QFD for Strategic Business Positioning and Business Development
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QFD for Strategic Business Positioning and Business Development

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INTERNATIONAL QFD CONFERENCE 2013 ...

INTERNATIONAL QFD CONFERENCE 2013

The common practice of QFD takes product development to a high level of sophistication and competitive impact by discovering real customer needs and deploying differentiating functionalities into the product design that will fully satisfy chosen customers. Strategic positioning of a business is the responsibility of top management, a process that would benefit greatly from the QFD logic and that can be much better integrated with product development. In this paper QFD applied to strategic positioning and business development is presented as an effective handshake between business and product development. The integration of QFD thinking in strategy development is instrumental in defining a strongly differentiating position of a company in its competitive arena.

Why are some companies capable of bringing to the market innovative and profitable products and services whilst others, even with high investments in new product development work hard but fail? Recent investigations show that there is no direct relation between investments in R&D and successful innovation. Success factors mentioned instead are unique combination of talent, knowledge, teamwork structure, tools and processes. In our view, important as these factors certainly are, what really sets the successful innovators apart is their tight and transparent cooperation between business development, marketing and sales, R&D, production and sometimes purchasing in defining the key target customer clusters for growth, related new differentiating propositions and the way these departments jointly develop, test, produce and launch them.

Despite its small size, The Netherlands is strong in research and development. It scores high on the scientific citation index and harbors top industrial players as Philips, ASML, DSM, AKZO Nobel, Shell and a host of medium and small technology driven companies. Unfortunately, as also shown by the OESO Innovation Scoreboards, the scientific and technological strength of too many of these companies is not translated into new winning products in the market. Why? There are multiple reasons why of course, ranging from entrepreneurial mind set, lack of critical mass to funding issues. A critical aspect that will be elaborated in this paper is the extent to which they are able to use their strong technology to come up with propositions that really hit the bull’s eye of important customer needs. These include unfulfilled manifest, expressed needs and hidden, unexpressed needs, as well as current dissatisfiers. Some of those companies, large and small, are strong in defining their future business position and role in the industry by combining in-depth customer understanding with their vast technology potential. However, the majority of technology-driven companies is guided too heavily by the narrow lanes of their past business, extended with their view on technological opportunities, often within their own technology domain...

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QFD for Strategic Business Positioning and Business Development QFD for Strategic Business Positioning and Business Development Document Transcript

  • QFD  as  integrating  framework  for  differentiated  business  positioning,   business  development  and  related  product  definition      —    A  business  case  from  The  Netherlands       B.  Visnjicki,  PhD,  QFD  Black  Belt®,   Executive  Director  Coddel,  BV,  associate  at  Qanbridge,  BV   Tj  .Gorter,  MSc   Executive  Director  Qanbridge  BV   Glenn  Mazur,  QFD  Red  Belt®,   President,  Japan  Business  Consultants,  Ltd.   Executive  Director,  QFD  Institute           Keywords:  Modern  QFD,  Strategic  positioning,  Business  Development,  Strategic  Grid,  VOC           Summary   The   common   practice   of   QFD   takes   product   development   to   a   high   level   of   sophistication   and   competitive  impact  by  discovering  real  customer  needs  and  deploying  differentiating  functionalities  into   the   product   design   that   will   fully   satisfy   chosen   customers.   Strategic   positioning   of   a   business   is   the   responsibility  of  top  management,  a  process  that  would  benefit  greatly  from  the  QFD  logic  and  that  can   be  much  better  integrated  with  product  development.  In  this  paper  QFD  applied  to  strategic  positioning   and   business   development   is   presented   as   an   effective   handshake   between   business   and   product   development.   The   integration   of   QFD   thinking   in   strategy   development   is   instrumental   in   defining   a   strongly  differentiating  position  of  a  company  in  its  competitive  arena.       1. Introduction     Why   are   some   companies   capable   of   bringing   to   the   market   innovative   and   profitable   products   and   services   whilst   others,   even   with   high   investments   in   new   product   development   work   hard   but   fail?   Recent  investigations  show  that  there  is  no  direct  relation  between  investments  in  R&D  and  successful   innovation.  Success  factors  mentioned  instead  are  unique  combination  of  talent,  knowledge,  teamwork   structure,  tools  and  processes.  In  our  view,  important  as  these  factors  certainly  are,  what  really  sets  the   successful  innovators  apart  is  their  tight  and  transparent  cooperation  between  business  development,   marketing  and  sales,  R&D,  production  and  sometimes  purchasing  in  defining  the  key  target  customer   clusters   for   growth,   related   new   differentiating   propositions   and   the   way   these   departments   jointly   develop,  test,  produce  and  launch  them.    
