Hail2013 Innovation

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Quality and Innovation

February 3, 2013

Juhani Anttila

International Academy for Quality (IAQ)Helsinki, Finland juhani.antt [email protected] , ww.QualityIntegration.biz

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xxxx/20.6.2012/jan

Main themes for quality and innovation as business management disciplines:

1. Evolution of the disciplines

2. Contentual relationships

3. Business integration: Quality management and innovation management

4. Product and technology innovation for improving quality

5. Innovat ions for quality management

6. Quality for innovat ion management

7. Business leadership and individual creativity

8. Consistent and systematic approach for organizational learning

Quality and innovation



3 Qualitymanagement

Quality and Innovation, Disciplines for the benefits oforganizations and society: --> Evolution and realization

3984/3.1.2013/jan

Innovationmanagement

Shewhart 1924

Ichikawa 1962Feigenbaum 1945

Deming 1947Juran 1935

Modernquality activists

Tarde 1903

Role modelorganizations

National and regional

movements,ISO standardization 1979

Great inventors

Modern technologicalinventions

Schumpeter 1939Technological innovations

Rogers 1962Social innovations

Intellectual PropertyRights

Collaborativeinnovation

Global, national andregional movements

The disciplines have evolved in isolationfrom each other.

Quality and innovation are realized forthe benefits of organizations and society

There are only few substant ial cross-references between the disciplines.



4

Forces of change - Shaping the future of quality

1. Global responsibility

2. Consumer awareness

3. Globalization

4. Increasing rate of change

5. Workforce of the future

6. Aging population

7. 21st century quality

8. Innovation

The sixth future study of the American Societyfor Quality in 2011

3986/2.1.2013/jan

Emergence to the future

Quality profession is st riving forbroader scopes:

Production process (1924)Quality system (1987)

Quality management system (2000)Business ecosystem (2010)

Preferred scenario: “ Resource restoration”Creating implications to quality concept, organizations, and the quality profession as a whole



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Innovation is an old tradition in quality management

3989/3.1.2013/jan

Quality (in an organization’s business connection) =• degree to which the organization’s products (goods and services) fulfill

requirements of the customers and the market place. (ISO 9000)

Organizations compete with each other by the quality of their products and efficiency

of their operations. In order to be successful, organizations must be responsive tochanging market situations and strive for distinctively outstanding and excellentproducts in an efficient way. In quality management this has been solved throughapplying continual improvement methodologies with innovations in the products andbusiness processes.

Hence, innovation is not any new subject in the quality discipline but it has inherently

been in professional quality practices already decades.• However, we have not achieved much innovations in the quality methodologies.



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Innovation in the ISO 9004:2009 standard for thesustained success of an organization

3985/3.1.2013/jan

The sustained success of an organization is demonstrated by its ability to satisfy theneeds and expectations of i ts customers and other interested parties, over the long termand in a balanced way. This can be achieved through

• Awareness of the organization's environment• The effective management of opportunities and risks

• Learning from experience• Application of improvement and innovation

Innovation can be applied to issues at all levels, through changes in

• Technology or product

• Processes

• The organization

• The organization's management system

In the context of quality management, innovation is linked with improvements andorganizational learning.



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Example:Innovate America

Global, national and regional movementsunderline quality aspects

3987/3.1.2013/jan

Although there are muchquality aspects emphasizedin these programs, however,

typically quality expertshave not been involved

with these activities.



8

Relationships of quality and innovationin theory and practice?

3990/3.1.2013/jan

Discipline’sevolution

Contentualrelations

Integrationin businesses

An organization’sbusiness management

Q Q QI I I

Contentual elements of the disciplines (quality & innovation)?

Quality management & Innovation management?



