Sunday, August 07, 2011

Quality Questions

My Sunday Seth:

Defining quality

Given how much we talk about it, it's surprising that there's a lot of confusion about what quality is.

What's a higher quality car: a one-year old Honda Civic or a brand new top of the line Bentley?

It turns out that there are at least two useful ways to describe quality, and the conflict between them leads to the confusion...

Quality of design: Thoughtfulness and processes that lead to user delight, that make it likely that someone will seek out a product, pay extra for it or tell a friend.

Quality of manufacture: Removing any variation in tolerances that a user will notice or care about.

In the case of the Civic, the quality of manufacture is clearly higher by any measure. The manufacturing is more exact, the likelihood that the car will perform (or not perform) in a way you don't expect is tiny.

On the other hand, we can probably agree that the design of the Bentley is more bespoke, luxurious and worthy of comment.

Let's think about manufacturing variation for a second: Fedex promises overnight delivery. 10:20 vs 10:15 is not something the recipient cares about. Tomorrow vs. Thursday, they care about a lot. The goal of the manufacturing process isn't to reach the perfection of infinity. It's to drive tolerances so hard that the consumer doesn't care about the variation. Spending an extra million dollars to get five minutes faster isn't as important to the Fedex brand as spending a million dollars to make the website delightful.

Dropbox is a company that got both right. The design of the service is so useful it now seems obvious. At the same time, though, and most critically, the manufacture of the service is to a very high tolerance. Great design in a backup service would be useless if one in a thousand files were corrupted.

Microsoft struggles (when they struggle) because sometimes they get both wrong. Software that has a user interface that's a pain to use rarely leads to delight, and bugs represent significant manufacturing defects, because sometimes (usually just before a presentation), the software doesn't work as expected--a noticed variation.

The Shake Shack, many New York burger fans would argue, is a higher quality fast food experience than McDonald's, as evidenced by lines out the door and higher prices. Except from a production point of view. The factory that is McDonald's far outperforms the small chain in terms of efficient production of the designed goods within certain tolerances. It's faster and more reliable. And yet, many people choose to pay extra to eat at Shake Shack. Because it's "better." Faster doesn't matter as much to the Shake Shack customer.

The balance, then, is to understand that marketers want both. A short-sighted CFO might want neither.

Deming defined quality as: (result of work effort)/(total costs). Unless you understand both parts of that fraction, you'll have a hard time allocating your resources.

Consider what Phillip Crosby realized a generation ago: Quality is free.

It's cheaper to design marketing quality into the product than it is to advertise the product.

It's cheaper to design manufacturing quality into a factory than it is to inspect it in after the product has already been built.

These go hand in hand. Don't tell me about server uptime if your interface is lame or the attitude of the people answering the phone is obnoxious. Don't promise me a brilliant new service if you're unable to show up for the meeting. Don't show me a boring manuscript with no typos in it, and don't try to sell me a brilliant book so filled with errors that I'm too distracted to finish it.

There are two reasons that quality of manufacture is diminishing in importance as a competitive tool:

a. incremental advances in this sort of quality get increasingly more expensive. Going from one defect in a thousand to one in a million is relatively cheap. Going from one in a million to one in a billion, though, costs a fortune.

b. As manufacturing skills increase (and information about them is exchanged) it means that your competition has as much ability to manufacture with quality as you do.

On the other hand, quality of design remains a fast-moving, judgment-based process where supremacy is hard to reach and harder to maintain.

And yet organizations often focus obsessively on manufacturing quality. Easier to describe, easier to measure, easier to take on as a group. It's essential, it's just not as important as it used to be.

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