  • Despite   its   small   size,   The   Netherlands   is   strong   in   research   and   development.   It   scores   high   on   the   scientific  citation  index  and  harbors  top  industrial  players  as  Philips,  ASML,  DSM,  AKZO  Nobel,  Shell  and   a  host  of  medium  and  small  technology  driven  companies.  Unfortunately,  as  also  shown  by  the  OESO   Innovation  Scoreboards,  the  scientific  and  technological  strength  of  too  many  of  these  companies  is  not   translated  into  new  winning  products  in  the  market.  Why?  There  are  multiple  reasons  why  of  course,   ranging  from  entrepreneurial  mind  set,  lack  of  critical  mass  to  funding  issues.  A  critical  aspect  that  will   be  elaborated  in  this  paper  is  the  extent  to  which  they  are  able  to  use  their  strong  technology  to  come   up  with  propositions  that  really  hit  the  bull’s  eye  of  important  customer  needs.  These  include  unfulfilled   manifest,   expressed   needs   and   hidden,   unexpressed   needs,   as   well   as   current   dissatisfiers.   Some   of   those  companies,  large  and  small,  are  strong  in  defining  their  future  business  position  and  role  in  the   industry  by  combining  in-­‐depth  customer  understanding  with  their  vast  technology  potential.  However,   the   majority   of  technology-­‐driven   companies   is   guided   too   heavily   by   the   narrow   lanes   of   their   past   business,  extended  with  their  view  on  technological  opportunities,  often  within  their  own  technology   domain.  As  a  result,  developed  products  do  not  hit  the  sweet  spot  of  the  customers’  top  priority  needs,   latent  or  manifest.  As  a  result  the  return  on  innovation  investment  is  too  low,  profit  margins  suffer,  cost   cutting   is   required,   innovation   budgets   are   lowered   and   the   trap   of   ending   up   with   a   portfolio   of   commodities  in  the  price  fighting  arena  goes  wide  open.     Interestingly,  many  of  those  organizations  apply  professional  methodologies  in  innovation  and  process   control,  in  The  Netherlands  especially  in  the  domain  of  Six  Sigma.  Those  methods  bring  structure  and   strong  discipline  in  the  development  and  production  floor,  they  create  professional  organisation  of  the   downstream   parts   of   the   business   processes.   Where   those   companies   fail   is   that   they   lack   a   similar   systematic   approach   in   the   upstream   part   of   the   business   processes:   the   multidisciplinary   business   definition,  differentiating  positioning  and  related  innovation  processes,  all  based  on  customer  insights   beyond  the  obvious  and  a  tight  multi-­‐disciplinary  effort  all  the  way  from  business  intelligence  to  feed   fact  based  strategy,  concept  development  to  after  sales  service  in  the  market.       In   this   article   the   importance   of   QFD   also   in   the   business   processes   preceding   and   guiding   product   development   teams   and   processes   will   be   presented.   Modern   QFD   methodology,   when   its   logic   and   tools  applied  for  a  strategic  positioning  and  business  development,  leads  to  key  insights  in  opportunities   for   truly   important   and   differentiating   value   creation   for   customers.   Next   to   that,   the   methodology   serves   as   a   strong   tool   in   establishing   a   solid,   well-­‐integrated   input   from   all   functional   disciplines.   It   serves  as  a  platform  for  a  joint  understanding  by  all  departments,  at  several  hierarchical  levels,  of  the   newly  chosen  business  position,  the  underlying  reasons  and  the  role  of  each  of  these  departments  in  the   detailed  planning  and  execution  of  the  resulting  business  development  and  innovation  efforts.     Applied  QFD  for  strategic  business  positioning  and  business  development  will  be  presented  in  a  case  of   business  development  and  innovation  project  of  one  midsize  high-­‐tech  company  from  the  Netherlands   that  is  a  global  leader  in  its  domain.  Because  of  the  confidentiality  agreement  still  valid  there  will  be  no   recognizable  references  to  the  company  nor  the  business  and  markets  they  are  in.  Several  new  products   developed  from  this  project  have  been  introduced  successfully  this  year  in  the  European  market.           2.  A  brief  look  in  history:  QFD’s  development  path  and  its  pioneers  [1]     Dr.Yoji  Akao  cites  the  rapid  growth  of  the  Japanese  automobile  industry  in  the  1960s  as  a  driving  force   behind  the  development  of  QFD[2].  With  all  the  new  product  development  drives  in  the  Japanese  auto   industry,  people  there  recognized  the  need  for  design  quality  and  that  existing  quality  control  process   charts  confirmed  quality  only  after  manufacturing  had  begun.  Dr.  Akao's  work  with  Kiyotaka  Oshiumi  of   Bridgestone  led  to  “Hinshitsu  Tenkai”  or  "Quality  Deployment,"  which  was  taken  to  various  companies  