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The existing ISO 9000 QMPs:1. Customer focus2. Leadership3. Involvement of people4. Process approach

5. System approach to management6. Continual improvement7. Factual approach to decision making8. Mutually beneficial supplier

relationships

Suggested revision, Draft Nov. 2012:1. Customer focus2. Leadership3. Engagement and competence of

people

4. Process approach5. Improvement6. Informed decision making7. Relationship management

Revision of the ISO 9000 QMPs(Quality management principles)

3938/3.1.2013/jan

Improved

performance

Quality management,

Performance improvementand organizational excellence

QMPs are fundamental truths or proposit ions that serve as the foundation for a system of beliefor behavior, or for a chain of reasoning for the ISO 9000 standardization.----- In organizations, QNPs should be used in creative ways.



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Fundamental concepts, core values, and principlesfor good management (Performance excellence models)

3939/3.2.2010/jan

EFQM - Fundamental concepts of excellence:• Achieving balanced results• Adding value for customers• Leading with vision, inspiration & integrity• Managing by processes• Succeeding through people• Nurturing creativity & innovation

• Building partnerships• Taking responsibility for a sustainable futureMalcolm Baldrige - Core values and concepts:• Visionary leadership• Customer-driven excellence• Organizational and personal learning• Valuing employees and partners• Agility

• Focus on the future• Managing for innovation• Management by fact• Social responsibility• Focus on results and creating value• Systems perspective

Deming Application Prize – Total Quality Management(TQM) Principles:

– Distinctive performance improvement throughthe application of TQM

• Challenging and customer-orientedbusiness objectives and strategies underthe management leadership

• Proper implementation of TQM to achieve

the business objectives• Outstanding results obtained for the

business objectives– TQM understanding and enthusiasm

• Aiming at long-term success throughbenefits to customers and other interestedparties

• Managing the organization putting 'quality'in its core

• Top management leadership, vision,strategies, and pol icies• Partic ipation of organization’s all members

based on human resource development• Developing and applying effective quality

management methods• Improving and transforming organization's

constitution for sustainable success



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All innovations are for quality improvements!

3991/3.1.2013/jan

There are no internationally standardized definition for the concept innovation.

In most cases innovation means a conceptually new and commercially viable solution inproducts, processes, business systems, and technologies, or a new solution that is readilyavailable to markets, governments, and society.

All business innovations directly promote the basic intentions of quality management toimprove product performance, increase the efficiency of bus iness processes, and makepossible organizations’ radical structural and operational transformation and reforms.



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Contentual elements of innovation

3982/3.1.2013/jan

Historical conceptions of innovation:

1. Imitation 2. Invention 3. Discovery 4. Imagination 5. Ingenuity 6. Cultural change7. Social change 8. Organizational change 9. Political innovation 10.Creativity11. Technological change 12. Technological innovation 13. Commercialized innovation

The Vocabulary of Innovation:ACT SOURCE EFFECTSImitation Inspiration CultureInvention Ingenuity CivilizationDiscovery Curiosity EvolutionExperiment / Investigation Imagination Modernity/ProgressInitiative Reason (logic) AdvancementPraxis/action Improvement

Change DevelopmentCreation/Creativity RevolutionProductionNovation / Innovation Novelty

(Ref.: Benoît Godin)

Quality aspects are here implic itly included.



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Innovations for unique business solutions

What are innovations about?

1804/2.1.2013/jan

What

How

New

New

Old

Old

Innovations are for improving theperformance of products, andbusiness structures and processes.

From organization’s performance pointof view “How” is more important than“What”.

I1

I2

I3Old



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Integrating quality and innovation managements withbusiness management in an organization

3994/3.1.2013/jan

Organizations have a key role in implementing quality and innovation procedures inpractice.

It is not beneficial to the organizations if quality management and innovationmanagement are developed separately as isolated ini tiatives from each other.

Additionally also asset management - that considers anything with potential value to anorganization and for which the organization has a responsibility - is an importantdiscipline that is closely related to the two others.

All these discipl ines need each other and they even may cross-ferti lize each other, e.g.there should be quality and innovation in both quality and innovation processes.



