Project management in innovation can only be successful if it’s driven by a robust methodology integrating a clear quality assurance concept. What can trendy methodologies learn from the house of quality?

1. 2.2 Is the house of quality still a valid model to manage innovation? 1
CONFIDENTIAL Template Innovation Day 2019CONFIDENTIAL
THE HOUSE OF QUALITY
Dany Robberecht
Director Consulting Office
dany.robberecht@verhaert.com
TRACK 2
MyInnovationFactory

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CAN A QUALITY METHOD HELP MANAGE INNOVATIONS?
The house of quality is an old concept
A deep dive in how it can work
It’s very powerful and proven to work
So why is it this hard?
Some tips

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WHAT DOES MY INNOVATION FACTORY LOOK LIKE?
MyInnovationFactory
An innovation factory is the set of resources, skills,
tools, methods and infrastructure a company has in
order to define, develop, produce and market
breakthrough products and services successfully.
Source IBM

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MANAGING AN INNOVATION FACTOY RIGHT IS VITAL …
According to HBR professor Clayton Christensen, 95% of all
product innovations fail, and according to the Startup
Genome report, 92% of start-ups fail.
While the accuracy of the previous numbers can be
debated, according to the McKinsey Global Innovation
Survey, only 6% of executives are satisfied with their
innovation performance.
What’s more, according to the 2017 PwC Innovation
Benchmark, 54% of innovating organizations have trouble
bridging the gap between innovation strategy and the
larger business strategy.
As such, it’s quite safe to assume that there’s plenty of
room for improvement when it comes to innovation.
A quick tour on how your
innovation factory works?
© VERHAERT

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In 2012 Bic released a product for women
they didn't even know they needed - "lady
pens". These pointlessly gendered pens were
mocked and failed to gain a consumer base
Source BORED PANDA

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CAN A QUALITY METHOD PREVENT INNOVATION MARKET FAILURES?

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Can a creative process be made more
efficient?
Can we reduce variation & errors? How then?
How can you achieve quality in innovation and
at the same time have great creativity to
successful innovations?
ARE QUALITY ASSURANCE AND INNOVATION NATURAL ENEMIES?

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AN OLD CONCEPT …
House of Quality / Quality Function Deployment

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THE ORIGINAL CONCEPT
House of Quality. Total Quality Management or TQM is
a management concept in which an organization aims
at improving processes, products and services
continuously to achieve customer satisfaction. ...
Planning begins by first analyzing the customer
requirements.
Can it be used for breakthrough innovation as well?

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The house of quality, a part of QFD,[3] is the basic design tool of
quality function deployment.[4] It identifies and classifies customer
desires (What's), identifies the importance of those desires,
identifies engineering characteristics which may be relevant to
those desires (How's), correlates the two, allows for verification of
those correlations, and then assigns objectives and priorities for
the system requirements.[2]
The house of quality appeared in 1972 in the design of an oil
tanker by Mitsubishi Heavy Industries.[4]
OUR SWEET SPOT IS A FIRST LINK
© VERHAERT

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Quality function deployment (QFD) is a method
developed in Japan in 1966 to help transform the voice
of the customer into engineering characteristics for a
product.[1][2] Yoji Akao, the original developer, described
QFD as a "method to transform qualitative user demands
into quantitative parameters, to deploy the functions
forming quality, and to deploy methods for achieving the
design quality into subsystems and component parts,
and ultimately to specific elements of the manufacturing
process."[1] The author combined his work in quality
assurance and quality control points with function
deployment used in value engineering.
OUR RICE METHOD IS THE SECOND ONE
© VERHAERT

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THE HOUSE OF QUALITY FOR INNOVATION
We seek a method that …
- Aims to develop meaningful breakthrough
innovations that distinct from the competition
with technical solutions that make a difference.
- Has a holistic method to successfully execute
innovation projects.
- Improves the quality of innovation projects and
is useful for all stakeholders involved. © VERHAERT

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LET’S TAKE A DIVE INTO THE HOUSE OF QUALITY
We’ll discuss every element briefly