  • with  little  public  attention.  The  approach  was  later  modified  in  1972  at  the  Kobe  Shipyards  of  Mitsubishi   Heavy  Industry  to  systematically  relate  customer  needs  to  functions  and  the  quality  or  substitute  quality   characteristics.   The   first   book   on   the   topic,   Quality   Function   Deployment   by   Akao   and   Mizuno,   was   published  by  JUSE  Press  in  1978.[3]     The   introduction   of   QFD   in   US   started   in   1983,   when   the   first   article   on   QFD   by   Kogure   and   Akao   appeared   in   Quality   Progress   magazine   published   by   the   American   Society   for   Quality   Control   (now   ASQ).[4]  From  that  moment  onwards,  things  spread  quickly.  Don  Clausing,  a  Xerox  employee  at  that   time,  first  learned  about  QFD  1984,  during  a  two-­‐week  trip  to  Fuji-­‐Xerox  Corporation,  a  Xerox  partner  in   Japan.  Clausing  had  already  become  interested  in  the  Robust  Design  methods  of  Dr.  Genichi  Taguchi,   who  was  a  consultant  to  Fuji-­‐Xerox.  During  his  stay  in  Japan,  Clausing  met  another  consultant  to  Fuji-­‐ Xerox,  Dr.  Makabe  of  the  Tokyo  Institute  of  Technology.  Clausing  would  play  an  instrumental  role  in   spreading  Makabe’s  approach  to  QFD  to  the  USA.     In   1984,   Larry   Sullivan   of   Ford   Motor   Company   organized   an   internal   company   seminar   at   which   Clausing  was  invited  to  present  QFD.  Sullivan  immediately  grasped  the  importance  of  the  QFD  concept   for  Ford  and  began  promoting  it  internally.  Clausing  continued  to  promote  QFD,  Taguchi's  methods,  and   Stuart  Pugh's  concept-­‐selection  process  at  conferences  and  seminars.  When  Clausing  joined  the  faculty   at  MIT,  he  developed  a  semester-­‐length  graduate  course  that  unified  these  methods  along  with  other   concepts   into   a   system   for   product   development   that   eventually   became   called   "Total   Quality   Development."  Many  of  his  students,  already  working  as  senior  managers  and  engineers  at  large  U.S.   companies,  returned  to  their  jobs  and  spread  his  concepts  within  their  companies.     The  spreading  of  QFD  then  took  the  fast  lane  by  become  a  quality  assurance  parameter  for  suppliers  to   large  companies.  Larry  Sullivan  founded  the  Ford  Supplier  Institute.  This  was  a  Ford  Motor  Company   organization   aimed   at   steering   Ford's   suppliers   to   improve   the   quality   of   the   components   they   developed  for  Ford.  Sullivan  and  others  at  Ford  gained  a  detailed  understanding  of  QFD  by  working  with   Dr.  Shigeru  Mizuno  and  Mr.  Akashi  Fukahara  from  Japan,  at  which  the  coauthor,  Mazur,  provide  onsite   translation.   Eventually   Ford   came   to   require   its   suppliers   to   use   QFD   as   part   of   their   development   process,  and  the  Ford  Supplier  Institute  provided  training  in  QFD  appropriate  for  automotive  suppliers.   The   Ford   Supplier   Institute   eventually   became   an   independent   nonprofit   organization,   the   American   Supplier  Institute  (ASI).  ASI  became  a  major  training  and  consulting  organization  for  QFD  and  has  trained   thousands  of  people  in  the  subject.     At   the   invitation   of   Bob   King,   Akao   came   to   Massachusetts   and   conducted   a   workshop   on   QFD   in   Japanese  with  simultaneous  translation  into  English.  Akao  conducted  a  second  workshop  in  June  1986,   also  under  the  auspices  of  GOAL/QPC.  For  this  second  workshop,  GOAL/QPC  had  the  coauthor,  Mazur,   translate  a  series  of  papers  on  QFD,  including  several  case  studies.  This  translation  was  later  published  in   book  form  [5]  Eventually  this  collection  of  QFD  papers  became  what  remains  the  standard  advanced   book   on   QFD.   In   1987,   GOAL/QPC   published   the   first   full-­‐length   book   on   QFD   in   the   United   States:   Better  Designs  in  Half  the  Time,  by  Bob  King[6]       In  June  1987,  Bernie  Avishai,  associate  editor  of  Harvard  Business  Review,  asked  Don  Clausing  to  write   an  article  on  QFD.  Clausing  felt  that  the  paper  should  be  given  a  marketing  perspective,  and  he  invited   John  Hauser  to  coauthor  it.  Hauser  had  become  intrigued  with  QFD  after  learning  about  it  from  a  visit  to   Ford.  The  article,  published  in  the  May–June  1988  issue  of  the  Harvard  Business  Review,  has  become   one   of   the   publication's   most   frequently   requested   reprints.   That   article   probably   increased   QFD's   popularity  in  the  United  States  more  than  any  other  single  publication  or  event.     In  early  90s  Honeywell  (at  that  time  AlliedSignal)  adapted  QFD  approach.  Early  examples  at  that  time   included  Toyota  Motors'  QFD  processes.    
