem solving paradigm, [which] seeks to create innovations that define the ideas, practices, technical capabilities, and products through which the analysis, design, implementation and management and use of… systems can be effectively and efficiently accomplished.” (Hevner, 2004) The aim of design science is to produce new artifacts that can be used to enable different modes of problem solving, or to solve emerging problem categories. The framework for the design science paradigm establishes innovation as an outcome that results from the design process.

This field is interesting and important to quality researchers because applying the philosophy can help us more rigorously design, develop and validate new quality systems and new tools for quality improvement.

I’m particularly intrigued by this paradigm because it embraces learning-by-doing: “In the design science paradigm knowledge and understanding of a problem domain and its solution are achieved in the building and application of the designed artifact.” To understand it, you build it. Software developers understand this instinctively, but the tools used by project managers can’t handle the uncertainty. Can we use the philosophical approach of design science to build and validate new tools to improve the project management process itself?

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Hevner, A., March, S.T., Park, J. & Ram, S. (2004). Design science in information systems research. MIS Quarterly, 28(1), March 2004, pp. 75-105.
Simon, H. (1996). The sciences of the artificial, 3rd ed. Cambridge, MA: MIT Press.

Why are Ford, Chrysler and GM in trouble? Can a financial bailout help? In late 2007, I wrote a 7,000 word article examining the ups and downs of the U.S. auto industry. Using a historical analysis of high-level metrics and examining the evolution of quality perception and quality improvement in the auto industry, I show that a financial crisis could actually be detected a year ago.

Citation Radziwill, N.M. (2008). The Role of Quality in the Decline of the U.S. Automotive Industry. Unpublished manuscript, retrieved on Month DD, YYYY from http://qualityandinnovation.files.wordpress.com/2008/11/radziwill_qualitydeclineusautoind.docDownload the report by clicking on the title; contact me if you would like to run this in your magazine or journal. Abstract In 2007, in response to disappointing market shares over the previous few years, General Motors (GM) launched an ad campaign to convince consumers that the quality of its vehicles was comparable to foreign manufacturers in order to catalyze sales and grow market share. This situation was not unprecedented. In 1982, the National Academies recognized a similar crisis and launched a study to investigate why it occurred. What quality-related root causes have historically led to deteriorating conditions within the U.S. automotive industry? How can auto manufacturers and U.S. policymakers use this information to strengthen this sector of the economy in the future? An analysis of the economic, regulatory, and financial impacts of quality is used to identify the points in time at which quality-related causes led to a downturn in the U.S. automotive industry. The results are used to gauge the managerial implications that could avert such events. Excerpt from Conclusions What can manufacturers do to prevent quality-related downturns within an industry? Based on the analysis of this case in automotive manufacturing, there is no substitute, first and foremost, for effective financial management. Ensuring positive cash flows and profitability means that assets will be available for investing in new initiatives that improve quality, or for the marketing efforts that will reveal and promote a quality reputation. According to the ACSI’s most recent ten-year report, U.S. manufacturers continue to compete on price while foreign manufacturers continue to compete on quality. Though some argue that quality is becoming competitively neutral (Harbour, 2006), there are clear lessons from history that this focus erodes market share and challenges productivity over the long term. Although U.S. automakers are now as efficient as any other manufacturers in the world (Warner, 2005), and quality levels are competitive, the financial crisis may be so severe that the industry could require strong federal support, and potentially intervention, to fully recover.

Here are some additional perspectives from other blogs:

• What options are on the table
• Why oversupply is an issue
• How different groups view the options
• And my personal favorite… Innovation is the Key in Times of Gloom: A Check on the Auto Industry

Innovation is in the eye of the beholder. The solution offered by the American Competitiveness Initiative focuses on absolute innovation, but does not consider relative innovation. Catalyzing relative innovation still requires a capital investment, but will focus less on the basic R&D issues and more on the issue of appropriate technology, even within the host country.

My Proposed Two-Pronged Approach to a New American Competitiveness takes these factors into consideration, and recommends two things we should do as a country:

1: Provide Practical Innovation Education to Everyone – We must educate EVERYONE on what innovation really is – the act of making ideas and inventions useful and relevant to people and social groups. Innovation is always relative, not not always absolute. Innovation is about creative problem solving that improves efficiency or productivity, expands capabilities, or enhances quality of life. We can all innovate in our local communities, even if we don’t come up with the complex or high-tech ideas ourselves! The key question is: How can we make individuals’ lives better? Innovation is not a mysterious practice reserved for scientists, engineers, or people with creative ideas. We can all be innovators.

2: Implement a National Quality Agenda – This idea, originally raised by ASQ President Robert Saco in the October 2008 issue of Quality Progress, embraces a “systems thinking” approach to resolving key social and sustainability issues at the national and international levels. How do we look at long-term issues through the lens of “systems thinking”? How do we transform our government’s budgeting process to accurately enact strategic themes and priorities, and promote real collaboration and cooperation that is not confounded by fictitious budget partitioning? How do we embrace innovation to make things better for all people? Saco introduces it this way:

What is to be done? Mr. President, in brief, we need a National Quality Agenda to broaden our thinking in terms of systemic and long-term issues and solutions. You cannot afford to ignore longer-term stealth issues like healthcare, energy, infrastructure and education. Ignored, these matters will ensure the accelerated decline of the nation. Government must not do everything, and with a looming federal deficit of $500 billion, it simply can’t do everything.

Yet, by promoting initial conditions that frame an appropriate long-term agenda and nurture an environment of possibility and collaboration, the stage is set for real progress in the months and years to come.

New is not always better. Innovation, however, always seeks to make things better! (In case this seems like a paradox to you, the missing link is invention – inventions are always new, but they don’t necessarily need to be useful to many people to retain their novelty.) Sometimes, just looking at how to change our perspectives, simplify our existing structures, and take a quality-driven approach, we can uncover new ways to innovate. Are you ready to take the leap?

Increasing innovation is something that many companies want to do to enhance and sustain competitiveness. In “Will the American Competitiveness Initiative Work?” I asked whether throwing money at the problem is the best approach.

I ask this question because most of the books and academic literature on innovation only consider the absolute aspects of innovation. For example, how do you come up with new ideas? Or bring disparate ideas together into new amalgams of ideas? How can you unite the right people to stimulate productive collaboration? How do you generate new patentable machines and methods? [I’m thinking about books like Kelley’s The Art of Innovation and The Ten Faces of Innovation , or the Harvard Business Review on Innovation.]

But innovation is relative to a person, a community, or a society – and the social context within which these people interact with one another. The concept of appropriate technology considers that the progress and advancement brought about by innovation might involve a simple, uncomplicated solution. With this in mind, here are the two genres that an innovation can follow:

• Absolutely Innovative – A new idea, invention or product is implemented, possibly in a new social context or for a new purpose. Examples: iPod/iPhone, composite materials, social networking software, nanotechnology. The novelty of these innovations is clear – it’s new to everyone, but is possibly only useful to some.
• Relatively Innovative – It might not be a new idea, invention, or product, but it is implemented in a new context or for a new purpose. Example: bringing clean water to an impoverished village. Is it absolutely innovative? No, because the technology for producing clean water is not new. But the way in which the technology is integrated into the new environment might yield great benefits to the local community, and thus be considered an earth-shattering innovation.

There are a few visionary researchers who are more sensitive to relative innovation – in particular, C.K. Prahalad’s The New Age of Innovation and The Fortune at the Bottom of the Pyramid.

A New American Competitiveness can be fueled by relative innovation. (One more day and I’ll post my two-pronged strategy.)