1Quality and InnovationJune 20, 2013Juhani AnttilaInternational Academy for Quality (IAQ)Helsinki, Finlandjuhani.firstname.lastname@example.org , ww.QualityIntegration.bizThese pages are licensedunder the Creative Commons 3.0 Licensehttp://creativecommons.org/licenses/by/3.0(Mention the origin)
2xxxx/21.11.2009/janQuality and innovation as business management disciplines:1. From discrete evolution to organizational integration2. Innovation, a tradition in quality management3. Innovation measures aim at quality4. Innovations in technology, products, and quality management5. People as the primary source of innovation6. Quality and innovation integration7. Organizational learning for innovation in quality and quality in innovation8. ConclusionsQuality and Innovation
31. From discrete evolutionto organizational integration
4QualityQuality and Innovation: Disciplines for the benefits oforganizations and society Evolution and realization3984/3.3.2013/jan InnovationShewhart 1924Ichikawa 1962Feigenbaum 1945Deming 1947Juran 1935Modernquality activistsTarde 1903Role modelorganizationsGreat inventorsModern technologicalinventionsSchumpeter 1939Technological innovationsRogers 1962Social innovationsIntellectual PropertyRightsCollaborativeinnovationThe disciplines have evolved in isolationfrom each other.Quality and innovation are realized forthe benefits of organizations and societyThere are only few substantial cross-references between the disciplines.Global, national andregional movementsAncient qualityachievementsAncient innovationachievementsNational and regionalmovements,ISO standardization 1979
5Relationships of quality and innovationin theory and practice?3990/3.1.2013/janDiscipline’sevolutionContentualrelationsIntegrationin businessesAn organization’sbusiness managementQ Q QI I IContentual elements of the disciplines (quality & innovation)?Quality management & Innovation management?
62. Innovation, a tradition in quality management
7What is QUALITY all about?The concept quality is according to thestandard ISO 9000 associated with thefollowing things:– Item to be addressed from the qualitypoint of view– Inherent characteristics of the item– Degree that the item possessesparticular characteristics– Fulfillment – requirements characteristics– Requirements - needs andexpectations, general / specific, stated/ implied– Interested parties(*) related to the itemIn the relationship with the interested parties,quality is for :– Win / Win operational principle– Satisfaction, net value to all partiesIn competitive business environments, thedegree requirement is:– ExcellenceNon-Quality includes:– Defect – non-fulfillment of the needs andexpectations– Nonconformity – non-fulfillment of thestated requirement specifications2482/17.4.2013/jan”degree to which a set of inherent characteristics fulfils requirements”(*) In general interested parties of an organization include customers, owners, people in anorganization, suppliers, bankers, unions, partners, society, etc. This gives a very widemeaning and coverage to the quality concept.
8The pursuit of WOW!- T. Peters 1994”...stepping out (individuals at all level in a firm and independentcontractors) and standing out (corporations and otherorganizations) from the growing crowd of look-likes...”0014/26.3.2013/janIn search of excellence- T. Peters 1982A passion for excellence- T. Peters 1985Striving for excellence(*) Tom PetersINNOVATIONREQUIRED!
9Innovation is an old tradition and a new challengein quality management3989/3.1.2013/janQuality (in an organization’s business connection) =• degree to which the organization’s products (goods and services) fulfillrequirements of the customers and the market place (ISO 9000)Organizations compete with each other by the quality of their products and efficiencyof 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 inherentlybeen in professional quality practices already decades.• However, we have not got much innovations in the quality methodologies. Thisis a crucial challenge to the quality professionals.
10Innovation in the ISO 9004:2009 standard for thesustained success of an organization3985/3.1.2013/janThe sustained success of an organization is demonstrated by its ability to satisfy theneeds and expectations of its customers and other interested parties, over the longterm and in a balanced way. This can be achieved through• Awareness of the organizations environment• The effective management of opportunities and risks• Learning from experience• Application of improvement and innovationInnovation can be applied to issues at all levels, through changes in• Technology or product• Processes• The organization• The organizations management systemIn the context of quality management, innovation is linked with improvements andorganizational learning.