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Use case definition & translation into
product qualities.
Eight dimensions of product quality
1 Performance
2 Features
3 Reliability
4 Conformance
#1 - THE CENTRE OF GRAVITY IS THE REQUIREMENT’S DEFINITION
BANCONTACT, (mid 80’S)
5 Durability
6 Serviceability
7 Aesthetics
8 Convenience
2 OUT OF 3 feel that they lack
the real competence to DESIGN
compelling USE CASES
Survey 2017 powered by
© VERHAERT

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In 1994 a bottled water made for cats and dogs was
launched. The beverage was carbonated, vitamin
enriched and flavored. The product flopped after
consumers realized it was completely unnecessary
to give their pets, what was essentially soda.
Source BORED PANDA

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In 1999 the nightmarish Rejuvenique Facial Toning
Mask was launched. This creepy mask was
intended to tighten facial muscles with... shock
therapy. Consumers revealed that it feels as bad as
it sounds.
Source BORED PANDA

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In 2013 Juicero introduced a juicer called the Juicero
Press. This device was sold with packets of pre-
juiced fruits and vegetables sold exclusively by the
company. They were humiliated when consumers
realized that the packets could be squeezed by hand
just as efficiently as with the juicer. Later, Juicero
announced that it was suspending their juicer sales
and repurchasing the products from customers.
Source BORED PANDA

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A function can often be met in
different ways
• Cost / performance?
• Conflicts?
• Value perception user?
#2 - HOW WILL THE TECHNICAL SYSTEM PERFORM?
Morphological map - © VERHAERT

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In 1964 DuPont launched Corfam shoes with synthetic
leather. They were advertised as a much better
alternative to leather shoes. They managed to rustle
up some excitement about their new product, but
these shoes flopped after people started complaining
that they were stiff and too hot for feet. It resulted in
the company losing over $100 million.
Source BORED PANDA

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In 2015 hoverboards turned out to be one
of the biggest tech flops. Why? Because
they could potentially catch fire and burn
your house down.
Source BORED PANDA

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In 2017 everyone was talking about this
explosive failure - the Samsung Galaxy Note
7. It lasted less than a year on the market
after Samsung had to recall around 2.5
million phones, due to complaints of
overheating and exploding batteries.
Source BORED PANDA

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Establish a unique position in your target market & develop a competitive
edge by differentiating your product or service.
In essence, there are only four possible strategies:
- Better performance for more money
- Same performance for less money
- Less performance for less money
- More performance for less money
#3 - DOES IT STAND OUT IN THE MARKET?
KOREA SAEHAN
INFORMATION
SYSTEMS (1999)
APPLE, (2001)

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When the Sony Nw-Hd1audio player came
out in 2004, it was probably the smallest
player at the time. However, it was a
complete flop because it only supported
Sony's ATRAC3 format. So no MP3, WAV,
or WMA support. Also, the price was way
too high.
Source BORED PANDA

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Amazon decided to enter the smartphone
market with the Fire Phone in 2014.
Unfortunately, it was very unsuccessful
and was discontinued a year later. The
company's CEO Tom Szkutak indicated
that the pricing strategy was to blame for
this product fail.
Source BORED PANDA

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HP attempted to compete with iPad in
2011 by creating Hp TouchPad.
However, the new tablet was just like
every other tablet on the market failing
to deliver something new. It lasted only
49 days on the market selling just
20,000 units.
Source BORED PANDA

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Your factory needs a set of tools, techniques, and tactics
designed to help you validate any idea for a new product or
service quickly, objectively, and accurately.
IS IT WHAT YOUR CUSTOMERS NEED?
BOSCH SMART EYE (2016)
1 OUT OF 2 feel they have immature
organizational abilities regarding
A STRUCTURED PROCESS FOR
IMPLEMENTING USER INSIGHTS
Survey 2017 powered by
© VERHAERT

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In 2000 Heinz decided to add an unexpected twist
to their ketchup in an attempt to catch children’s
attention. They came up with Ez Squirt colored
ketchup which came in three main colors: teal,
green, and purple. The idea wasn't meant to last
on the market. After 6 years it was discontinued.
Source BORED PANDA

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In 1988 RJ Reynolds Tobacco decided to
develop a smokeless cigarette. The
company invested $325 million into
manufacturing their new Premier line
which, according to the CEO of the
company, "tasted like sh*t". It's no surprise
people didn't buy them.
Source BORED PANDA

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Donald Trump kicked off his “world’s greatest”
line of premium steaks in 2007. However,
consumers didn't agree with the description
'great'. The product was discontinued after
just two months for sales failures.
Source BORED PANDA

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OLD… BUT PROVEN TO WORK
What can you expect from this quality management method?

