Innovation and Company Culture

Reading the brief synopsis of ASQ's future study I am amazed at the statements contained in the study and I am interested to read the full study when it is completed.

Rather than take a broad swipe at the topics in the study, I would like to focus my attention on the topic that I think is the most critical for the future of the world economy: innovation. My favorite definition of innovation being the practical application of invention, which is itself the result of creativity. It is in the realm of creativity that the engineer and the poet, the researcher and the composer, the manager and the sculptor exist in the same space and breathe the same air. What causes this spark of creativity which leads down the path to invention and innovation? What can organizations do to cultivate this spark?


I think that a company that wants to engender creativity, invention and innovation must be a company that has a stable and predictable company culture. Note that I did not say "good" company culture. A good company culture is truly in the eye of the beholder. There are as many company cultures as there are people and just like the personality of every person is different, the culture of every company is different. The key issue is the stability and predictability of the culture. Just like no one wants to be married to someone who is happy one minute, sad the next, responsible the next and then irresponsible nobody wants to work for a company that cannot maintain a consistent culture. Acquisitions (usually without the requisite planning and integration periods), frequent senior management changes ("frequent" meaning less than two years) and conflicting internal structures (multiple reporting lines, different departments with different mandates) lead to a culture of uncertainty and insecurity. People who are in such a culture are more concerned with their basic career survival rather than being creative. Just like Maslow's hierarchy of needs they are not at all concerned with the higher levels of actualization in the company.

Innovation is a fact of life for business going forward. Companies that do not recognize this are doomed to failure as a lack of innovation is the quickest way to lose market share. Cost-cutting does not win customers, innovation does. Companies that are serious about innovation will do whatever they can to create and sustain a predictable company culture. "Good" company cultures abound in the business world and the majority of them would be considered "stable". As Quality professionals we can lead the discussion of what constitutes a stable company culture in our own companies. We cannot afford to do otherwise.

Educational Quality and Global Competition

Any organization can benefit from disciplined thinking, data-driven discussions (note I said "discussions" not "decision-making") and a process-based structure. In his blog Paul Borawski lauded the pioneering efforts of Dr. JoAnn Sternke, the Superintendent of the Pewaukee School District in Wisconsin, and her instilling of quality-thinking in her organization's activities.

In Georgia there are state requirements for education and regular evaluation of students. I am familiar with one part of Atlanta, the northeast suburbs, where there is a high Asian population including Koreans, Chinese, Japanese and Indians. These groups are well-known for their strong educational systems and family support of education. A Chinese friend whose daughter attends one of the premier elementary schools in the area laments the very simplistic course program and she supplements her daughter's education with several hours of home study every night. Even her daughter complains that she is bored most of the time in class compared to her school in China; mathematics is one area that is significantly weaker.

I applaud this district for their effort to document their strategies. The majority of school districts (and even many companies) fail to do even what they did here. However, just like the majority of companies in the U.S. that will find that they will be unable to compete with the global market place of the next 20 years our educational system simply cannot compete with them today. And since the educational system of our country is an input into the business competition of the future, even more responsibility is needed to develop effective thinking here. Considering that significant educational change today would not be fully implemented until the third generation (the students of today's students) with the competitive advantage being felt in the fourth generation and considering that today's competitors are already ahead educationally and will also continue to advance....80 years from today is far too late to win the global competition. We are way past implementing what was done in business 20 years ago into schools today, we need schools today to be even more innovative than the business world since the impact of their improvement will not be felt for decades...and even then it might be too late.

The Fallacy of PPM

10 and 20,000. What are those numbers? They are the goals for Customer PPM and Manufacturing PPM (2% reject rate) at a typical automotive Tier 1 supplier. If Engineering is allowed to design and Manufacturing is allowed to build to a 20,000 PPM Quality level then how can a company reach the goal of 10 PPM toward the Customer?

I think that companies kid themselves into believing that there is a difference between what Engineering and Manufacturing do and what the Customer receives. They wrongly assume that the problems CREATED in Engineering and Manufacturing will magically disappear as the product moves through the process. They usually assume, even subconsciously, that Quality will find the problems. Unfortunately, Quality ran out of magic pixie dust a long time ago, if it even existed at all. Nobody can inspect Quality into a product.

When are the managers of these companies, C-level managers, going to wake up and see this particular fallacy for what it is and do something about it? I don’t ask these questions from the normal, hum-drum “there goes the Quality guy again, spouting off about PPM” level. I ask these questions from the competitive survival level. What do you think the Chinese and Indian companies are doing right now? Learning from the best and ignoring the rest. When they rise up to the global stage with innovative, inexpensive and infallible products, where will you be? Chasing PPM or some “Zero Defect Program”? Awarding each other Black Belts and counting the phantom cost savings from continuous improvement? Worried about Cpk and Gage R&R numbers? Wake up…or you will see that the past few years have been a walk in the park compared to what’s coming. The previous American and European automotive recession was driven primarily by financial and marketing-related issues. The next one will be driven by Quality; there will be no recovery.