  •   In  1993  the  QFD  Institute  was  sanctioned  by  Dr.  Yoji  Akao  QFD’s  co-­‐founder,  to  research  and  develop   state-­‐of-­‐the-­‐art   methods,   tools,   and   training.   Today,   the   QFD   institute   presents   a   pivoting   point   to   inspire   strong   interest   for   QFD   around   the   world   generating   ever-­‐new   applications,   developing   new   advanced  tools  and  supporting  companies  in  various  application  domains  of  QFD.  It  is  the  only  dedicated   QFD  education  and  advanced  research  organization  in  the  world.  Based  on  this,  it  has  developed  several   new   QFD   tools   and   methods   that   reduce   the   complexity   of   initiating   and   sustaining   QFD   implementation.  These  new  tools  and  methods  are  applicable  to  any  industry  type,  including  hardware,   software,  service,  and  healthcare,  and  are  core  to  their  QFD  Green  Belt®,  QFD  Black  Belt®,  and  QFD   Master  Black  Belt®  courses.  The  QFD  Institute  is  the  U.S.  representative  to  the  International  Council  for   QFD  which  has  held  international  QFD  Symposiums  to  this  day  in  the  U.S.,  Japan,  Sweden,  Germany,   Australia,  Brazil,  Turkey,  and  China.       3.      Looking  forward:  QFD  as  a  framework  for  defining  a  business  that  makes  a   difference     The   main   application   of   QFD   is   in   product   development.   Companies   use   QFD   as   a   basis   for   multidisciplinary  product  development,  in  order  to  come  up  with  products  that  hit  specific  customers  in   the  core  of  their  needs,  needs  they  were  sometimes  unaware  of.  There  is  no  better  way  to  differentiate   a  product  and  create  strong  customer  preference.       QFD  however,  can  have  an  equally  strong  impact  on  the  quality  of  strategic  business  positioning.  In  this   complex  domain,  the  mental  framework  and  logic  of  QFD  adds  great  value.  The  same  way  QFD  takes   product   development   to   a   much   higher   level   of   sophistication   and   competitive   impact,   QFD   can   be   instrumental   in   defining   a   strongly   differentiating   position   of   a   company   in   it’s   competitive   arena,   addressing  customer  needs  other  companies  failed  to  identify  or  properly  translate  into  attractive  value   propositions.     Defining  new  strategic  business  positioning  is  all  about  doing  different  things  than  rivals  do  and/or  doing   things  differently,  with  superior  impact  on  customer  needs  at  competitive  cost  levels  or  better.  Without   differentiation  in  its  offerings,  in  an  open  market,  any  company  risks  drifting  into  a  price  war  arena.   There,  only  a  superior,  lower  cost  supply  chain  can  save  the  margins.  Key  and  starting  point  in  this  whole   game  of  smart  differentiation  is  a  superior  understanding  of  (future)  customer  needs.     The  logic  of  QFD  in  competitive  positioning  is  equal  to  that  of  QFD  applied  in  product  development,   where  Voice  of  the  Customer  is  a  powerful  tool  to  discover  manifest  and  latent  customer  needs,  the   starting  point  for  product  differentiation.  In  the  very  same  way,  at  the  level  of  the  company,  applied   QFD  has  a  focus  on  discovery  of  new  attractive  markets.  It  searches  for  specific  customer  groups’  unmet   needs  (existing  ones  or  new  ones  creates  by  changes  in  the  environment  of  the  customer),  in  order  to   find  new  business  opportunities.  These  business  opportunities  are  defined  as  new  customer  clusters  – functionalities   combinations.   By   defining   and   serving   those   new   customer   cluster–functionalities   combinations  well,  a  company  obtains  a  new  and  differentiating  role  in  industry.  A  good  example  is  the   way   Apple   redefined   its   business   by   adding   music   on   the   move   at   an   excellent   quality   level   and   unequalled  user-­‐friendliness  to  its  portfolio  with  the  launch  of  the  iPod  in  October  2001.  The  slogan  that   accompanied  the  launch  of  the  iPod  1,  “1,000  songs  in  your  pocket”,  at  that  time  was  an  unparalleled   capacity,  and  says  it  all.  Earlier,  in  1982  Philips  and  Sony  made  a  similarly  large  step  in  that  domain  when   they   changed   the   music   industry   with   their   launch   of   the   audio   CD.     Whilst   some   observers   claimed   another  “technology  push”  by  Philips,  this  company  in  fact  had  carefully  mapped  a  great  new  business   domain  of  customer  groups  with  a  high  (latent)  need  for  music-­‐on-­‐the-­‐move,  direct  track  access,  no  loss   of  quality  over  time,  easy  handling  media  and  so  forth:  latent  customer  needs  that  Philips  understood  