15 Qualitymanagement

Business integration: Linking quality management andinnovation management to business management

3981/3.1.2013/jan

Innovationmanagement

Assetmanagement

Businessmanagement

Shewhart 1924

Ichikawa 1962Feigenbaum 1945

Deming 1947Juran 1935

Modernquality activists

Tarde 1903Fayol 1916Taylor 1911

Modernbusiness thinkers



National and regionalmovements,

ISO standardization 1979

Great inventors

Modern technologicalinventions

Schumpeter 1939Technological innovations

Rogers 1962Social innovations

Intellectual PropertyRights

Collaborativeinnovation

Management theoriesX, Y, and Z

BSI & Institute of AssetManagement

InfrastructureManagement

Global, national andregional movements

ISO Standardization 2013

Business integration



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Integration is the main strategy for a professionalexpertise approach within an organization (system)

Integration means:

• Implementing effective and efficient expertiseitems embedded within normal businessmanagement activities (especially in businessprocesses)

- Acting against building distinct ” expertisesystems” (i.e. lack of integration).

Business-separated expertise init iativesare artif icial.

One must understand and take into account thenature of the organizational system, its businessand its realities when implementing expertiseinit iatives of business management. Integration isalways an organization-dedicated solution.

3988/8.1.2013/jan

Expertise disciplines may include:•Finance•Quality•Business risks•Assets•Information security

•Human resources•Information and communications•Knowledge•Occupational health and safety•Environmental protection•Innovation•Ethics

•Social responsibility•etc.

There are different standards publ ished forthese different expertise disciplines.

Cross-influence and collaboration of all expertiseareas are needed. E.g. innovation is needed inquality management and quality in innovationmanagement.



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Integrating specialized managerial disciplines andensuring natural business diversity

3342/2.1.2013jan (Ref.: ISO Management systems standardization, MSS)

Generalmanagement

responsibilitiesand a business

system

Risks

Finance

Productquality

Occupational

health and safety

Security

Environment

Socialresponsibility

Innovation

The Finnish modelfor integration (MSS)

Organizational diversity

Organizationalidentity & privacy

General managementsystem



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Product and technology innovationsin quality management

3992/3.1.2013/jan

A competitive product quality is based on technology and product innovations.

In quality management this is a crucial issue in managing the business processes related with(ISO 9004):

- product realization- acquisition of new technologies

According to the ISO 9004 standard, innovation can be applied to issues at all levels, throughchanges in technology or product, i.e. innovations that:

- Respond to the changing needs and expectations of customers or other interested parties

- Anticipate possible changes in the organization’s environment and product li fecycles



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The pursuit of WOW!- T. Peters 1994” ...stepping out (individuals at all level in a firm and independent

contractors) and standing out (corporations and other organizations) fromthe growing crowd of look-likes...”

0014/26.9.2002/jan

In search of excellence- T. Peters 1982

A passion for excellence

- T. Peters 1985

Striving for excellence

(*) Tom Peters



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Technology and innovation

1983/2.1.2013/jan

Technology:- Processes by which an organization transforms labor, capital, and informationinto products (goods and services) to provide value for interested parties(stakeholders)

(This concept of technology extends beyond engineering and

manufacturing to encompass a range of marketing, investment, andmanagerial processes. It also includes quality management)

Innovation:- A change in one of the technologies

(Ref.: Christensen)



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Value networks, the basis for technology innovation

1988/2.2.2013/jan

Organizations’ success or failure to respond to technology change depend on:

• Managerial, organizational, and cultural basis

• Ability of organizations to deal with new technology with regard to therequired new skills and competences

The concept of value network, however, has actually much greater power to create

benefits of new technologies and to avoid stumbling when confronting technologychange.

(Ref.: Christensen)



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Sustaining versus disruptive technology

1984/2.1.2013/jan

Sustaining technologies:- Technologies fostering improved product performance

(Development of sustaining technology may be discontinuous or radical incharacter or of an incremental nature.)

