Know Your Future
Spotting trends help organizations gain an edge
by R. Dan Reid
The future is a subject of great interest to quality practitioners. Every three years, ASQ compiles its Future of Quality Study—the most recent of which was published in October—to determine trends that will make an impact on the industry. On the heels of the most recent study, let’s consider other sources and look for initiatives that may be right around the corner.
Scientist Alan Kay said, "The best way to predict the future is to invent it."1 Armed with the right information, you should be able to get a head start. That’s an important edge to have because, as billionaire James Goldsmith said, "If you see a bandwagon, it’s too late."2
A decade of difference
In July, the U.S. Food and Drug Administration (FDA) issued a special report called "Pathway to Global Product Safety and Quality." In it, the agency concluded that in 10 years, the world will be very different than it is today as a result of five macro trends affecting global commerce and our daily lives:
- Great rebalancing. There is a fundamental, long-term economic rebalancing that will likely leave traditional Western economies with a lower share of gross domestic product (GDP) in 2050 than they had in 1700. China and India are seeing labor productivity grow at more than five times the rate of most Western countries.
- The productivity imperative. Emerging markets are enjoying a virtuous growth cycle propelled by larger and younger workforces. In the developed world, low birth rates and graying workforces will make it difficult to maintain the lifestyle to which they’ve become accustomed. Their best hope for keeping the wealth creation engine going is by improving productivity.
- The global grid. The FDA report says, "Money, goods, data and people now cross borders in huge volumes and at unprecedented velocity. Since 1990, trade flows have grown 1.5 times faster than global GDP."3
- Pricing the planet. The report also says, "The tension between rapidly rising resource consumption and environmental sustainability is sure to prove one of the next decade’s critical pressure points. Natural resources and commodities account for roughly 10% of global GDP."4
- Government and the marketplace. The FDA predicts the government’s role in the marketplace will continue to grow, and regulators will continue to raise standards.
In June, the Conference Board issued a report titled, "Answering the 2011 CEO Challenge: Accelerating Growth through Quality." In the report, CEOs cited "business growth as their number one challenge, and see new innovations and markets as key strategies to produce that growth."
They added that "the quality function is uniquely positioned to accelerate growth through better execution and alignment."5 But more on that later.
The importance of innovation
A 2010 McKinsey Global survey adds to these CEO findings, indicating that "84% of executives say innovation is extremely or very important to their companies’ growth strategy." It goes on to say that "most executives believe that innovation is complex and involves a certain level of ambiguity. In fact, there is a general perception that a ‘process for innovation’ is an oxymoron."6
There’s a lot of confusion regarding the definition of innovation. In the past, innovation was contrasted with continual improvement. It was portrayed as an activity limited to R&D and other specialists, and was viewed as technology-dependent and sporadic. Today, that describes invention rather than innovation, which is now viewed as a process that can be implemented and managed by all functions.
In a 2006 presentation, researchers Jessica Jenness and Isa Nahmens said, "The next step for quality professionals should be to broaden the scope to systematic innovation. … Innovation should be seen as an integral part of everyone’s task rather than the responsibility of a separate department and a few specialists."7
And in the 2008 ASQ Future of Quality Study, Armand Feigenbaum said, "Change and innovation are as much attributes of quality and how we manage quality as they are of the products, processes and services that are produced and delivered."8
In a white paper from 2005, the European Office of Technology and Innovation contrasted innovation with invention, saying, "Innovation is a holistic process involving the entire organization of a commercial enterprise, whereas invention is a discrete event typically performed by specialist individuals or very small teams."9
This is a significant departure from the traditional view of innovation. The notion that innovation can be created and nurtured as a process everybody can participate in will likely change the traditional role of the quality practitioner.
To survive and prosper in the years ahead, organizations will need to educate their employees on their innovation process and make that process part of its way of doing business. Fundamentally, quality practitioners are process engineers, so they’re well positioned to help organizations with this process.
Many organizations now require supplier third-party certification or compliance with ISO standards, such as ISO 9001 and ISO 14001. In addition, an emphasis on corporate social responsibility is on the horizon.
To date, suppliers have needed to determine how to address these customer requirements in their management systems. As you might expect, there have been several approaches. That’s why the International Organization for Standardization (ISO) has long promoted the idea of an integrated management system standard.
There is a current ISO proposal circulating for comment that would require all future management system standards to use a common outline; for example, clause structure as well as common text. This has not been well received in the United States but is gaining some support internationally.
