In my post “Ensuring High Quality Outcomes”, I discussed the importance of repeatable managed process as it applies to producing high quality outcomes. In this post, I discuss the issues associated with the implementation of a quality program. I am going to start off talking about how business/product strategies might affect quality and then will close with some thoughts on how to decide whether the benefits of compromising on quality are worth the costs.
When making decisions related to actions which mitigate against quality, there are three questions you have to ask:
- Where is your business in terms of its lifecycle? Some companies that are just starting out can justify delivering less than perfect product. They need to get product to market (to bring in revenue) and less than perfect quality will not likely have long term negative effects on the brand. I am sure that both Facebook and Google launched their products with significant defects, but ones that didn’t “show”—too badly.
Other companies might not be afforded the same latitude. Textura’s payment application (CPM) had to be right from the start. Defects, which caused issues with payments, could not be tolerated and early issues (where payments went wrong) would have doomed the product. That doesn’t mean that CPM was born fully formed. We clearly prioritized the inclusion of functions and took several years to develop a product that was capable of being fairly characterized as complete.
- Is the benefit gained worth the impact of reduced quality on your brand and how your customers and competitors view you? In some cases, the bar gets raised and those that “don’t get it” lose brand value. This happened to the U.S. car industry in the late 20th century when Japanese competitors changed the game related to the quality of the products they were delivering. The U.S. car industry took a long time to respond and one might argue still suffers from a reputation as not having the same quality as their Japanese competition even though there is abundant evidence that they do.
Interestingly, the Germans (with the advent of Lexus and Infinity) and the Italians (with the introduction of the original Acura NSX) didn’t make the same mistake as the US car industry. They clearly saw the challenge and improved their offerings, successfully (both in terms of recognizing the challenge and addressing it) containing the competitive challenge. In both these cases, one can see that quality can have a profound effect on the perception and value of a brand; and
- Finally, we get back to the question I posed at the beginning of my previous post: “Have you ever wondered how UPS can deliver over 19 million packages a day and delivers 99% of them on-time?” Remember I followed that with commentary about their rigid adherence (even in the face of requests from good customers) to their process. There is a line of thought that suggests that there is a tension between being able to “serve the customer” and deliver quality product/service. Customer relationship managers (based on requests from their clients) will often push for actions from product development or operations which require them to diverge from their “process”. In the short term, this may seem like a good idea, but deviation from the process compromises quality and may jeopardize the client relationship in other ways.
So, organizations that want to deliver quality products and services need to account for the customer service strategy when developing both the processes around the development and delivery of product/service and the approach the customer service organization takes in engaging/delighting the customer.
Doing this successfully requires building organizations and processes (and being willing to spend the requisite money) to achieve both the desired level of customer responsiveness and product/service quality. Given limited resources getting this right can be a difficult and potentially damaging (organizationally, quality-wise, and to customer relationships) that is well worth a serious investment.
The folks at UPS clearly made the decision that, overall, they are better off being inflexible and delivering on-time than “saying yes” to the customer and damaging their brand which is largely defined by their ability to get packages from point A to point B reliably.
I close this post by asking you to consider an important question: How important is quality to your achieving your goals? Some of you might remember an oblique comment that I made in my last post, but did not follow up on: “I was pretty sure that non-stop computing was not really what we needed, and it would have been prohibitively expensive.” It turns out that we did not have to achieve a “non-stop” level of service. We found that our customers were quite satisfied with something less than 5-nines reliability. So, it isn’t just a question of quality or no quality, but rather what level of quality.
In another example, when I was at Textura, we looked seriously at outsourcing our infrastructure to one of several vendors. None of them were able to provide 5-nines reliability. Most of the vendors were willing to provide 98% uptime (which is about 175 hours of downtime in a year) level of service, but for some of our offerings (like payment management) 5-nines (which translates to 5 minutes of downtime per year) were necessary. So, some of our less time critical applications moved to the outsourced services, while the time critical services stayed in-house. I would note, that while vendors were quoting 98% availability, in most cases the performance far exceeded the service level guarantee.
So, there is both a science and an art (really business judgement) to quality management. Quality is not a binary trait. Looking at the context is critical to getting it right.
Copyright 2017 Howard Niden
— you can find this (days earlier) and other posts at www.niden.com
and if you like this post: 1) please let me know; and 2) pass on your “find” to others.