Tag Archives: economy

Perception of Value & Today’s Cryptocurrency “Crash”

Artist’s rendering of Bitcoin. THERE ARE NO ACTUAL COINS THAT LOOK LIKE THIS. Don’t ever let anyone sell you one.

Today, many cryptocurrencies lost ~35-50% of their value. Reddit even posted contact information for the National Suicide Prevention Hotline in /r/cryptocurrency, knowing how emotional investors were bound to be today. Bitcoin, which was nearly $20K in mid-December and has been hovering near $14K this past week, dropped nearly $4K and almost sunk below the $10K milestone. I usually track the price of Bitcoin at http://bitcointicker.co, which can show the posted prices from several exchanges (web locations where people go to buy and sell, like Ebay). There are hundreds of cryptocurrencies and many of them dropped in value today.

Why did the prices drop so much on Tuesday? Here are some likely influences:

Market prices are usually driven by supply and demand — for example, if there aren’t that many lobsters available in a particular area at a particular time, and you go to a restaurant hoping to order one — you’ll pay a premium. But that price is also influenced by the quality of the product, the image of the product, which influences your perception of its value. Quality reflects how well something satisfies stated and implied needs or expectations.

Value, however, is quality relative to price, and influenced by image. And people are not always rational: they’ll pay a premium for image, even if the value of a product isn’t particularly high. Just think of all the Macs on display at schools, coffee shops, and airports. Price is related to value… usually, price goes up as value goes up.

Where’s the value of cryptocurrency? A Bitcoin does not, on its own, have any inherent value — just like a dollar or a Euro (a “fiat currency”). But the prospect of an asset that will increase in perceived value — where you can buy low, hold (sometimes just for a few days), and sell high because there are lots of people willing to buy it from you — will have perceived value. Hundreds of early adopters — or “Bitcoin millionaires” — are getting people excited about the prospect of making small investments and reaping huge rewards. That this has happened so recently lends a mystique to ownership of cryptocurrencies and Altcoins (or “alternatives to Bitcoin,” like Ether) in addition to the novelty.

Value is attributed to things by people, and cryptocurrencies are no exception. The quality of the currency itself, and the technical solidity of the platform upon which one is based, isn’t really tied to the cryptocurrency price right now — although this will probably change as knowledge and awareness increases.

Is this the end of Bitcoin? That’s doubtful — there are too many innovators who insist on exploring the technological landscape of cryptocurrencies and blockchain technology, and lots of investors willing to fund them. In the meantime, there are unlikely benefits: because cryptocurrencies are not yet mainstream, a “crypto crash” is not as likely to ripple through the whole economy (no pun intended) like the subprime mortgage crisis of 2008. But if you do decide to buy cryptocurrency, don’t invest any more than you can afford to lose.

Where is Quality Management Headed?

Image Credit: Doug Buckley of http://hyperactive.to

Image Credit: Doug Buckley of http://hyperactive.to

[This post is in response to ASQ’s February topic for the Influential Voices group, which asks: Where do you plan to take your career in 2016? What’s your view of careers in quality today—what challenges is this field facing? How can someone starting out in quality succeed?]

We are about to experience a paradigm shift in production, operations, and service: a shift that will have direct consequences on the principles and practice of design, development, and quality management. This “fourth industrial revolution” of cyber-physical systems will require more people in the workforce to understand quality principles associated with co-creation of value, and to develop novel business models. New technical skills will become critical for a greater segment of workers, including embedded software, artificial intelligence, data science, analytics, Big Data (and data quality), and even systems integration. 

Over the past 20 years, we moved many aspects of our work and our lives online. And in the next 20 years, the boundaries between the physical world and the online world will blur — to a point where the distinction may become unnecessary.

