Tito Conti MEQA Conference Jeddah, Kingdom of Saudi Arabia ...€¦ · discontinuity takes place in...
Transcript of Tito Conti MEQA Conference Jeddah, Kingdom of Saudi Arabia ...€¦ · discontinuity takes place in...
Tito Conti
MEQA Conference
Jeddah, Kingdom of Saudi Arabia
16 April 2013
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Quality of goals
and quality of execution
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1. Identify and plan competitive value propositions.
2. Execute processes capable of generating products and services that consistently deliver the promised value.
3. Do [1] and [2] at competitive costs, time, flexibility.
We can call mission [1] «quality of goals» and missions [2]+[3] «quality of execution».
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FITNESS OF THE FULL ORGANIZATION
FITNESS OF THE ORGANIZATION’S SUB-SYSTEM
The Two pillars of Quality = Quality of The Two pillars of Quality = Quality of Goals and Quality of ExecutionGoals and Quality of Execution
Competitive value for customers/stakeholders
QUALITY OF GOALS:
DOING THE RIGHT
THINGS
CONCEIVING AND
PLANNING HIGH
VALUE FOR
CUSTOMERS,
STAKEHOLDERS
AND THE
ORGANISATION
QUALITY OF
EXECUTION: DOING
THINGS RIGHT
GENERATING AND
DELIVERING THE
PLANNED VALUE WITH
MINIMUM LOSSES AND
MINIMUM USE
OF RESOURCES
Tito Conti
DIFFERENTIATION
ENHANCEMENT
VARIATION
REDUCTION
Focus of quality has traditionally been more on execution (reducing defects) than on value planning.
Value planning and execution are equally important but value planning comes logically first, because it makes little sense building a perfect product if it does not attract customers for its face value.
In this presentation we will focus on customer value identification and planning.
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FITNESS OF THE FULL ORGANIZATION
FITNESS OF THE ORGANIZATION’S SUB-SYSTEM
Our focus:Our focus: PlanningPlanning for competitive for competitive value propositionvalue proposition
Competitive value proposition
QUALITY OF GOALS:
DOING THE RIGHT
THINGS
CONCEIVING AND
PLANNING HIGH
VALUE FOR
CUSTOMERS,
STAKEHOLDERS
AND THE
ORGANISATION
QUALITY OF
EXECUTION: DOING
THINGS RIGHT
GENERATING AND
DELIVERING THE
PLANNED VALUE WITH
MINIMUM LOSSES AND
MINIMUM USE
OF RESOURCES
Tito Conti
Action is within the first pillar, but close cooperation with the second is essential
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Planning for customer value cannot be done in global, generic terms. It must be done in specific, analytical terms.
Customer value is in fact a complex construct of the specific satisfactions and dissatisfactions related to the different “qualities” exhibited by the product, each of them associated with different levels of importance and value expectations.
Aim of this presentation is to illustrate an innovative approach to planning that experience has proved to be very effective.
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Aim of this presentation.Aim of this presentation.
In cooperation with significant groups of users,
define the user value perception tree.
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USER
PERCEIVED
VALUE
Q2 - PRODUCT
Q1 - PRE-SALE
SERVICE
Q3 - AFTER-SALE
SERVICE
Q4 - RELATIONS
Q5 - CONTRACTUAL
% value, attributed by
customers to the 1st level
branches (%)
V3
V2
V1
V4
V5
V2.3
V2.2
V2.1
V2.4
V2.5
Q2.1 - SAFETY
Q2.5 -OPTIONAL
Q2.3 - PRIMARY
PERFORMANCES
Q2.2 -ENVIRONMENT
Q2.4 - SECONDARY
PERFORMANCES
Secondary branches, product related
(2nd level qualities)
Primary branches (1st level qualities)
% value, attributed by
customers to the 2nd level
branches
The trunk
2nd and 3rd level branches of an automobile’s quality tree, completed with customer satisfaction results.
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Example of a product Example of a product quality tree . quality tree .
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Lower part: deployment of product qualities for a car.
Upper part: customer satisfaction data for own company and reference competitor.
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Cra
sh
pro
tecti
on
syste
ms
Gas
mileage
Minimum acceptance level
Best in class level
Own company Reference competitor
People safety Primary performances
Secondary performances
Op
tional
featu
res
Bra
kin
g
syste
m a
nd
ro
ad
hold
ing
Cu
sto
mer
valu
e
for
mo
ney
perc
ep
tion
Com
fort
Sp
eed
&
Accele
rati
on
Nois
e
Ap
peara
nce
Vis
ibilit
y
GPS
Ente
rtain
ment
syste
ms
CO
2 &
thin
Pow
ders
’
em
issio
n
Enviro nment Protec
tion
3rd level qualities
4th level qualities
Different dynamics for satisfiers and dissatisfiers
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The dynamics of product The dynamics of product “qualities” under the “qualities” under the
competitive pressure. competitive pressure.