11Fundamental concepts, core values, andprinciples for good management3009/3.4.2013/janISO 9000 – Quality management principles:• Customer focus• Leadership• Engagement and competence of people• Process approach• Improvement• Informed decision making• Relationship managementEFQM - Fundamental concepts:• Adding value for customers• Creating a sustainable future• Creating organizational capability• Harnessing creativity & innovation• Leading with vision, inspiration & integrity• Managing with agility• Succeeding through the talent of people• Sustaining outstanding resultsMalcolm 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 perspectiveEach organization defines its goodmanagement principles fromorganization’s own business point of view.These general principles may helporganization in this task.
12Innovation is a central topic in the performanceexcellence models (Example Malcolm Baldrige model)4047/2.2.2013/janInnovation ensure the organization succeed now and in the future:• The opportunities that affect the organization’s competitive situation includeinnovation and collaboration.• The key elements of the organizational performance improvement includeevaluation, organizational learning, and innovation processes.Requirements for innovation:• Technological and organizational innovation in products, operations, and thebusiness model• Rate of innovation and rapid innovation(Ref.: Malcolm Baldrige criteria)
13Forces of change - Shaping the future of quality1. Global responsibility2. Consumer awareness3. Globalization4. Increasing rate of change5. Workforce of the future6. Aging population7. 21st century quality8. InnovationThe sixth future study of the American Societyfor Quality in 20113986/2.1.2013/janEmergence to the futureQuality profession is striving 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
143. Innovation measures aim at quality
15All innovations are for quality improvements!3991/3.1.2013/janThere 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. In simple words, innovation means improved quality.All business innovations directly promote the basic intentions of quality management toimprove product performance, increase the efficiency of business processes, and makepossible organizations’ radical structural and operational transformation and reforms. All these topics are basic intentions of the professional quality management.
16Innovations for unique business solutionsWhat are innovations about?1804/2.1.2013/janWhatHowNewNewOldOldInnovations are for improving theperformance of products, andbusiness structures and processes.From organization’s performancepoint of view “How” is more importantthan “What”.I1 I2I3Old
17Conceptual elements of innovation3982/3.1.2013/janHistorical 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 innovationThe Vocabulary of Innovation:ACT SOURCE EFFECTSImitation Inspiration CultureInvention Ingenuity CivilizationDiscovery Curiosity EvolutionExperiment / Investigation Imagination Modernity/ProgressInitiative Reason (logic) AdvancementPraxis/action ImprovementChange DevelopmentCreation/Creativity RevolutionProductionNovation / Innovation Novelty(Ref.: Benoît Godin)Quality aspects are here implicitly included.
18World-wide innovation movements4048/3.1.2013/janGlobal contributions to innovation:• OECD, The Organisation for Economic Co-operation and Development The contribution of innovation toeconomic growth and well-being• WIPO, World Intellectual Property Organization Annual World Intellectual Property Day(April 26) Promoting innovation and creativity for theeconomic, social and cultural developmentin all countries Celebrating the contributions made byinnovators and creators Ensuring intellectual property (patents,copyright, trademarks, designs, etc.) as ameans of stimulating innovation andcreativityRegional innovation movements• EU: The Innovation Union, Horizon 2020 Boosting research and innovation in themember statesNational innovation movements and systems• USA, Finland, Estonia, China, India, etc. National innovation strategies and policiesUnderstanding the role of large scaleinnovation movements:• Primarily the movements focus onresearch and product and technologydevelopment, industrial R&D(improved products and processes),and on the intellectual property rights(IPR).• A national innovation system is notany system (or it may be only politicalrhetoric), but a concept for anemergent network of variousindependent actors (public or private).• Real innovations are created byindependent individual inventors andorganizations or through theircollaboration in networks.• There is no remarkable collaborationbetween quality and innovationprofessionals in these movements.