  • really  well  and  that  were  leading  in  the  concept  design.  Already  in  the  early  80s,  within  Philips,  QFD  was   used   extensively   in   a   strong   co-­‐operation   between   the   Consumer   Electronics   division.   Corporate   Strategic  Planning,  Corporate  Innovation  and  Total  Quality  Management  [8].       As   indicated   above,   QFD   at   the   level   of   company   positioning   and   strategy   definition   has   many   similarities  with  the  application  of  QFD  in  product  development  because  the  same  logic  applies.   The  Voice  of  the  Customer  (VOC)  at  a  business  development  level  is  more  a  “Voice  of  the  Market”  and  is   used  to  gather  relevant  business  information  for  the  new  business  positioning.         Strategy   and   business   development   obviously   looks   broader   than   product   development.   A   company   embedding  QFD  in  its  strategy  development  performs  a  first  level  VOC  by  carefully  scanning  the  future   arena  for  new  developments  that  might  impact  the  business  and  therefore  the  needs  of  its  customers.  It   scans  across  domains  like  technological  developments,  market  trends,  demographic  changes,  political   and  regulatory  development,  raw  materials  availability  and  many  others  to  find  out  how  the  customers   business   will   change   and   what,   as   a   result,   will   be   future   qualifiers   for   the   own   company   to   be   in   business  and  what  will  be  differentiators  that  will  enable  the  company  to  gain  customers’  preference.     The   key   for   strategic   business   positioning   remains   the   intimate   understanding   of   customers’   (future)   needs.  At  business  development  level  this  is  done  via  a  number  of  iterations,  going  from  a  broad  need   analysis   to   a   first   rough   clustering   of   customers   with   similar   needs,   to   a   sharper   need   analysis,   to   a   sharper  customer  clustering  and  so  forth.       Usually   the   key   value   creating   insights   of   the   “Voice   of   the   Market”   are   first   gathered   in   an   overall   positioning,  the  Strategic  Intent.  This  describes  the  future  role  of  a  company  in  the  industry  in  terms  of   What   (value   offering),   For   Whom   (target   customers)   and   How   (the   specific   business   formula   and   underlying  profit  model).  No  nice  marketing  slogans,  but  a  “technical”  description  of  a  unique  role  in  the   industry   for   internal   use.   This   Strategic   Intent   is   then   acid   tested   on   the   aspects   of   competitive   differentiation  and  the  defensibility  of  this  differentiation.  The  Strategic  Intent  is  an  important  waypoint   further   down   the   timeline.   However,   this   rough   position   is   nowhere   near   the   precise,   more   tangible   business  definition  required  to  actually  steer  business  development.  Business  development  needs  much   better  described  market  segments,  analysis  of  segment  attractiveness,  defined  priorities  in  the  market   attack,  a  clear  sequence  over  time  on  what  segments  to  conquer  first,  what  segments  two  years  later   and  so  on.     In  other  words,  to  sharpen  the  strategy  the  future  playing  field  of  the  company  must  be  defined  in  much   more  detail.  The  way  to  do  this  is  by  defining  the  so-­‐called  Strategic  Grid.  The  Strategic  Grid  is  the  core   element  in  any  strategic  business  positioning  process.    The  Strategic  Grid  is  matrix  that  combines  the   future   Customer   Clusters   (in   the   rows)   with   the   future   Value   proposition   (Functionality   Clusters)   the   company  will  offer  (in  the  columns).  The  Strategic  Grid  describes  the  (future)  playing  field  in  a  precise   way.  It  serves  as  a  frame  of  reference,  not  only  for  product  and  process  innovation,  but  also  for  day-­‐to-­‐ day  commercial  decisions.       The  Strategic  Grid  forms  the  industrial  signature  of  the  company.  This  particular  matrix  is  the  business   DNA  of  the  company.  Determining  the  Strategic  Grid  takes  a  good  mix  of  imagination,  creative  thinking   and  solid  analysis.  Once  defined,  it  is  the  presentation  of  how  a  company  perceives  and  understands  its   customers,  their  needs  and  the  value  propositions  that  are  unique  ways  of  fully  fulfilling  these  needs,   gaining  a  strong  customer  preference.    