Here is a vignette to illustrate the kinds of changes we can anticipate. Imagine the next generation FitBit, the personalized exercise assistant that keeps track of the number of steps you walk each day. As early as 2020, this device will not only automatically track your exercise patterns, but will also automatically integrate that information with your personal health records. Because diet strategies have recently been shown to be predominantly unfounded, and now researchers like Kevin Hall, Eran Elinav, and Eran Siegal know that the only truly effective diets are the ones that are customized to your body’s nutritional preferences [1], your FitBit and your health records will be able to talk to your food manager application to design the perfect diet for you (given your targets and objectives). Furthermore, to make it easy for you, your applications will also autonomously communicate with your refrigerator and pantry (to monitor how much food you have available), your local grocery store, and your calendar app so that food deliveries will show up when and only when you need to be restocked. You’re amazed that you’re spending less on food, less of it is going to waste, and you never have to wonder what you’re going to make for dinner. Your local grocery store is also greatly rewarded, not only for your loyalty, but because it can anticipate the demand from you and everyone else in your community – and create specials, promotions, and service strategies that are targeted to your needs (rather than just what the store guesses you need).

Although parts of this example may seem futuristic, the technologies are already in place. What is missing is our ability to link the technologies together using development processes that are effective and efficient – and in particular, coordinating and engaging the people  who will help make it happen. This is a job for quality managers and others who study production and operations management

As the Internet of Things (IoT) and pervasive information become commonplace, the fundamental nature and character of how quality management principles are applied in practice will be forced to change. As Eric Schmidt, former Chairman of Google, explains:  “the new age of artificial intelligence is beginning, and it’s a big deal.” [2] Here are some ways that this shift will impact researchers and practitioners interested in quality:

  • Strategic deployment of IoT technologies will help us simultaneously improve our use of enterprise assets, reduce waste, promote sustainability, and coordinate people and machines to more effectively meet strategic goals and operational targets.
  • Smart materials, embedded in our production and service ecosystems, will change our views of objects from inert and passive to embedded and engaged. For example, MIT has developed a “smart band-aid” that communicates with a wound, provides visual indicators of the healing process, and delivers medication as needed. [3] Software developers will need to know how to make this communication seamless and reliable in a variety of operations contexts.
  • Our technologies will be able to proactively anticipate the Voice of the Customer, enabling us to meet not only their stated and implied needs, but also their emergent needs and hard-to-express desires. Similarly, will the nature of customer satisfaction change as IoT becomes more pervasive?
  • Cloud and IoT-driven Analytics will make more information available for powerful decision-making (e.g. real-time weather analytics), but comes with its own set of challenges: how to find the data, how to assess data quality, and how to select and store data with likely future value to decision makers. This will be particularly challenging since analytics has not been a historical focus among quality managers. [4]
  • Smart, demand-driven supply chains (and supply networks) will leverage Big Data, and engage in automated planning, automatic adjustment to changing conditions or supply chain disruptions like war or extreme weather events, and self-regulation.
  • Smart manufacturing systems will implement real time communication between people, machines, materials, factories and warehouses, supply chain partners, and logistics partners using cloud computing. Production systems will adapt to demand as well as environmental factors, like the availability of resources and components. Sustainability will be a required core capability of all organizations that produce goods.
  • Cognitive manufacturing will implement manufacturing and service systems capable of perception, judgment, and improving quality autonomously – without the delays associated with human decision-making or the detection of issues.
  • Cybersecurity will be recognized as a critical component of all of the above. For most (if not all) of these next generation products and production systems, quality will not be possible without addressing information security.
  • The nature of quality assurance will also change, since products will continue to learn (and not necessarily meet their own quality requirements) after purchase or acquisition, until the consumer has used them for a while. In a December 2015 article I wrote for Software Quality Professional, I ask “How long is the learning process for this technology, and have [product engineers] designed test cases to accommodate that process after the product has been released? The testing process cannot find closure until the end of the ‘burn-in’ period when systems have fully learned about their surroundings.” [5]
  • We will need new theories for software quality practice in an era where embedded artificial intelligence and technological panpsychism (autonomous objects with awareness, perception, and judgment) are the norm.

How do we design quality into a broad, adaptive, dynamically evolving ecosystem of people, materials, objects, and processes? This is the extraordinarily complex and multifaceted question that we, as a community of academics and practitioners, must together address.