19Example:Innovate AmericaGlobal, national and regional movementsimplicitly underline quality aspects3987/3.2.2013/janAlthough there are muchquality aspects emphasizedin these programs, however,typically quality expertshave not been involvedwith these activities.
204. Innovations in technology, products,and quality management
21Product and technology innovationsin quality management3992/3.1.2013/janA competitive product quality (product excellence) is based on technology and productinnovations. In quality management, this is a crucial issue in managing the business processes related with(ISO 9004):- product realization- acquisition of new technologiesAccording 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 lifecycles
22Technology and innovation1983/2.1.2013/janTechnology:- Processes by which an organization transforms labor, capital, andinformation into products (goods and services) to provide value for interestedparties (stakeholders)(This concept of technology extends beyond engineering andmanufacturing to encompass a range of marketing, investment, andmanagerial processes. It also includes quality management)Innovation:- A change in one of the technologies(Ref.: Christensen)
23Value networks, the basis for technology innovation1988/2.2.2013/janOrganizations’ 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 competencesThe concept of value network, however, has actually much greater power to createbenefits of new technologies and to avoid stumbling when confronting technologychange.(Ref.: Christensen)
24Sustaining versus disruptive technology1984/2.1.2013/janSustaining 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 propositionthan 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)
25The impact of sustaining and disruptivetechnological innovations1986/2.1.2010/jan (Ref.: Christensen)PerformanceTimePerformance demandedat the high end of the marketDisruptivetechnologicalinnovationPerformance demandedat the low end of the marketProgress due tosustaining technologies
264026/20.3.2013/janNew technologies have essential impacts onproduct characteristics and the effectivenessand efficiency of the related processes. Thesetechnologies include: Information technology Biotechnology Nano- and microtechnology Optical technology Energy technology Social technology Etc.Technology challengesWe have been involved with the followingexamples of the ICT (information andCommunication technology): Radio frequency identification(RFID) Ubiquitous information technologyInternet internet of things (IoT) andmachine-to-machine applications Mobile payment technology Cloud services Mashup products.In addition to the impact on quality of products, the new technologies also have challenginginfluence e.g. on environmental, social, safety and security performance, including: Environmental protection Information security Health risks
27Quality management: Challenges to innovation3993/3.2.2013/janDue 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.TimeSpeedChangesAgilityComplexityDiversityImmaterialnessVariety(of business environment)Businessenvironmentsand societyProblemQuality professionA crisis of quality profession due to the lack of innovations in the quality management principles,tools, and infrastructures with regard to the changes in organizations’ business environments.Are there any real innovationscreated for organizations qualityimplementations after Deming,Ichikawa, Juran, and Feigenbaum?Do we only follow the Frenchsaying, "Plus ca change, plus cestla même chose (More it changes,the more its the same thing)“?