  • 4.      Project  example:    applied  QFD  for  strategic  business  positioning,  business  development   and  product  development     Application   of   QFD   in   strategic   business   positioning   and   business   development   is   presented   here   through  a  case  of  one  of  our  projects.  Our  customer,  a  Dutch  mid  size  high-­‐tech  company  applied  QFD  in   all  three  development  domains:  strategic  business  positioning,  business  development  and  new  product   development.  The  Project  was  run  for  two  years  and  main  results  were:   • Clear,  precise,  on  the  customer  group  level,  business  position  for  next  3  years   • Product   development   project   focused   on   top   priority   customer   needs   targeting   the   highest   profit  level  of  the  business.   • Complex  product  design  with  complete  set  of  requirements.     • Definition  of  the  sub-­‐modules,  next  generation  product  development  projects,  with  clear  targets   in  the  market  and  differentiating  value  proposition.   • Full  understanding  on  all  organization  level:  why,  what  and  for  whom  this  project  is  important     • Full  support  of  the  management  team   • Effective  communication  and  fast  decision  processes   • Introduction   of   the   QFD   as   the   leading   methodology   and   set   of   tools   for   the   systematic,   multidimensional  development  approach  on  business  and  product  level.     In  order  to  start  the  strategy  and  business  development  with  a  realistic  view  on  the  starting  point,  an   analysis  was  made  by  the  strategy  team  of  the  companies’  current  position  in  the  international  markets   and  its  position,  role  and  profit  share  in  the  industry  chain.  This  led  to  important  insights  for  the  strategy   development,   a   host   of   house-­‐in-­‐order   actions   and   identification   of   some   “low   hanging   fruit”   in   the   market.     As   a   next   step,   QFD   tools   and   logic   were   introduced   to   the   strategy   team   in   the   early   phase   of   the   market   attractiveness   investigation   by   applying   VOC   focusing   on   scanning   for   new   needs   that   would   provide   the   handles   for   building   new   differentiation   in   the   market.   VOC   at   the   level   of   business   development  (earlier  referred  to  as  “Voice-­‐of-­‐the-­‐Market”)  we  called  “VOC  first  round”.  Interviews  are   carried  out  throughout  the  industry  chain  by  a  team  consisting  of  marketing,  business  development  and   product  development  team  members.  An  alternative  approach  is  to  “walk  around”  the  organization  and   its  customers  to  look  for  unmet  future  opportunities.  The  main  focus  was  on  discovering  unaddressed   and  hidden  customer  needs  by  looking  at  them  from  many  angles:  customers  themselves,  consultants,   installers,   software   companies   and   so   on.   New   “need   pockets”   were   then   analyzed   with   respect   to   proper  market  segmentation,  segment  size  and  value,  the  company’s  relative  strength  to  come  up  with   unique   solutions,   best   suited   business   models,   attractiveness   level   of   the   segments,   qualifiers,   differentiators,   risks   etc.   Interviews   started   explorative,   and   changed   to   a   more   validating   character   (checking  hypothesis).  In  the  first  round,  many  product-­‐related  verbatims  also  were  collected  and  stored   into  the  customer  database.       Interview  structure  :     Figure  1:      Structure  and  sequence  of  the  conducted  interview  
  •     In  total  29  interviews  were  conducted  with  local  and  international  customers  resulting  in  1200  customer   verbatim.  Example  of  the  consolidated  information  regarding  market  trends  and  requirements  for  the   two  most  important  market  segments  is  presented  in  the  table  below.       Table   1:   Part   of   the   summary   table   of   the   consolidated   statements   regarding   market   trends   and   requirements.   As  a  next  step,  the  customer  needs  were  analyzed  and  cluster  with  respect  to  satisfaction  level,  unmet   needs  and  future  differentiators  of  a  specific  customer  group  related  to  two  market  segments  (see  table   below).     Table   2   Satisfaction   level,   unmet   needs   and   future   differentiators   from   different   customer   groups   regarding  our  business  and  others   The  insights  delivered  by  the  “Voice  of  the  Market”  analysis  eventually  led  to  two  important  pillars  of   the  company’s  strategy.  Pillar  one  was  the  grouping  of  customers  with  coherent  needs  into  customer   clusters   that   could   be   specifically   approached.     Pillar   two   was   the   definition   of   key   functional   value   propositions,  each  important  to  a  broad  group  of  customers,  fulfilling  needs  that  hitherto  had  not  are   only  partly  been  addressed  by  the  company  and  its  rivals.  Those  two  dimensions  together  formed  the   (future)   Strategic   Grid,   the   playing   field   of   the   company.   Not   just   a   description   of   product   market   combinations,   but   a   fresh   way   of   looking   a   customer   needs   and   clusters   and   the   definition   of   new   unique  future  value  offerings,  the  signature  of  the  future  identity  of  the  company.          
  •                   Figure  2:      Strategic  grid   Once   the   Strategic   Grid   was   defined,   the   next   iterations   for   refinement   started   and   the   product   development   projects   were   defined.   QFD   tools   as   the   business   objectives   and   goals   table,   business   goals-­‐market  segment  matrix  and  project  goals  tables  were  applied  for  the  project  definitions,  now  with   relevant   business   development   information   already   included.   All   defined   projects   were   mapped   and   prioritized  with  the  selected  criteria.  When  the  top  priority  projects  were  selected,  QFD  for  business   development  made  an  elegant  handshake  with  QFD  for  product  definition.    The  figure  below  describes     the  process  flow:  from  the  current  business  position  and  strategic  grids,  to  the  new  project  definition  for   the  realsition  of  the  new  strategic  business  position  is  presented.      