Disruptive technologies (discontinuous innovation):- Technologies that result in worse product (technical) performance (at least in the nearterm)

(Generally, disruptive technologies bring to market very different value proposit ionthan had been available previously. Generally, disruptive technologiesunderperform established products in mainstream markets. But they have otherfeatures that a few customers value. Products based on disruptive technologies aretypically cheaper, simpler, smaller, and more convenient to use.)

(Ref.: Christensen)



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The impact of sustaining and disruptivetechnological innovations

1986/2.1.2010/jan (Ref.: Christensen)

Performance

Time

Disruptivetechnologicalinnovation

Progress due tosustaining technologies



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Quality management: From imitation to innovation

3993/3.1.2013/jan

Due to the crisis we have needs particularly for disruptive and lean innovations in qualitymanagement and quality assurance practices because the existing prevalent practices inorganizations are not necessarily any more relevant or effective to the challenges of today’sbusiness environments, e.g. related to networked businesses and ecosystems.

Time

SpeedChangesAgilityComplexity

DiversityImmaterialnessVariety(of business environment)

Businessenvironmentsand society

Problem

Quality profession in its entirety

There is a crisis in quality profession:

St d di ti (1) d li ti (2) f th l



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Standardization (1) and application (2) of the generalprinciples and models of good management

Model Y / Consensus process Y

Organization A: Realization A / Innovation process A

Practical realization

of the models

3943/27.8.2011/jan

StandardizationModel X / Consensus process X

Organization B: Realization B / Innovation process B

(1)

(2)



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Trampoline strategy for applying standards

3883/12.1.2011/jan

There are no restr ictions to use general standards

(e.g. ISO 9000) in an innovative way and to st rive for

excellence in bus iness performance.

– It depends only on organizations’ business

leaders’ and experts’ will and ability to

differentiate from the others of the crowd.

– The biggest obstacles that blocks our way or

prevents or hinders progress is our existing

habbits, misperceptions, and prejudgments

that are hard to give up.

A

B



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Challenges for creative ISO 9000 applications

1. Company-dedicated concepts and principles, goals and strategies, and theirarticulation aligned wi th the challenging aims of ISO 9000:

– Living with the models of the modern professional quality approach integratedwith business issues

– Understanding ISO 9000 standards for quality of management and for businessexcellence

2. Tools, methods and theories supporting the quality approach:

– Using internationally recognized methodology for increasing businesseffectiveness and efficiency, and for differentiating from the others

– Applying modern means, e.g. using ITC business methodology (”e-quality” , e-certificate” , etc.)

3. Management infrastructure for realizing the quality approach

– Mobilizing the whole organization to use innovatively company’s selectedbusiness integrated quality principles and tools

– Tuning quality approach with the rapidly changing and emergent businessenvironment and organizational management structures

1880/8.1.2013/jan

F t g t’ d t di g i ti



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From top management’s understanding, communication,and commitment to business system’s performance

1057/5.1.2013/jan

0

Head’sIdea

Collaborators,Senior Leaders

(Chain Reaction)

System(for Business

Mission):

• Employees• Partners• Experts

Major businessresults

(Improvement)

= Catchball

+

CEO,President

The crucial role of leadership and language



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3621/2.1.2013/jan

An organization is a living organism. It is a set ofconversations among people.

Language is the defining environment in which anorganization lives. It is how those in the system reachagreement. Language is a medium for organizationalgrowth and change.

Narrowing language increases efficiency. A shared commonlanguage helps the organization arrive at decisions moreefficiently.

Narrowing language increases ignorance. Constrainedby a limited vocabulary, the organization becomesunable to adapt to fundamental changes in itsenvironment. Being unable to change, the organizationeventually declines. As ignorant of our own ignorance,we cannot ask questions outside our own language

experience.

Conversations necessary forgenerating new opportunitiescome from outside theorganization, from the languagethat has a different history.

(Ref.: Sun, The little grey book)

The crucial role of leadership and languagein organizational creative development

An organization may learn and grow only if it creates conditions that help generate new language.Using new language, an organization may create new paths to productivity, and regenerate itself.

