Quality 2.0: The Evolution of Quality Assurance in Modern Business

And need we anyone, Phaedrus, tell us that which is good from that which is not good?

Plato, The Phaedrus Dialogues, circa 370 BC

Quality has been around as long as mankind. Humans seem to have an innate sense of when something is done right. We can look at a thing that we’ve never seen before and know when it is good. Or not good.

Modern quality is a newer creation. I would put its beginning at the late 18 th century. In 1798 Eli Whitney was awarded a contract by the United States government to produce muskets whose parts were interchangeable. This meant that a good musket could no longer be determined by looking only at the musket. Indeed, the musket might be fully functional and flawless, yet be deemed poor quality because it’s parts could not be replaced. This new definition of quality as conformance to a specified set of abstract requirements took us from the realm of Platonic ideal planes to something more akin to Aristotle’s realism. Quality 1.0 had arrived.

The mission of Quality 1.0 is conformance to functional customer requirements.

To be sure, Quality 1.0 evolved. But the quality mission remained fundamentally the same. At most, the changes between 1798 and 1985 were revisions that helped accomplish this basic mission.

• Quality 1.1-SPC
• Quality 1.2-Statistical Quality Control/Acceptance Sampling
• Quality 1.3-Quality Assurance
• Quality 1.4-Total Quality Control
• Quality 1.5-Total Quality Management

Quality 2.0

Quality 1.0 has had its problems. For one thing, it left out other major stakeholders. Quality 1.0 advocates trumpeted “The Customer Is King!” But what about investors? Employees? Society? Requiring quality champions to obsess on customers to the exclusion of other stakeholders put them out on a limb. William E. Conway, an early Deming disciple in the United States, lost his job as Nashua Corporation when he delayed release of an important new product so reliability could be improved. The delay impacted revenues and threatened Nashua’s financial solvency in the short term. Nashua’s Board of Directors, who represented stockholders and just happened to be Bill Conway’s boss, decided replace him with someone who would take quick action. To be sure, Conway’s methods benefited Nashua in the long term, but that was probably of little comfort to Mr. Conway.

Quality 2.0 is the first major revision of the quality mission in over 200 years. Many of its elements have been around for a while, but until Quality 2.0 they weren’t fully defined.

Stakeholder focus

Quality is still about conformance to requirements. But instead of being focused solely on functional requirements derived from customers, it looks at all stakeholder requirements simultaneously. Quality 2.0 seeks to operationally define a harmony of stakeholder interests. The organization’s major stakeholders—all of them—must be the beneficiaries of the organization’s activities. I consider the principle of mutual gain to be a fundamental principle of free markets. There should be no losers in a commercial association.

Loss to Society

Genichi Taguchi defined quality as the loss to society. Taguchi’s loss functions were an attempt to capture and measure these losses as they related to deviations from the ideal customer requirement. Quality 2.0 needs to generalize Taguchi’s ideas to include deviations from the ideal for all stakeholders. Also, Taguchi believed that all losses would find their way back to the originating organization. Quality 2.0 practitioners need to develop ways to measure these losses in terms that are unambiguous and meaningful to the organization’s leaders.

Business Ethics

Quality 1.0 assures that customer requirements are obtained and translated into internal performance specifications. In other words, quality provides an interface between people who are outside the organization, customers and suppliers, and the people inside the organization. Quality 2.0 extends this principle. Stakeholders should not benefit at the cost of unacceptable costs to others. All organizations produce both benefits and costs. Automobiles provide convenience to customers, jobs to employees, profits to investors, losses due to accidents, pollution, junk, etc. The organization can minimize the costs to society, but it can never eliminate them. It is up to society to decide how to deal with the remaining losses. For example, through the courts or through legislative actions.

Quality’s new mission

At this point we can now define a new mission for Quality:

The mission of the quality function is to provide information to leaders so they can assure that an organization’s outcomes conform to stakeholder requirements and loss to society is minimized.

This new mission is radically different than the old, Quality 1.0 mission. Quality must grow into this new role since, at present, it concerns itself almost entirely with the customer’s requirements. The new mission will require new tools, skills, and perspectives.

Beyond Conformance to Customer Requirements

The Kano model lists three different types of quality characteristics. Basic quality characteristics are things the customer doesn’t even think about when making a buying decision. These are “deal breakers” if they’re not there. For example, I once almost purchased a truck but decided not to when I learned that the bumpers were not included in the price. We also assume that the product will not be defective. Expected quality characteristics are another type. These are things that customers think about and want more of. For example, we want a car with power and fuel efficiency. If we can find a car with more of both fuel economy and power, we prefer it over another car with less of each.

Quality 1.0 is all about these two types of quality as applied to customer judgments. Quality 2.0 adds a major focus on a third type of quality characteristic, delighter quality. These are quality characteristics that surprise customers in a good way. Quality 2.0 operationalizes delighter quality with metrics and requirements. But it doesn’t stop there. Quality 2.0 also looks at all three types of quality applied to investors and employees.

More to Come

Quality 2.0 is much more than this. I will present more in future posts.

[1] Pyzdek, Thomas (1992). Pyzdek’s Guide to SPC Volume Two–Applications and Special Topics. Quality America , Tucson , Arizona , 100-101.