  •   Figure  3:      Process  flow:  from  the  current  business  position  and  strategic  grids,  to  the  new  project   definition  for  the  realisation  of  the  new  strategic  business  position     QFD  in  product  development   With   value   offerings   on   a   functional   level   well   defined,   the   hand-­‐over   to   the   stage   of   product   development   domain   started   with   the   deeper   understanding   of   the   targeted   customer’s   needs.   The   process   of   VOC   focused   on   the   product   development,   what   we   called   “VOC   second   round”,   was   conducted   further   with   a   multidisciplinary   team   consisting   of   a   project   manager,   the   responsible   marketing   manager,   a   product   development   manager,   a   product   requirement   engineer   and   the   R&D   manager.  At  this  level  the  broad  range  of  sources  from  interviews  with  customers,  potential  customers,   customers  of  the  customers,  other  players  in  the  chain,  customer  complaint  records,  meeting  reports   from  earlier  meetings  are  used  to  add  information  to  the  first  round  database  focusing  on  the  technical   characteristics.  After  conducting  the  VOC  second  round,  a  cascade  of  QFD  common  tools  and  matrices   start  `with  Customer  Needs  Affinity  diagram  (CN  AD).    The  process  flow  is  presented  in  the  Figure  below.       Strategic  business  positioning  and  business  development  
  •     Figure  4:      Process  flow:  from  the  VOC  to  the  DPT  and  AtS  table     The  first  link  back  to  the  generic  market  information  gathered  in  the  VOC  first  round  was  integrated  in   the  Design  Planning  table  (DPT).  Customer  needs  were  assigned  and  additionally  prioritized  based  on   the   level   of   satisfaction   current   solution   in   the   market   is   offering   to   the   selected   customers.   Five   different  types    /  levels  of  the  importance  of  the  customer  needs  were  linked  to:  satisfier,  dissatisfier,   differentiator,   unaddressed   need   and   not   relevant.   The   high   values,   corresponding   to   the   biggest   business  opportunity  were  given  to  the  dissatisfiers  and  unaddressed  needs  and  the  low  values  were   given  to  the  needs  already  satisfied  with  differentiating  propositions.  In  the  figure  below,  modified  DPT   is  presented.       Product  development  
  •                               Figure  5:    Modified  Design  Planning  Table   The   loop   of   current   business   –     strategic   business   position   –   business   development   and   market   opportunities  –  product  development  and  design  is  closed  with  the  Potential  Business  Value  Creation   where  the  product  design  features  are  linked  to  the  value  to  customer  and  value  to  business.  The  linking   table   between   strategic   business   position   and   product   design   is   the   so-­‐called   Alignment   to   Strategy   table.  In  this  table  all  major  business  aspects  impacted  by  the  new  product  design  are  weighted.  The   criteria  used  is  defined  in  three  domains:                              Figure  6:      Alignment  to  strategy  table  (AtS)     1. Added   value   to   the   customer   in   functional  domain  of:     • accessibility   • availability   • controllability   • quality   • reliability   • safety   • scalability   • serviceability   2. Alignment  to  current  business:     • fit  with  current  business  model   • fit  with  current  network:   • fit  with  current  customer  base   • fit  to  current    operations     • fit  with  current  core  competencies   3. Technical  feasibility   • Competitive  advantage   • Technical  Challenge   • Synergy  with  other  business  units   • Fit  to  current  product  portfolio    
  • The  Product  Design  Document  was  officially  handed  over  to  the  requirements  engineers  and  mechanical   and  software  engineers  when  the  Alignment  to  Strategy  (AtS)  table  was  accepted  by  the  management   team.   After   this   project,   QFD   became   a   mandatory   approach   for   all   development   projects   in   this   company.     Further  project  steps,  like  the  Market  Attack,  are  not  described  in  this  article.       Conclusions     Many  medium  and  small  technology  driven  companies  in  the  Netherlands  are  putting  lots  of  effort  into   adapting  professional  methodologies  in  innovation  and  process  control  especially  in  the  domain  of  Six   Sigma.  Those  methods  bring  structure  and  strong  discipline  on  the  development  and  production  floor.   However,  they  almost  totally  lack  a  systematic  approach  in  the  upstream  part  of  the  business  processes.   QFD   applied   on   the   level   of   strategic   business   positioning   and   business   development   creates   multidisciplinary  business  definition,  differentiating  positioning  and  related  innovation  processes.  In  this   way  technical  creativity  and  new  product  development  capabilities  are  enablers  in  for  the  realization  of   the  future  business  model  and  further  positioning  in  the  market.             