Which quality management strategy would you rather emulate: Apple’s, one of the world’s most valuable companies, or GE’s, which continues to sell off its business units striving to return to its pre-recession peak?
The clear answer is Apple. But to understand and learn from Apple’s successful strategy (and avoid GE’s pitfalls), you have to understand these companies different approaches to quality management.
What’s the Difference? Big Q vs. “little q”
Since the mid 1990’s, many companies including GE approached quality management tactically (“little q” thinking), focusing on controlling the consistency of output. Popularized in forms such as Six Sigma, companies that follow the “little q” approach seek to identify and remove the causes of defects and minimize variability in manufacturing and business processes.
While this approach is straightforward, and is credited with GE’s increase in operating margins in the late 1990’s, its gains were short-lived. GE’s performance declined sharply during the financial crisis of 2007 and has never fully recovered.
In contrast, the Big Q approach to quality management seeks to deliver what the customer wants and to exceed expectations. As Forbes’ Steven Denning observed, “It's the difference between tactical quality management and strategic quality management.”
Customer centricity is a hallmark of many of today’s most successful companies, including Apple, Amazon, and Salesforce.com. This value is reflected in their Big Q approach to quality, which has resulted in significantly stronger business performance.
“The financial difference between the pursuit of “little q” and Big Q is significant,” Denning reported. “When a firm is able to improve quality in the sense of exceeding the customer’s expectations, then very much larger and more lasting gains become possible.”
A Big Q approach elevates quality beyond just focusing on operations or production processes to improve all aspects of the organization. Why? Because from this perspective you will find the root causes of many of product and service related problems. This is commonly known as the Pareto Principle (or the 80/20 rule) coined by our founder Dr. Joseph M. Juran.
How Successful Companies Implement Big Q Thinking
Dr. Juran argued that a different kind of management focus is required to realize the potential of Big Q thinking.
In our co-authored Juran Quality Handbook, we make the point that quality superiority can “often be translated into higher share of market, but it requires a special effort to do so. The superior quality must be clearly based on the customer needs and the benefits the customer is seeking. If the quality superiority is defined only in terms of the company’s internal standards, the customer may not perceive the value. Patients may be willing to pay the extra cost of a trip to the Mayo clinic in the United States rather than visit a local practice because they perceive the superior clinical outcomes available at the Mayo Clinic.”
The Handbook identifies five key shifts required to consistently exceed customer expectations.
- The entire organization’s principal goal must be to delight the customer.
- Leaders must establish management policies and practices to empower staff to fulfill this goal.
- The role of managers needs to shift from controller to enabler.
- Work coordination should be achieved through dynamic linking versus bureaucratic processes.
- Values must supersede economic value, and top-down commands replaced with adult-to-adult conversations.
Big Q Applied to Our Digital Age
As we have seen, the Big Q movement is not new. For almost 30 years many organizations have employed this concept and moved quality management from the production floor to the board room, making quality everyone’s responsibility.
While expanding quality beyond the product dimension is a positive development, it comes with its own set of new challenges. Today these challenges are being managed more efficiently because of new technologies such as Operational APPs, QMS software, Artificial Intelligence and so on.
These new technologies are long overdue, and with technology advancements the role and skills needed for the quality management function are changing.
Historically quality departments were made up of technical experts in statistical process control, quality systems, supplier quality and the like. Increasingly the skills needed to be successful in quality have shifted. Big Q professionals need to be “big picture” business focused, not just manage production defects. They will need to know customer demand and their needs and be able to define critical to business and quality characteristics in all key functions and processes.
This larger focus is creating a new type of quality professional. One that can manage big data, use APPs in real time to maintain control of processes; use scorecards from new QMS software to drive corrective actions; all from wherever they are - which may not be anywhere near the process being measured.
Juran Inc. has researched the skills needed to be effective quality professionals in today’s workplaces, as well as testing those skills. In the next decade the ‘core’ skills of understanding quality tools, systems, procedures and work instructions will no longer apply. New skills, new departments and new ways of managing quality will replace all the traditional systems. Think big – Big Q= BIG ROI.
Hear more from Dr. Joseph A. DeFeo and other quality experts at the Veeva Quality Summit on June 5th 2018 in Cincinnati, OH. Spots are limited for this complimentary 1-day educational event, so register today.