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Most product qualities are intended to carry positive customer value. We call them “satisfiers”. If the value associated with such qualities happens to be below the minimum accepted value (negative value area), the producer is bound to act to bring them into the positive area.
Some qualities are negative by nature: typically failures and errors. We call them “dissatisfiers”. Ideally they should be brought to zero
Planning should address the two factors separately.
A critical point is combining them to forecast the resultant effect on the user.
Best in class level
Minimum acceptance level for
each value carrying quality
V -
V +
0
Different value subtracting qualities
(Area of DISSATISFACTION)
Sh
ift in
tim
e
Issue: reduce negative value for each quality as close as
possible to zero
Issue: increasing customer value through continuous improvement and innovation
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Pro
gre
ss in
p
os
itiv
e c
us
tom
er
valu
e a
ug
men
tati
on
Pro
gre
ss in
ne
gati
ve
Cu
st.
valu
e r
ed
uc
tio
n
Different value adding qualities
(Area of SATISFACTION)
Qualities that extend
from the negative
to the positive value
areas (satisfiers)
Qualities that carry negative
value only (dissatisfiers)
Both the minimum acceptance level and the best in class level shift upwards in time, due to competition and users’ inurement.
Those who want to compete for market leadership must be able to rapidly perceive
when continuous improvement is sufficient
when the time is ripe for innovation.
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Both performance measurements and customer satisfaction data.
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Availability of historical Availability of historical data is of paramount data is of paramount
importance in planningimportance in planning
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Cu
sto
me
r p
erc
eiv
ed
Va
lue
fo
r m
on
ey
Time
Time
t0 t1 t2 t3 t4 t5 t6 t7
Me
as
ura
ble
pe
rfo
rma
nc
e
t0 t1 t2 t3 t4 t5 t6 t7
Own customers
Ref. competitor’s customers
Own product
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Time
t0 t1 t2 t3 t4 t5 t6 t7
Me
asu
rab
le p
erf
orm
an
ce
Time
t0 t1 t2 t3 t4 t5 t6 t7
Co
st a
sso
cia
ted
with
pe
rfo
rma
nce
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Time
t0 t1 t2 t3 t4 t5 t6 t7
Co
st a
sso
cia
ted
with
pe
rfo
rma
nce
At time t3 the decision was taken to pursue a radical
innovation (introduced at time t4) to respond to the
reference competitor’s innovation introduced at time t2.
A peak of cost is shown, corresponding to the innovation, followed by a progressive reduction
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The case of satisfiers
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The KanoThe Kano oneone--dimensional customer dimensional customer requirements diagram. requirements diagram. Typical of incremental Typical of incremental improvement based competition.improvement based competition.
Cu
sto
mer
sati
sfa
cti
on
Product functionality
One-dimensional
quality
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Degree of functionality F
Cust
om
er
perc
eiv
ed
Valu
e
_
+
Present competition range
TR
BIC
●
●
V=0 + Ft F0
(TR=Threshold; BIC= Best in class level).
Curve at time t
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Degree of functionality F
_
+
Competitive range today
TR T
BICT BIC Y
Competitive range yesterday
●
● ●
● TR Y
A competitor makes a quantum leap jump In
customer perceived value
Fo
V*
+
Cust
om
er
p
erc
eiv
ed
negati
ve-
valu
e
Fy Ft
Cust
om
er
p
erc
eiv
ed
p
osi
tive
-va
lue
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Degree of functionality F
Cust
om
er
Perc
eiv
ed
posi
tive
va
lue
_
+
Fo
Vo
The last stage of downward migration of the positive quality curve brings it into the negative bottom-right quadrant. That because users give top performance for granted and want it. In this area are also hosted qualities that are subject to mandatory quality standards.
+ C
ust
om
er
perc
eiv
ed
negati
ve-
valu
e
Ft
or, better, the lifecycle of the customer perceived value, that applies to any quality at any level of the user perception tree.
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Must be quality
Cu
sto
mer
sati
sfa
cti
on
Product functionality
Attractive
Quality
One-dimensional
quality
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The Kano model uses three diagrams to describe customer satisfaction vs. measurable performance, They refer to“ attractive quality”, “one dimensional quality”, “must be quality”.
Our approach is based on one diagram only, which shows however different characters along the so called “quality lifecycle”.
It starts with the “attractive” phase, when a discontinuity takes place in customer value, normally due to an innovative approach. Then a “competitive” phase follows, normally characterized by incremental-improvement-based competition. Finally, the “must-be quality” phase.