Foundations for managing the balanced



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Foundations for managing the balancedmultidisciplinary learning in an organization

1. Personal mastery

2. Mental models

3. Shared vis ion

4. Team learning5. Systems thinking

3997/10.1.2013/jan (Ref.: Senge)

Quality Innovation

Business



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A road to an individual creativity mastery in creativity

Creativity is in connection with the human subconscious and intuition (imaging). Every human beingis naturally creative. A key issue is to release this ability of the internal and external obstacles toimplementation, and to activate it to practical situations (processes).

Road to creativity is affected by:

1. Sense of safety; positive attitude to creativity without fear

2. Sense of identity, autonomy, and self-protection; honest self-scrutiny and awareness with regardto own needs, interests and mental limits

3. Sense of strength, power, and trust; hope, mental strength, and perseverance to overcomeobstacles of spiritual growth

4. Sense of integrity; being honest and having strong moral principles, moral uprightness, beingwhole and undivided

4. Sense of possibility; release from everyday ties, believe in a new and positive action

5. Sense of abundance; joy and plentifulness of the good things of life

6. Sense of connection; social and professional contacts for inf luence and help

7. Sense of compassion; sympathetic concern for the sufferings or misfortunes of others

3998/7.1.2013/jan (Ref.: Julia Cameron)



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Invention(Creativity and aninventor’s idea)

Innovation(A new solution in use forthe benefit of individual,organization, or society)

Time, money, resources, activity, collaboration,multi-disciplinary know-how, commitment

I1 I2

I3OldOld New

O l d

N e w

Product (goods, service),or structure (What)

A c t i v i t

y o r p r o c e s s ( H o w )

Environment

Education,knowledge Design

Expert services Manufacturing

Marketing

Realizing solut ions: People, processes, structures,practices, organizations, cultures, values, etc.

Benefits to all involving parties

MaterialsSales

Financing Development

Management

Piloting,testing

Software

Delivery,logisticsHostileagents

Quality and innovation realization

3999/7.1.2013/jan

Cornerstones of an organization’s different disciplines



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Cornerstones of an organization s different disciplinesmanagement (A learning organization framework)

3996/15.1.2013/jan

An organization’sdisciplines management

approach

(1)Clear understanding of

the guiding ideas,concepts, and principles

(3)Efficient

innovativemanagementinfrastructure

(2)Effectivemanagement

tools

(Ref.: P Senge)

Performanceexcellence

Performance references:-Own targets-Competitors’performance-World class level

Aligning and integrating quality management and



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Aligning and integrating quality management andinnovation management approaches in an organization

3995/3.1.2013/jan

1. Conceptual consistency• Quality management = coordinated activities to di rect and control an organization

with regard to quality (ISO 9000)• Innovation management = coordinated activities to direct and control an

organization with regard to innovation2. Business management’s consistent commitment to quality and innovation from the

organization’s business management point of view3. Collaboration of the organization’s quality and innovation experts in the organization

• Organizational expertise reinforcing contacts to external experts and knowledgesources

4. Harmonized approach in implementing both quality and innovation procedures in theorganization

• ISO/IEC Directives for the high level structure and common concepts that are aimedat for systemizing the management of the different disciplines may be useful.

5. Common managerial framework that supports organizational learning in all necessaryknowledge areas that are needed for the business management

Quality and Innovation managerial disciplines



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xxxx/3.1.2013/jan

Quality and Innovation, managerial disciplines- Conclusions

1. General development of the quality and innovation professions takes place

separately by the experts of the discipline communities.

2. The disciplines have mutually beneficial contentual relationships and interactional

challenges:

• Enhancing mult idisciplinary communication and collaboration

3. Discipline realizations take principally place in organizations.

• Understanding and committing of the business leaders

• Encouraging individual creative operators, inventors

• Establishing a systematic and balanced business integration

A major challenge for organizations:Innovation in quality management and quality in innovation management

Hail2013 Innovation

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