On Relative and Absolute Quality

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I sometimes struggle between relative and absolute quality, and how they affect the way we work in businesses and the success we gain. That is, I really would like to think we should strive for better outcomes as a kind of value on its own (and merit from that as business success), but I so much more see “being better than competition” as “sufficient” for most people (and frankly, it is good enough for many companies to stay in business).

In practice, the questions boils down to “we’re already better than our competition, why over-invest?” The way I hear that is “let’s cash in on our advantage now, until we lose it”. I also hear “let’s gain in short term, and figure out long-term competitiveness later”. And I can see the logic in that. But it’s the same logic that has effectively crippled so many companies and destroyed their long term profitability.

I recall reading somewhere that the founder of Ikea, Ingvar Kamprad, once said that “the worst thing that could happen to Ikea would be to go public.” He was referring to the tendency of publicly traded companies to focus on short term outcomes and shareholder value over any other business priorities. While I’m no fan of Ikea, I can appreciate the success they have built (and yea, some few of the items they have designed have appealed also to me). And I can appreciate the mindset.

So is focusing on relative quality subscribing to short term thinking (and, as I believe, to sacrificing long term success)? The idealist in me says yes; the pragmatist accepts it as a short term goal as long as it is recognized for what it is.

So what would absolute quality look like in, say, subcontracting business? How would a company striving for absolute quality approach their goal differently from a company that is satisfied being just better than direct competition?

I’ve tried to give this some thought. I’ve so far identified the following dimensions:

  • Excelling in delivering customer value, exceeding customer expectations
  • Seeking to continually improve their development practices, to deliver error free solutions on the first go and remove all types of waste in the way they develop
  • Seeking to build their people to be self-driven, capable of taking initiative, and having satisfying professional growth
  • Looking inside to compare themselves to their past selves, instead of looking out to compare to others

Curiously, the first three loosely match the three characteristics of Radical Management – delighting customers, deep job satisfaction, and relentless improvement. The last one relates to one of the key characteristics of Performing teams – dedication to not accept sub-par performance from oneselves or team mates.

I’ll try to explore each of those dimensions to share what I feel about them. I’ve added some concrete ideas at the end of each dimension.

Excelling in delivering customer value to me is to seek the real value the customer _really_ needs, rather than seeking to deliver what the customer believes they want. It is not saying “well, you don’t know what you want, let me show you” but recognition that we (that is, both the customer and us) don’t have the possibility of defining “maximal” value up front. Only through successive iteration and revision of our understanding we are capable of finding what is really the most valuable bit, and then focusing on delivering that as effectively as it can be done. It is also recognizing that we may often have to challenged establish “truths” to discover new avenues for innovative solutions. The company doing the above is challenging established practices in IT subcontracting industry, and will have to build demand (and appreciation) for their approach. They will not be asked for it, they have to find the way to do it first within the constraints of current business practices.

  • Implement “Money for Nothing, Change for Free” in all customer contracts, and help customers to actually take advantage of it, even if they didn’t ask for it originally.
  • Seek to understand what the customer really wants by demonstrating progress continually and asking for feedback, then feed this back to customer’s decision-making processes for action
  • Teach customers of the benefits of iterative and incremental approaches, what is the value to _them_.

Continually seeking to improve the development practices involves all levels of their operation, starting from the technical practices, to project leadership, organizational management, and internal operation. Internally, they should be challenging themselves continually, seeking impediments to delivery at all levels, and relentlessly seeking to eradicate them. And to understand that this all is normal operation of the organization, and not an “improvement initiative”.

  • Deploy full-time ScrumMasters to all teams and at different levels of the organization
  • Use “technical excellence programs” to keep people learning better ways all the time, e.g. through internal coaching
  • Use metrics that reveal waste and bad quality, and feed the results back directly to teams and individuals
  • Encourage people to learn outside their typical domain
  • Build careers around technical excellence, so that we don’t lose more great developers to ranks of bad managers

I believe that people excel only when given sufficient authority to do a great job. There are examples of organizations that have done exactly that, and their people have delivered outstanding outcomes. A necessary condition is access to information. To really drive self-organization into the organization, information must be made easily accessible (and pushed) to everyone in the organization. Doesn’t matter who. And this is a challenge, for sure. Not just overcoming the culture of “information on a need-to-know basis”, but also providing that information in a way that is digestible and creating the skills to using that info for everyone. Only then can we start expecting people to make good system-wide decisions about their work and take real ownership of it.

  • People are trusted and external post-decision authorization is kept to a minimum
  • Teams know their P&L, but also that of their neighboring teams and groups at different levels
  • Progress is made clearly visible to everyone interested, through demos and clear communication approaches
  • People are held accountable for their decisions and must personally justify them when challenged – people are taught how to evaluate the value of their idea before committing and also recommended to verify those with colleagues

The desire to look within rather than compare to outside is important to maintain momentum. Any company doing that will realize that improvement is never-ending and that there are always ways to get better. But if we compare to outside parties, it’s easy to get satisfied with the results and become complacent. That doesn’t naturally mean that we forget the outside world, but only that our primary competitor is ourselves.

  • Maintain metrics showing improvement in operation, but try to make sure the metric is open-ended and doesn’t have a “cap”, if possible.
  • Measure the amount of improvements in the organization and have warning levels when they go too low
  • Continually allocate attention to the need of getting better, celebrate successes

To summarize, if I look around at many of the successful companies (e.g. Toyota, Apple…), I see these ideas, at least in many ways, being deployed. Excellence cannot be achieved by being satisfied with good. We should celebrate when we progress, but never satisfy ourselves with it.

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