Quality and Social Responsibility

In his recent blog, ASQ CEO Paul Borawski asks the Quality world how to measure the return on investment for Social Responsibility (SR) in order to make a business case about it. Many companies are already embracing a form of SR in their daily work, but for different reasons. Given this situation, in many cases there is no need to make a business case for SR.

Over the past few years, in light of various company scandals worldwide, many companies have adopted a "Code of Ethics" or some other document that defines the socially responsible and ethical expectations. All employees are trained in this "Code" and are required to document their understanding and acceptance of the requirements. This activity is usually managed by an administrative function in the company.

A company that has already implemented a Code of Ethics can use ISO 26000 to evaluate and, if necessary, modify their document to make it match the expectations of the standard. Those companies that do not have a Code of Ethics can use the requirements of ISO 26000 to start their own document and follow through on it. In either case, the standard is serving its purpose to be used as a guideline for the further implementation of SR in the world.

"All you have is an opinion"

I recently saw an email signature to the effect of "If you don't have data then all you have is an opinion". I felt a mixture of sarcasm and disgust. People actually think this way, I used to think this way...so what's wrong with it?

Data is not the end-all, be-all of every business decision, nor every decision in life for that matter. In fact, I posit that strictly data-driven decisions, made in a vacuum of ignorance of other factors, make up a very small percentage of life's decisions. I remember in my Black Belt training that the instructor said "this doesn't really apply to real-life situations, don't take this home with you and ask your wife to follow it". At the time it was a side joke for the participants but looking back now, I see it as a glaring admission of the limited nature of data-driven decision making. If Six Sigma can help companies save billions of dollars then why not apply it at home? Why not use it to make all of life's decisions....?

The problem is that there is more to life than data, just like there is more to business than data.  You have to consider the emotional needs of your family, the legal ramifications, the thoughts of your neighbors, etc. when you make a decision in real life. It's the same in business. You must consider all of the thoughts and feelings of your "stakeholders" in order to be successful. Data is a powerful tool but it is only one tool out of many. It certainly is NOT an easy shortcut to every decision to be made in business, no matter how much people want it to be. There are NO easy decisions in business and there are NO shortcuts. If you don't believe that, then you and your company will eventually fail, in a big way or a small way.

I'm not big on email signature quotations but maybe that person should change theirs to say "In business and life, all you have is an opinion". Of course, that's my opinion...what do you think? Let me know here or on my LinkedIn page....

2011 - Goals for Quality

For 2011 my goals for quality include learning to listen more closely to my customers, coach my team more effectively and motivate my colleagues to make improvement. I think that working in quality I have the best chance to directly influence the direction of my company toward improvement. Not only improvement to meet the targets and objectives of the business but also improvement to change the mindset of the personnel. Listening, coaching and motivation are the methods that any manager can use to manage his/her team and company. But by working in quality we have a unique opportunity to do so much more with those methods. Let's do just that this year.

The End of Baldridge?

Paul Borawski wrote in this month's "A View from the Q" blog about the fact that the Baldridge national quality award was at risk for elimination due to cost-saving measures. If there was ever a better example of politics following business, I can't think of one. Many of us have experience in the practice of reducing manpower during times of trouble, especially in the last few years. Where are the first areas to be cut? In my experience it's Training, Environment/Safety and Quality.

What does this mean from a business perspective? I think that it shows a lack of understanding of processes and the inputs that drive the outputs. Despite the fact that ISO 9001 group of standards promotes the process-centered business, and many companies adhere to those standards, I think that a large group of business leaders lack a basic understanding of processes in general. A process has one or more inputs and produces one or more outputs. The outputs are directly related to the inputs. An old computer term GIGO (Garbage In, Garbage Out) is an example of process thinking. In a business, the outputs are relatively easy to spot (e.g. the product of the business, the profit, employee salaries, etc.) but the inputs are much more difficult to pin down. And an understanding of the process itself often eludes even the most celebrated business leaders. The fact that Quality tends to be one of the first areas to be cut reflects the thinking that Quality is not as important to the business as other areas. This is despite the fact that Quality, while not directly producing outputs, works to guarantee that the overall process is performing in the most efficient and effective way to generate the optimum outputs.

The desire of the government to cut Baldridge is a direct reflection of the desire in business to cut Quality and it's driven by the same reason: a lack of understanding of Quality's role in society. We need to be the voice to increase the awareness of Quality in our organizations and society in general.