28From consensus standards (1) to creative applications (2)A standard / Consensus processOrganization A: Realization A / Innovation process APractical realizationof the standard4049/27.3.2013/janStandardizationOrganization B: Realization B / Innovation process B(1)(2)
29Trampoline strategy for applying standards3883/12.1.2011/janThere are no restrictions to use general standards(e.g. ISO 9000) in an innovative way and to strive forexcellence in business performance.– It depends only on organizations’ businessleaders’ and experts’ will and ability todifferentiate from the others of the crowd.– The biggest obstacles that blocks our way orprevents or hinders progress is our existinghabbits, misperceptions, and prejudgmentsthat are hard to give up.AB
30Challenges for creative ISO 9000 applications1880/8.2.2013/janWe cannot change general standards but we may implement and apply themcreatively:1. Sound guiding business ideas, e.g. organization-dedicated conceptsand principles, goals and strategies, aligned with the challenging aimsof the ISO 9000, and particularly ISO 9004:• Living with the models of the modern professional qualityapproach integrated with business issues• Understanding ISO 9000 standards for quality of managementand for business excellence2. Effective tools, methods and theories supporting the quality approach:• Using internationally recognized methodology for increasingbusiness effectiveness and efficiency, and for differentiatingfrom the others• Applying modern means, e.g. using advanced IT businessmethodology (“e-quality”, “e-certificate”, etc.)3. Innovatory management infrastructure for realizing the qualityapproach• Mobilizing the whole organization to use innovatively company’sselected business integrated quality principles and tools• Tuning quality approach with the rapidly changing and emergentbusiness environment and organizational managementstructuresQuality integrationbased on a creativeapplication of the ISO9000 standards
315. People as the primary source of innovation
32Recognizing and appreciating people role in innovationas individuals and in collaborative networks4050/3.1.2013/janIntellectual property (IP) derives from the work of an individuals mind or intellect. IP includesindustrial property (inventions, patents, trademarks, industrial designs, and geographicindications of source) and copyright (novels, poems and plays, films, musical works, artisticworks such as drawings, paintings, photographs and sculptures, and architectural designs).• Intellectual property rights (IPR) give the creator an exclusive right over the use of his/hercreation for a certain period of time.• Creative Commons provides an infrastructure and tools togive individual creators, companies, and institutions a simple,standardized way to a “some rights reserved” approach tocopyright though licenses that are legally solid, globallyapplicable, and responsive to our users’ needs.Today, many of the innovations come from the collaboration of many individuals operating innetworks. Genuine innovatory networks are unplanned, emergent aggregations. Networkmembers are independent actors. Nobody manages the network as a whole but each actor hasits own characteristic impact in the network.Crowdsourcing is the practice of obtaining needed services, ideas, or content by solicitingcontributions from a large group of people and especially from the online community ratherthan from traditional employees or suppliers.Creativity is in connection with the human subconscious and intuition (imaging). Every humanbeing is naturally creative. A key issue is to release this ability of the internal and externalobstacles to implementation, and to activate it to practical situations (processes).These pages are licensedunder the Creative Commons 3.0 Licensehttp://creativecommons.org/licenses/by/3.0(Mention the origin)
33A road to an individual mastery in creativity3998/7.3.2013/jan (Ref.: Julia Cameron)Road to creativity is affected by:1. The sense of safety; positive attitude to creativity without fear2. The sense of identity; honest self-scrutiny and awareness with regard to own needs,interests and mental limits, autonomy and self-protection3. The sense of power; mental strength, and perseverance to overcome obstacles ofspiritual growth, hope4. The sense of integrity; being honest and having strong moral principles, moraluprightness, being whole and undivided5. The sense of possibility; release from everyday ties, believe in a new and positive action6. The sense of abundance; joy and plentifulness of the good things of life7. The sense of connection; social and professional contacts for influence and help8. The sense of strength; winning the losses and withstanding criticism, coping with theinadequacy of time9. The sense of compassion; sympathetic concern about the sufferings or misfortunes ofothers10. The sense of self-protection; avoiding obsessions, e.g. workaholism, dangers due tolack of mental stimulation, lust of reputation, and unhealthy competing11. The sense of autonomy; feeling freedom, acceptance and success, detaching from self-centeredness, getting contact with the outside world through physical activity12. The sense of faith; trusting, knowing own consciousness and creativity, recognizingimagination
346. Quality and innovation integration
35Integrating quality and innovation managements withbusiness management in an organization3994/3.2.2013/janOrganizations 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 apart from organization’s business aspirations and asisolated initiatives from each other.Quality and innovation disciplines need each other and they even may cross-fertilizeeach other, e.g. there should be quality and innovation in both quality and innovationprocesses.