Just starting out in quality? My advice is to get a technical degree (science, math, or engineering) which will provide you with a solid foundation for understanding the new modes of production that are on the horizon. Industrial engineering, operations research, industrial design, and mechanical engineering are great fits for someone who wants a career in quality, as are statistics, data science, manufacturing engineering, and telecommunications. Cybersecurity and intelligence will become increasingly more central to quality management, so these are also good directions to take. Or, consider applying for an interdisciplinary program like JMU’s Integrated Science and Technology where I teach. We’re developing a new 21-credit sector right now where you can study EVERYTHING in the list above! Also, certifications are a plus, but in addition to completing training programs be sure to get formally certified by a professional organization to make sure that your credentials are widely recognized (e.g. through ASQ and ATMAE).

 

References

[1] http://www.huffingtonpost.com/entry/no-one-size-fits-all-diet-plan_564d605de4b00b7997f94272
[2] https://www.washingtonpost.com/news/innovations/wp/2015/09/15/what-eric-schmidt-gets-right-and-wrong-about-the-future-of-artificial-intelligence/
[3] http://news.mit.edu/2015/stretchable-hydrogel-electronics-1207
[4] Evans, J. R. (2015). Modern Analytics and the Future of Quality and Performance Excellence. The Quality Management Journal22(4), 6.
[5] Radziwill, N. M., Benton, M. C., Boadu, K., & Perdomo, W., 2015: A Case-Based Look at Integrating Social Context into Software Quality. Software Quality Professional, December.

3 Steps to Creating an Innovative Performance Culture

Image Credit: Doug Buckley of http://hyperactive.to

Image Credit: Doug Buckley of http://hyperactive.to

Want to leapfrog over your competitors by designing an extremely high-performance culture for your organization? If so, I have the secret formula.

It starts here: in his August post to ASQ’s View From the Q blog, guest blogger James Lawther asks:

What are your DOs and DON’Ts of creating a performance culture?

Citing Deming and Drucker, and noting how so many organizations rely on a “carrots and sticks” approach to performance management, he converges on the following recommendation: “The way to create a high performance culture is to seek out poor performance, embrace it and fix it, not punish it.” I think, though, that this is not a new approach… rather than improving upon poor performance, why don’t we seek out truly amazing performance and then just make more of it? These three steps will help you do it:

  • Eliminate power relationships. Power is poison! It creates and cultivates fear (which, according to Deming, we need to drive out). Unfortunately, our educational system and our economy are firmly steeped in power relationships… so we’re not accustomed to truly cooperative relationships. (In fact, being reliant on the income from our jobs shoehorns us into power relationships before we even begin working.) Holacracy is one approach that some organizations are trying out, but there are many possibilities for shifting from organizational structures that are designed around power and control, versus those that are designed to stimulate interest, creativity, and true collaboration.
  • Create systems to help everyone find (and share) their unique skills, talents, and gifts. This is the key to both engagement and high performance — and this isn’t a one-shot deal. These skills, talents, and gifts are extremely dependent on the organizational context, the external environment, and a person’s current interests… and all of these change over time!
  • Create systems to help people become stewards of their own performance. Accenture and Google have both recently given up performance reviews… and Deming has always warned about them! Unless we’re managing our own performance, and the process and outcomes are meaningful to us individually, we’ll just be dragged down by another power relationship.

Quality professionals are great at designing and setting up systems to achieve performance goals! Now, we have an innovation challenge: adopt the new philosophy, design quality systems that substitute community in place of power and control, and use our sophisticated and capable information systems to give people agency over their own performance.

“Creative teamwork utterly depends on true communication and is thus very seriously hindered by the presence of power relationships. The open-source community, effectively free of such power relationships, is teaching us by contrast how dreadfully much they cost in bugs, in lowered productivity, and in lost opportunities.” — E. S. Raymond in The Cathedral and the Bazaar

A Chat with Jaime Casap, Google’s Chief Education Evangelist

jaime-casap-head

“The classroom of the future does not exist!”

That’s the word from Jaime Casap (@jcasap), Google’s Chief Education Evangelist — and a highly anticipated new Business Innovation Factory (BIF) storyteller for 2015.  In advance of the summit which takes place on September 16 and 17, Morgan and I had the opportunity to chat with Jaime about a form of business model innovation that’s close to our hearts – improving education. He’s a native New Yorker, so he’s naturally outspoken and direct. But his caring and considerate tone makes it clear he’s got everyone’s best interests at heart.