When it comes to standardization, "more is better" is a general rule. The problem with the current ISO proposal is the organization has created new text for use with many of the clauses. This text has not reached the level of consensus to which an ISO standard is normally subjected.
Some also view the requirement for a common outline to be a step back to the former ISO 9000 elemental structure as opposed to its current process approach. The automotive sector is facilitating a discussion on a potential path forward for this type of initiative that may provide long-term direction for the ISO effort.
In a 2008 report, IBM said, "Enterprises must accept three simple premises around this topic [change management]. … First, change is inevitable. … Second, change is accelerating. … Third, the firms that will succeed will be those that adapt to change."10
In that same report, IBM said, "Knowing that change is inevitable and even desirable does not help people prepare for change."11 Leadership needs to drive a culture in which change is accepted but properly managed.
To be effective, the change management process needs to be lean, agile and fast. But it’s also important to ensure process owners for each step are in sync so oversight can be kept to a minimum. To accomplish this, organizations should create a value stream map for the current process, execute a waste-elimination exercise and then perform process reengineering. Finally, appropriate metrics will be needed to drive the right behaviors.
Organizations often find themselves in a position of solving the same problems over and over again as talent leaves and new people are hired. In a 2011 paper, ASQ past chair Greg Watson said, "Although knowledge will grow, the rate of wisdom loss will accelerate. Systems for preserving the wisdom of the past and building on it to gain new insights will be required."12
The Conference Board pointed out that quality practitioners will need to use established tools and techniques more effectively. It said the problem is not with the tools, but rather their implementation. That’s why top leadership needs to establish a culture of quality in organizations and ensure adequate resources are devoted to quality, which needs to exist in a more holistic sense that includes planning, reliability and warranty.13
One quality tool that can be used to capture and document organizational memory is failure mode and effects analysis, which is most effective when records are updated with lessons learned by a cross-functional team. Disciplined problem solving with effective root cause analysis is another tool that needs to be better implemented.
This preservation of organizational wisdom is key to successful innovation. According to author Bart Huthwaite, insight is necessary for innovation, and an insight happens when three other sights overlap: hindsight, foresight and outsight—the ability to stretch your mind beyond the bounds of your present experience to borrow new ideas from different places.14
As the FDA report indicates, the world in 10 years will be a very different place. Is your organization ready? Are you ready to help shape it into something better?
- Wikiquote, "Alan Kay," http://en.wikiquote.org/wiki/alan_kay.
- BrainyQuote, "Bandwagon Quotes," www.brainyquote.com/quotes/keywords/bandwagon.html.
- Food and Drug Administration, "Pathway to Global Product Safety and Quality," July 7, 2011, www.fda.gov/downloads/aboutfda/centersoffices/oc/globalproductpathway/ucm262528.pdf.
- Mike Adams, "Answering the 2011 CEO Challenge: Accelerating Growth Through Quality," The Conference Board, June 2011.
- McKinsey Global,
"Innovation and Commercialization 2010: McKinsey Global Survey Results," August
- Jessica Jenness and Isa Nahmens, "The Future of Quality: What’s Next After Six Sigma?" March 23, 2006, www.reachus.com/asq1509/Presentations/3-06_Presentation_The%20Future%20of%20Quality-Final.ppt.
- ASQ, "No Boundaries: ASQ’s Future of Quality Study," 2008.
- Howard Smith, "What Innovation Is: How Companies Develop Operating Systems for Innovation," European Office of Innovation and Technology, 2005, www.innovationtools.com/pdf/innovation_update_2005.pdf.
- IBM, "InnovationJam 2008: Executive Report," www.ibm.com/ibm/files/S687206M21879X87/IJam08Report.pdf.
- Gregory H. Watson, "Scenarios of the Future as Viewed in 2011," http://asq.org/2011/09/global-quality/prognostications-scenarios-of-the-future-as-viewed-in-2011.pdf.
- Mike Adams and Toddi Gutner, "A Leadership Prescription for the Future of Quality," The Conference Board, May 2009.
- Bart Huthwaite, Rules of Innovation, Institute for Lean Innovation, 2007.
R. Dan Reid is program manager of quality at AIAG in Southfield, MI. An ASQ fellow and ASQ-certified quality engineer, he is the co-author of ISO 9001:2000; QS-9000; ISO/TS 16949; the Chrysler, Ford and GM Advanced Product Quality Planning and Control Plan, Production Part Approval Process and Potential Failure Modes and Effects Analysis manuals; ISO IWA 1; and AIAG’s Business Operating Systems for Health Care Organizations.