36Business integration: Linking quality management andinnovation management to business management3981/3.4.2013/janBusinessmanagementFayol 1916Taylor 1911Modernbusiness thinkersRole modelorganizationsManagement theoriesX, Y, and ZBusiness integrationQuality InnovationShewhart 1924Ichikawa 1962Feigenbaum 1945Deming 1947Juran 1935Modernquality activistsTarde 1903Role modelorganizationsGreat inventorsModern technologicalinventionsSchumpeter 1939Technological innovationsRogers 1962Social innovationsIntellectual PropertyRightsCollaborativeinnovationGlobal, national andregional movementsAncient qualityachievementsAncient innovationachievementsNational and regionalmovements,ISO standardization 1979
37Integration 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 initiativesare artificial.One must understand and take into account thenature of the organizational system, its businessand its realities when implementing expertiseinitiatives of business management. Integration isalways an organization-dedicated solution.3988/8.1.2013/janExpertise 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 published forthese different expertise disciplines.Cross-influence and collaboration of all expertiseareas are needed. E.g. innovation is needed inquality management and quality in innovationmanagement.
38Invention(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, commitmentI1 I2I3OldOld NewOldNewProduct (goods, service),or structure (What)Activityorprocess(How)EnvironmentEducation,knowledge DesignExpert services ManufacturingMarketingRealizing solutions: People, processes, structures,practices, organizations, cultures, values, etc.Benefits to all involving partiesMaterialsSalesFinancingDevelopmentManagementPiloting,testingSoftwareDelivery,logisticsHostileagentsQuality and innovation realization3999/7.1.2013/jan
39Integrating specialized managerial disciplines andensuring natural business diversity3342/2.2.2013jan (Ref.: ISO Management systems standardization, MSS)Generalmanagementresponsibilitiesand a businesssystemRisksFinanceProductqualityOccupationalhealth and safetySecurityEnvironmentSocialresponsibilityInnovationThe Finnish modelfor integration (MSS)Organizational diversityOrganizationalidentity & privacyGeneral managementsystemBusinessleaders role andresponsibility
407. Organizational learningfor innovation in quality and quality in innovation
41From top management’s understanding, communication,and commitment to business system’s performance1057/5.1.2013/jan0Head’sIdeaCollaborators,Senior Leaders(Chain Reaction)System(for BusinessMission):• Employees• Partners• ExpertsMajor businessresults(Improvement)= Catchball+CEO,President
423621/2.1.2013/janAn 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 languageexperience.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 developmentAn 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.
43Organizational learning for quality management andinnovation management integration in an organization3995/3.2.2013/jan1. Conceptual compatibility• Quality management = coordinated activities to direct and control an organizationwith regard to quality (ISO 9000)• Innovation management = coordinated activities to direct and control anorganization with regard to innovation2. Business management’s consistent commitment to quality and innovation from theorganization’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 knowledgesources4. 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
44Cornerstones of an organization’s different disciplinesmanagement (A learning organization framework)3996/15.2.2013/janAn organization’sdisciplines managementapproach andintegration(1)Clear understanding ofthe guiding ideas,concepts, and principles(3)Efficientinnovatorymanagementinfrastructure(2)EffectivemanagementtoolsGiven“ImplicateOrder”(Ref.: P Senge)PerformanceexcellencePerformance references:-Own targets-Competitors’performance-World class level
45Foundations for managing the balancedmultidisciplinary learning in an organization1. Personal mastery2. Mental models3. Shared vision4. Team learning5. Systems thinking3997/10.1.2013/jan (Ref.: Senge)Quality InnovationBusiness
474051/3.1.2013/janQuality and Innovation, as managerial disciplines- ConclusionsFrom a business perspective:1. The general evolution of quality and innovation disciplines takes place separately by theexperts of the discipline communities.2. These disciplines have remarkable conceptual relationships and useful interactionalpossibilities.3. Quality and innovation arise in organizations’ business systems through businessprocesses. National, regional and global authorities and institutions have a supportive role.4. Challenges:• Innovation achievements from quality professionals with regard to qualitymanagement and quality assurance methodology• Enhancement of quality of innovations, i.e. to fulfill needs and expectationspeople, organizations and societies, supported by professional qualitymanagement processes• Collaboration of the quality and innovation practitioners and professionals• Organizational learning and business integration in organizationsFrom a societal and global perspective:Only quality and innovation could save our planet!