About  the  Authors:       Biba  Visnjicki  started  her  professional  career  at  “Stark”  company  in  Serbia  as  a  product  and  business   developer.   In   1998   she   become   regional   Managing   Director   of   Mobile   Oil   for   the   former   Yugoslavia   region.  After  finishing  PhD  studies  she  joined  Demcom  Twente  B.V.  as  Business  Development  Manager   focusing  on  advanced  methodologies  for  business  and  product  development  practice.  She  received  a   PhD   for   her   research   on   renewable   energy   production   from   biomass   at   the   University   of   Twente’s   Faculty  of  Science  and  Technology  in  the  Netherlands.  She  received  QFD  Black  Belt®  status  at  the  QFD   Institute  of  America.  Biba  joined  Qanbridge  in  2008  and  focuses  on  Fast  track  business  development  and   QFD   In   2008   Biba   has   founded   Coddel,   a   company   dedicated   to   real-­‐life   training   and   coaching   of   professionals  in  marketing,  business  development  and  modern  QFD.(www.coddel.nl)       Tjerk  Gorter  started  his  professional  career  at  Philips  Electronics,  working  in  the  field  of  pre-­‐competitive   research   cooperation,   optoelectronics   and   real-­‐time   software   engineering.   After   6   years   he   founded   Createch,  which  focused  on  the  development  of  decision  support  software.  As  a  partner  in  Rijnconsult   he  was  responsible  for  Industry  and  Technology  in  the  group  Topstructure  and  Strategy.  He  focused  on   strategy   development   for   players   in   the   chemical,   technical   fibers,   machine   building   and   diagnostics   industry.   In   1999   he   joined   Friesland   Foods   as   Director   Corporate   Innovation   and   Technology,   with   global   responsibility   for   innovation   and   technology   management,   Corporate   Research,   strategy   development  and  business  intelligence.  As  a  member  of  the  Innovation  and  Technology  Committee  of   VNO-­‐NCW  he  became  actively  involved  in  national  innovation  efforts.  He  has  built  four  of  the  private-­‐ public  technology  programmes.  In  2005,  Tjerk  founded  Qanbridge  in  2005  as  a  vehicle  to  support  fast   track  business  development,  with  an  emphasis  on  companies  creating  technology  solutions  that  enable   the  development  of  sustainable  businesses.  Tjerk  is  co-­‐founder  of  PamGene  a  biomarker  company,  V-­‐ Square,  a  company  specialized  in  the  production  of  medical  and  clinical  nutrition  and  IonTag,  a  starter   company   that   has   developed   unparalleled   IMS-­‐based   sensoring   technology   to   “sniff”   molecules:  
  • explosives,  narcotic,  toxics,  air  quality.  Tjerk’s  current  roles  in  Dutch  innovation  include:    Member  non-­‐ executive  board  for  Food  &  Nutrition  Delta,  Member  Supervisory  Board  Technology  Foundation  STW,   progamme   director   of   AMMON,   the   regional   industry-­‐led   innovation   program   for   the   Eastern   Netherlands.         Glenn  H.  Mazur  has  been  active  in  QFD  since  its  inception  in  North  America,  and  has  worked  extensively   with   the   founders   of   QFD   on   their   teaching   and   consulting   visits   from   Japan.   He   is   a   leader   in   the   application  of  QFD  to  service  industries  and  consumer  products,  conducts  advanced  QFD  research,  and   is  the  Conference  Chair  for  the  annual  North  American  Symposium  on  Quality  Function  Deployment.   Glenn  is  the  Executive  Director  of  the  QFD  Institute  and  International  Council  for  QFD,  retired  Adjunct   Lecturer   on   TQM   at   the   University   of   Michigan   College   of   Engineering,   President   of   Japan   Business   Consultants  Ltd.,  and  is  a  senior  member  of  the  American  Society  for  Quality  (ASQ),  and  the  Japanese   Society  for  Quality  Control  (JSQC).  He  is  a  certified  QFD  Red  Belt®  (highest  level),  one  of  two  in  North   America.  He  is  a  certified  QFD-­‐Architekt  #A21907  by  QFD  Institut  Deutschland.  He  is  convenor  of  the   Working  Group  2  of  the  Technical  Committee  69,  Subcommittee  8  to  write  the  international  standard   for  QFD  (ISO-­‐16355).  He  is  an  academician  of  the  International  Academy  for  Quality.           References:   1. J.P.  Ficalora,  L.  Cohen,  “What  are  QFD  and  Six  Sigma?”  .  INFORMIT,  2009   2. Yoji  Akao,  “QFD:  Past,  Present,  and  Future,”  paper  presented  at  the  International  Symposium  on   QFD  (1997).   3. Shigeru   Mizuno   and   Yoji   Akao,   eds.,   Quality   Function   Deployment:   A   Company-­‐wide   Quality   Approach  (Tokyo:  JUSE  Press,  1978).   4. Masao   Kogure   and   Yoji   Akao,   “Quality   Function   Deployment   and   CWQC   in   Japan,”   Quality   Progress  16,  no.  10  (1983):  25.   5. Yoji   Akao,   Quality   Function   Deployment:   Integrating   Customer   Requirements   into   Product   Design,   trans.   by   Glenn   H.   Mazur   and   Japan   Business   Consultants,   Ltd.   (Cambridge,   Mass.:   Productivity  Press,  1990).   6. King,  Better  Designs.   7. QFD  Institute  of  America  http://www.qfdi.org   8. 1985-­‐1991   Personal   experience   and   knowledge,   Tj.   Gorter,   Member   of   Research   consortia,   technology  and  innovation  management  at  PHILIPS