At Google, he’s the connector and boundary spanner… the guy the organization trusts to “predict the future” where education is concerned. He makes sure that the channels of communication are open between everyone working on education-related projects. Outside of Google, he advocates smart and innovative applications of technology in education that will open up educational opportunities for everyone.  Most recently, he visited the White House on this mission.

jaime-quote-image

The current system educational system is not broken, he says. It’s doing exactly what it was designed to do: prepare workers for a hierarchical, industrialized production economy. The problem is that the system cannot be high-performing because it’s not doing what we need it to for the upcoming decades, which requires leveraging the skills and capabilities of everyone.

He points out that low-income minorities now have a 9% chance of graduating from college… whereas a couple decades ago, they had a 6% chance. This startling statistic reflects an underlying deficiency in how education is designed and delivered in this country today.

So how do we fix it?

“Technology gives us the ability to question everything,” he says.  As we shift to performance-based assessments, we can create educational experiences that are practical, iterative, and focused on continuous improvement — where we measure iteration, innovation, and sustained incremental progress.

Measuring these, he says, will be a lot more interesting than what we tend to measure now: whether a learner gets something right the first time — or how long it took for a competency to emerge. From this new perspective, we’ll finally be able to answer questions like: What is an excellent school? What does a high-performing educational system look (and feel) like?

Jaime’s opportunity-driven vision for inclusiveness  is an integral part of Google’s future. And you can hear more about his personal story and how it shaped this vision next month at BIF.

If you haven’t made plans already to hear Jaime and the other storytellers at BIF, there may be a few tickets left — but this event always sells out! Check the BIF registration page and share a memorable experience with the BIF community this year: http://www.businessinnovationfactory.com/summit/register

Who Has Inspired You About Quality?

eisensteinIn his January post, ASQ CEO Bill Troy asks, “Have you met someone whose teachings on quality influenced you or inspired you? What were these lessons?” Although he acknowledges the “quality gurus” he encouraged us to think about people from beyond the domain of the quality profession. When I think about quality, I always start with my favorite definition to provide an anchor. According to this definition, quality is:

“The totality of characteristics of an entity that bear upon its ability to satisfy stated and implied needs.” — ISO 9001 (para 3.1.5)

Even though they do not specifically teach about quality, I’d like to share two of my sources of inspiration: philosopher and activist Charles Eisenstein, and psychologist Barbara Fredrickson.

In Sacred Economics and The More Beautiful World Our Hearts Know is Possible, Charles Eisenstein encourages us to look beyond the subtle assumptions and limitations imposed upon us by being embedded in a market economy. What is quality in the absence of a commercial environment to exchange products and services?? How can we more effectively relate to ourselves and to one another, so that we can better satisfy our stated and implied needs? Eisenstein’s work inspires me because it encourages me to reflect on the unspoken assumptions of the quality profession, and how those assumptions might be holding us back from evolving our skill sets to meet the changing needs of society. (Sacred Economics is also available in print from Amazon.)

In Positivity, Barbara Fredrickson provides a simple, data-driven path (the “positivity ratio”) for improving our psychological health; in Love 2.0, she helps uncover ways for us to create substantive, authentic connections with one another. Her work can help us cultivate greater quality consciousness – because we are best able to satisfy others’ stated and implied needs when 1) we understand them, and 2) we are mentally and emotionally equipped to help deliver them! Although aspects of the positivity ratio have been criticized by researchers studying dynamical systems, I still find the concept (and measurement tool) very useful for raising the awareness of individuals and teams.

Postscript: Bill’s post made me think about another related question: “Who ARE the quality gurus?” I mean, everyone in the quality profession can call on Deming, Juran, or Crosby, but I’d toss luminaries like Csikszentmihalyi and Prahalad (plus others) in the mix as well. I searched online and found a nice “List of Gurus” that someone put together that includes my extra picks! But!! There’s a problem with it. WHERE ARE THE WOMEN? The one woman in this list is someone I’ve never heard of, which is odd, since I’ve read papers by (or about!) all of the other people referenced in the list. Which brings me back to my original point: WHERE ARE THE WOMEN QUALITY GURUS? It’s time to start celebrating their emerging legacy. If you are a woman who has made significant contributions to our understanding and/or practice of quality and improvement, PLEASE CONTACT ME. I’d like to write an article soon.