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We use We use one diagram only for diagram only for satisfierssatisfiers..
CU
ST
OM
ER
PER
CEIV
ED
N
EG
AT
IVE-
VA
LU
E
Life cycle of the qualities which are intended to carry positive customer value (satisfiers), from the stage of attractive to the stage of must be.
DEGREE OF FUNCTIONALITY
_
+
MUST-BE QUALITY
More mature competition.
Incremental improvements.
New attractive solution exceeds present customer
value expectations
CU
ST
OM
ER
PER
CEIV
ED
PO
SIT
IVE
VA
LU
E
Others follow
No more
- or marginal -
-competition.
P0SITIVE VALLUE AREA WERE COMPETITION TAKES PLACE
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NEGATIVE VALUE AREA
The quality lifecycle says that the same level of performance (or functionality) – that is, delivered value – leads to different and decreasing levels of customer satisfaction – that is, perceived value - in time.
The moving cause of the quality lifecycle are: Human beings get used to value: they are sensitive
to value variation more than to absolute value. Then, when the number of competitors increases
and competition gets harsher, the speed of improvement increases, innovations are more frequent, the duration of the quality lifecycle decreases.
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The Kano model defines “attractive quality” as the quality that generates high customer satisfaction if present, but it does not generate dissatisfaction if absent.
Such definition seems to apply more to optional qualities than to the most significant qualities that make the bulk of customer perceived value.
We do not consider that particular case here and use the adjective attractive for the combination of importance and uncommon customer value, that normally happens when a highly appreciated innovation is offered. That is why one curve, that varies along the quality lifecycle, is sufficient.
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Definition of attractive qualityDefinition of attractive quality
Qualities that carry negative value only, by their own nature. Typical are failures and errors.
They cannot be measured independently, but only by estimating the reduction in customer satisfaction that they induce.
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The must-not-be negative quality curve is derived indirectly, starting from Vp (perceived value in absence of dissatisfiers); then estimating the reduction ∆Vx due to dis-functionality Dx. The resultant perceived value is VR. The curve in the lower quadrant is made taking ∆Vx as the ordinate corresponding to abscissa Dx.
MUST-NOT-BE NEGATIVE QUALITIES (INTRINSIC DISSATISFIERS)
Degree of dis-functionality
Cust
om
er
perc
eiv
ed
negati
ve-
valu
e
_
+
Fo
Vo
+
“Must-not-be” negative-quality
VP
DX
VR
∆VX P
Do ∆VX
VP
It does not make any sense measuring dissatisfaction alone.
Dissatisfaction due to dissatisfiers is a subtractive element of a normally positive whole.
What makes sense is measuring satisfaction reduction due to dissatisfiers. Such quite peculiar “measurement” is in fact an estimate resulting from dialogue and deep analyses with expert users.
That issue is particularly important for high- tech products, where time-to market often conflicts with residual failure/defect rate.
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The higher the customer perceived value, the less it is affected by dissatisfiers. But quantification of the impact and identification of the right balance can only come from close dialogue with the users.
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Custo
mer
perc
eiv
ed
valu
e
Functionality Defectiveness
-
V3
V0
P2
SATISFIER AREA
DISSATISFIER AREA
AREA OF EMIPIRICAL COMBINATION OF SATISFIERS AND DISSATISFIERS
d3
Incremental improvement
d2
F0
P3
V2
∆V2
D3
∆V3
●
● ∆V3
Attractive value due to innovative solution
●
D2
∆V2 P1
F2
V1
F1
The dynamics of planning for customer value is complex. Understanding and mastering it is a critical factor for success in the marketplace; and the more so in highly competitive market sectors. The main requirements are
Learn to think in terms of customer value, not just
defect rate reduction. Learn to classify product qualities from the user
perspective: importance, value for money, expectations, dreams, customer perception tree...
Get a deep understanding of the dynamics of user perceived value (when possible, value for money) versus measurable performance for the different product qualities.
Think in terms of satisfiers and dissatisfiers, their combinations. And have the quality lifecycle in mind.
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Carry on systematic surveys of own and target competitors’ customer satisfaction.
Be as close as possible to users (not just own customers). Talking to competent users is not only a precious source of information about applications, but the most effective approach to choose among different alternatives in relation to customer value planning (typical, the balance between time to market and defect rate reduction).
Do not rely too much on questionnaires. They cannot give what dialogue with users does. Questionnaires should be used at a later stage, that of check of hypotheses.
Do not rely too much on mathematical algorithms in the planning phase. They may look elegant but, again, there is no substitute for direct dialogue with customers.
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THE END