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QFD HAS AN ECONOMIC EFFECT
The QFD-method strives for the first time
right product launch.
Toyota improved its rust prevention record
substantially. QFD allowed coordinating
design and production decisions to focus on
customer concerns.
• Reduce prelaunch time: Toyota reduces
startup & preproduction costs with +60%
• Less post launch tinkering: less design
changes because the design was frozen
before the first car came off the assembly
line
Source HBR

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THERE IS NOTHING MYSTERIOUS ABOUT IT …
There is nothing particularly difficult about it, however,
it does require some effort to get used to its
conventions.
Quality is relative, it’s what user’s expect. This can vary
in all directions (worse / better).
The pitfall is to use it from an analytical viewpoint only,
while one can bounce knowingly around the house as
it would be your navigation chart.
DESIRABLE
FEASIBLE
VIABLE
ITERATIVE
DESIGN
PROCESS
© VERHAERT

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In 1982 Colgate came up with the weirdest
brand extension idea. They decided to sell
frozen dinners. This plan backfired,
probably because consumers couldn't help
but think that the Colgate food tasted just
like their toothpaste. No company launches
a product thinking that it will decrease
sales of their other products, but Colgate
should've seen it coming. Their toothpaste
sales plummeted after the launch of the
kitchen entrees line.
FAILURE CAN BE IN THE EXECUTION PROCESS AS WELL …
Source BORED PANDA

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SO WHY IS IT THIS HARD?
Our InnovationFactory takes a different kind of program management

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COMPLEXITY OF AN ORGANIZATION …
1. Collaboration in collocated environments
2. Integrated decision taking
Before the industrial revolution every function was merely
integrated with one single person.
© VERHAERT

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COMPLEXITY OF HOLLISTIC THINKING…
1. Keeping our options open is difficult, they
interact with each other
2. Organizing sprints and activities to diverge
and converge in an holistic way
3. Failing to have floating specifications, e.g.
product cost is often frozen at the start of a
projectWe do not explore enough, hence get stuck in the thinking
phase and in the fact that the sweet spot is by definition the
common ground.
© VERHAERT

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COMPLEXITY OF UNDERSTANDING THE REASON BEYOND …
1. Understanding what customers need and want
2. Assess the value of things
We used to know what customer want, thus we prescribed
how we could make their life better. Nowadays we have to
understand what they need.
© VERHAERT

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BEING A SUCCESFUL INNOVATOR DOESN’T TAKE THAT MUCH
Four boundary conditions:
1. Develop a need-seeker mentality, hence develop
meaningful stuff
2. Ambidextrous organizational structure for
emerging business, with no dependency on
future revenues for project approval
3. Portfolio approach because it’s impossible to pick
the winners from the losers early on.
4. A solid program management that connects the
dots with QFD as a basis for operations
The house of quality helps in managing MyInnovationFactory
Like any other factory it needs a quality system:
• Scalable operations
• Repetitive tasking
• Traceable actions
• Consistent output
MyInnovationFactory
© VERHAERT

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SOME TIPS TO GET YOU ON YOUR WAY …
Only six things you have to do!

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1. Identify what customers want
2. Identify how the product will satisfy customer
Understand how specific product features, attributes or
characteristics will satisfy customer needs.
3. Identify relationships between how’s
How do they interact or converge with each other
4. Measure and develop importance ratings
Try to understand how relations each value against each other
5. Evaluate competing products in terms
Answer the question how well they serve the customer needs
6. Determine the desirable technical attributes
In this step our performance and the competitor’s performance
are determined and compared
SIX STEPS, AND IN THIS LOGIC SEQUENCE ONLY!
© VERHAERT

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One group, five brands
Our services are marketed through 5 brands each addressing
specific missions in product development.
INTEGRATED PRODUCT DEVELOPMENT
ON-SITE PRODUCT
DEVELOPMENT
DIGITAL PRODUCT
DEVELOPMENT
OPTICAL PRODUCT
DEVELOPMENT