The Future of Quality is Revolutionary

Image Credit: Dave Herod Photography (c) 2014

Image Credit: Dave Herod Photography (c) 2014

In his August post, ASQ CEO Bill Troy asks “Is the future of quality evolutionary or revolutionary?

My answer is unequivocal: it’s revolutionary. We’re going to need new models for business, new models for education, and new models for living if we are to satisfy the stated and implied needs of an increasingly interconnected Internet of people and things, where the need for sustainability will (in many cases) trump the desire for growth.

“Quality is the totality of characteristics of an entity that bear upon its ability to satisfy stated and implied needs.” — ISO 9000, para 3.1.5

New models, however, aren’t always necessary. We can continuously improve elements of old models to increase quality, and the need for this won’t disappear. The future of quality includes evolutionary advancements, but won’t be defined by it, as we emerge into new collective paradigms for management. We’ve already experienced this once (in the late 1980’s and 1990’s), and we’re about to feel the reverberations of another shift.

A Harvard Business Review blog post from July 30 (“Management’s Three Eras: A Brief History”) explains why. The first two eras that we’ve had experience with are organization as machine (the era of Taylorism), and organization as knowledge and knowledge flows (as popularized by people like Peter Senge and Tom Davenport). Methods for establishing and improving quality have been defined, refined, and flourished in these two eras.

But the third and emerging era, according to this article, is the age of empathyorganization as a vehicle for creating complete and meaningful experiences:

“Today, we are in the midst of another fundamental rethinking of what organizations are and for what purpose they exist. If organizations existed in the execution era to create scale and in the expertise era to provide advanced services, today many are looking to organizations to create complete and meaningful experiences. I would argue that management has entered a new era of empathy.”

Although we have some available approaches for quality improvement in this kind of era, they are incomplete: Voice of the Customer tools, for example, may make our experiences with products and services efficient, effective, and satisfying — but possibly neither complete or meaningful. How do we, for example, create mechanisms to assess and improve quality in the sharing economy? In decommodified environments? In our own personal lives?

What do you think? Share your ideas in the comments.

Is the Manufacturing Outlook Sufficiently Far-Reaching?

view-from-qIn his January post, ASQ CEO Paul Borawski discusses the results from ASQ’s 2013 manufacturing outlook survey. Although the majority of manufacturers reported revenue growth in 2013, many are still very concerned about the state of the economy. Paul was inquiring whether this “optimistic but guarded” perspective was a good assessment, and asked for examples from manufacturers that might shed some more light on the situation.

I’ve alluded over Twitter that my relationship with quality – as a concept – has been changing over the past few months. That’s the main reason that I haven’t been posting as frequently on this blog… I’m trying to sort out my feelings. (It’s almost like what happens when you’ve been in a relationship for years, but then gradually discover that you’ve changed, and the relationship is no longer meeting your deepest needs.)

Paul’s January post has helped me clarify some of these feelings.

If we focus on revenue growth as a measure of “the health of manufacturing”, we’re all missing the point. Current trends in production indicate that the locus of power is increasingly shifting from large manufacturing companies to individuals and small groups. Examples such as the Maker movement, the success of online platforms like Etsy to support craftspeople, and the increasing availability of new technologies like 3D printing at reasonable costs are shifting the environmental dynamism of what has traditionally been a slowly evolving arena:

“with the Maker movement we will be increasingly surprised at what seemed small and local and small‑scale, now will continue to grow…”  —http://techonomy.com/conf/13-detroit/the-new-techonomy/can-the-maker-movement-re-make-america/

I was reminded of Clayton Christensen’s landmark 1997 book, The Innovator’s Dilemma. By successfully satisfying current needs, we are potentially blinded to the ability to satisfy future needs. We are so accustomed to the model of manufacturing working so well, over so many decades, that we may fail to recognize when the centralized approach is losing ground.

How are manufacturers addressing these shifts? Are they re-examining the core assumptions upon which their industries are based? I think this should be the focus, rather than continued revenue growth and “concern” about the state of the economy.

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