A Systems Thinking approach to deliver 

Innovation and Quality

I've analyzed more than 30 organizations and 300 processes to understand how they respond to the need for ever increasing innovation and quality in their products/services and we benchmarked the results of those approaches.  By mapping the innovation scores against the quality scores for those organizations we see patterns and trends in how some organizations systematically improve their capability.  One of the most striking themes is that high scoring organizations tend to use a Systems Thinking approach and do not differentiate between innovation and quality. 

“Systems thinking is a framework for seeing interrelationships rather than things, for seeing patterns rather than static snapshots. It is a set of general principles spanning fields as diverse as physical and social sciences, engineering and management”. (Peter Senge , The Fifth Discipline)

Systems Thinking is a holistic way of dealing with complexity, uncertainty, risk and opportunity and has been applied over the past few decades to understand a wide range of systems.   We found that organizations that exploit this approach apply some key best practices.

Organizations that use a Systems Thinking approach to deliver innovation and quality tend to:

•   Decide what to do (and why) by first capturing and understanding what is really important to their customers.  They use tools/methods already well known, i.e., Kano, QFD, but they rely mostly on actual conversations with their key customers.  While this may sound obvious and easy we have found this to be one of the most significant gaps between organizations that use a Systems Thinking approach and those that do not.

•   Bring their solutions to life by planning, designing and commercializing new products and services using a fact-based, problem-solving methodology such as Six Sigma DMAIC or DFSS.  Using such approaches to drive quality improvement is well understood, but applying the same structured logic toward driving innovation may seem strange.  High scoring organizations tend to think of solving a problem as being similar to grasping a new opportunity. To them the similarity between improving quality and generating innovation is clear.  Bell Labs realized this years ago as they used same approach to quality improvement as they did to assess innovation opportunities. (Juran Institute’s ‘Quality IMPRO 99’, “Innovation and Quality at Bell Labs”, Bill Robinson)

•   Make sure their solutions work for their customers by setting stretch goals and clear measures toward meeting those expectations. They establish long-term performance goals for customer-valued quality and innovation and regularly measure and assess performance against those key areas.

•   Decide what's next by  building a scoreboard for all to see their progress  and constantly optimize ways of communicating with customers.

Innovation or Quality?

Several months ago I was asked to give a Keynote address at a conference sponsored by a Fortune 500 company that designs complex technology and systems for customers around the world.  They specifically asked me to talk about Systems Architecture Design Tradeoffs.  The title they proposed for my talk was “Innovation or Quality”.

My first reaction was to say “thanks, but I can’t give that talk”.  The notion that one had to choose between innovation or quality was 180 degrees counter with what I believe.  I decided, though, that this was an opportunity to initiate a conversation on the dilemma of Innovation vs. Quality.  After many years of working in industry, consulting and teaching I’ve come to realize that, while the belief that quality is the enemy of innovation (or at least tends to ‘stifle’ it) is not ubiquitous it is also not uncommon.

To my surprise, instead of booing me off the stage when I announced that I changed the title of the talk to Innovation and Quality, there was a strong positive reaction from the audience.  Individually they were telling me that they ‘get it’, even though organizationally they seemed not to.

Driving back home after the conference I started to wonder how the notion of “Innovation or Quality” came to be in the first place.

As a systems designer (for more years than I care to admit) I understand that decisions need to made to choose, i.e., trade off, between features that may otherwise appear to be relatively equal in importance.  I know that if I decide to include extra hardware to add redundancy that will increase the reliability of the system that I will pay a penalty by trading off precious system size, weight and power.  I better be very careful in making a decision like that and prioritize the impacts it will have on the customer.  The perceived tension between quality and innovation is a fundamental dilemma that is significantly different, though. 

It would be a rare company that considered the quality of its products or services not to be very important.   On the other hand, conventional wisdom seems to perceive that a focus on quality is in direct conflict with the speed, creativity and cost efficiency required to produce true innovation.  Too much emphasis on improving quality, many believe, will result in the proverbial ‘world-class buggy whip’.

In contrast, without a sharp focus on providing new products and services that are truly ‘fit for use’ customers may perceive the intended innovation as junk.  It’s ‘cool’, but it doesn’t work.

If Innovation and Quality are the proverbial two sides of the same coin, how do we keep of them in synch, or at least balanced, while the world continually demands more functionality/complexity in the products we use? 

It’s easy to see the results of the explosion of technological innovation that has taken place over the last few decades.   The history of one ubiquitous invention is interesting to observe from this perspective. Since the transistor was invented 60 years ago a constant flow of hundreds of thousands of additional inventions and innovations have resulted in continuous improvements to the transistor to the point where Intel co-founder Gordon Moore observed in his now famous Moore’s Law that innovation will continue such that “the number of transistors on a chip will double approximately every two years”.

The trend that’s reflected in Moore’s law can also be clearly seen in the systems we develop.   Only a few years ago, as an example, there was no software in automobiles.  Today, the typical late model automobile incorporates about 10 million lines of code. Even the latest John Deere tractor “has more lines of software code than a Space Shuttle”.

How, then, can we keep quality at a level that’s commensurate with the increase in functionality that is occurring constantly? Does our Capability to Scale Quality equal our Capability to Scale Functionality? What is the Quality equivalent to Moore’s Law?

While there is also a constant flow of improvements to how innovations are developed, e.g., mico- and nano- technology, Agile development, Model-based design, Open-source, Open-innovation, there hasn’t been significant (and certainly not fundamental) improvement to how we ensure the level of quality needed is achieved.

The good news is that, while innovation and quality may appear to be at best orthogonal, they have more in common than just important attributes of customer expectations.  This can be observed and exploited using a Systems Thinking approach.