Quality and Relationships: Time for a (VAR) Review?

• Part 1: An Analogy and How Quality Has Become a “Thing”
• Part 2: Why Relationships Matter More Than Ever and How They Went Missing
• Part 3: The Lesson from Aerospace and the Future of Quality

“Quality” in its current expression isn’t working. Investment in capability development, new technology, and the development and attainment of standards and awards continues to increase in attempts to secure outcomes. But organisations are struggling to be resilient and adaptable, supply chains are more brittle than ever, and outcomes are increasingly threatened and compromised.

In this series, we will explore how this is because “quality” has become reduced to a focus on “things”, and – in the process – become treated as a “thing” itself. We will look at why quality is better understood as an emergent property of the relationships between people, systems and organisations.

And we will see how putting those relationships back at the heart of quality is not only closer to the original Japanese concepts that inspired today’s quality movement, but also equips it with what it needs to respond effectively to today’s challenges.

Last time, we used an analogy of football and VAR to establish some insights about quality.

We saw that – contrary to the direction the modern quality movement has taken us – “quality” itself is not an objective thing; nor does it reside in objective things.

Rather, it’s a subjective, emergent property, dependent on the human-centric and perception-driven domain of relationships:

• Relationships between people, where subjectivity dominates.
• Relationships between the parts of wider systems, where emergence dominates.

And we’re now going to see that – far from being abstract or semantic distinctions – these insights explain the challenges we’re seeing “quality” struggle to address.

Because the challenges in today’s business climate – the challenges that increasingly determine whether “quality” is ultimately realised or not, and the challenges which quality exists to try and address – are overwhelmingly relational.

Why This Matters More Than Ever

Organisations today are operating in unprecedented conditions of sustained uncertainty, accelerating change and growing pressure.

In this climate, today’s area of stability can quickly become tomorrow’s area of firefighting for any number of reasons – geopolitical volatility, rapidly-shifting customer expectations, changed government policy, and sudden material shortages being just some of them.

Shocks and disruption propagate across tightly coupled, often poorly-visible networks, where issues can last weeks or months.

And as the environment becomes more interconnected and uncertain, the more important relationships become.

Agility, adaptability and resilience are not properties of individual “parts”, which is the current focus of the quality movement. They instead emerge through relationships between “parts”.

These “parts” could include organisations within a supply chain, teams within a business, people within a department, systems within a process – or even the component parts of a system.

But it is the quality of the relationships between them that primarily determines how effectively the whole responds to change.

These relationships are where risks are identified and addressed, where priorities and trade-offs are worked through in practice, and where outcomes and performance are ultimately shaped.

In fact, the further we move from stable and predictable environments, the more important these relational dynamics become, moving from the periphery to the centre.

And this is where the limitations of traditional “quality” – focused, as with most other management approaches, on top-down control, enforcement and reporting – become apparent.

The emphasis on improving the “parts” implicitly assumes that “quality” of the whole is the inevitable result.

However, whilst quality of the “parts” is necessary, as I’ve said – and traditional quality approaches have been very effective here – it is not sufficient.

Because whilst top-down control can work well in stable and predictable environments, it rapidly breaks down amid change and disruption.

Similarly, optimisation and standardisation make sense when things are fixed, but they don’t naturally seed – and can even actively work against – the agility and adaptability urgently needed amidst endemic turbulence and disruption.

And standard quality KPIs look back instead of forwards – they measure what’s already been achieved to try and ensure that the status quo is maintained – and they don’t address the intangibles of “quality” that we’ve been discussing here.

Most of all, the overall focus is largely internal, whilst the most significant of today’s challenges arise from external volatile conditions and play out in the relationships and relational dynamics we’ve been looking-at.

In short, “quality” remains heavily focused on the parts, whilst many of today’s most pressing challenges arise in the relationships between the parts.

Quality is therefore falling far short of what it could and should be, and the results speak for themselves.

Despite ever more exhaustive standards, expanding regulatory requirements, increasingly sophisticated systems, and enormous investment in capability and training, organisations now experience disruption, delay, fragmentation, misalignment and value leakage on an unprecedented scale:

And at this point, we need to think how we got here – it’s an interesting story in its own right, but more importantly, it’ll help us to see how to get to where we need to be.

Something Key Was Lost in Translation

The roots of today’s practice of “quality” arguably go back at least a century, but perhaps the most critical moment occurred in 1980, when NBC aired a famous documentary titled, “If Japan Can… Why Can’t We?“.

For the first time, the American public and corporate executives saw how dramatically Japanese automakers and electronics firms were outperforming the West in both defect rates and productivity.

To answer the resulting demand for the West to follow suit, MIT launched a massive, multi-million-dollar global study of the automotive industry, the result of which was James Womack, Daniel Jones, and Daniel Roos’s seminal book, “The Machine That Changed the World“.

Central to this research was the observation that the Toyota Production System used less of everything compared to Western mass production – less human effort, less manufacturing space, less investment in tools – and the word “Lean” was chosen to describe the new drive towards “quality”.

There are many factors involved in how relational aspects have ended-up almost entirely left out of “quality”, but a central one is surely the choice of “Lean” as a word to describe the production philosophy that the West tried to emulate from Japan.

Why?

Because this sense of “without fat” or “thin” placed the focus on reduction, minimisation and the elimination of waste. And with this focus established, it makes more sense why Toyota’s complementary focus on flow, knowledge creation, collective learning, shared understanding, and human development – profoundly relational elements – got set aside or “lost in translation”.

For if the Japanese model had been fully adopted, it would have been impossible not to have imbibed its deep emphasis on tacit knowledge, human development and respect for people, as expressed in relational aspects such as:

• Gemba (現場) – direct engagement with where value is created.
• Ba (場) – the shared spaces through which knowledge emerges.
• Nemawashi (根回し) – building understanding and alignment through conversation.
• Hansei (反省) – collective reflection and learning.

So why did this “lost in translation” occur? How did we get here?

How Did We Get Here?

There is no one straightforward answer, but we need to remember that the West’s attempts to emulate Japanese quality were not in a vacuum.

To begin with, human beings – perhaps especially in the West – have a natural preference for order, predictability and control:

• FA Hayek observed how our brains work by creating rules and structures.
• Iain McGilchrist’s work has explored the dominance of more structured and rigid left hemispherical thinking in the West.
• We hold up perfected and rigid ideals and aim for them, we want things to be predictable and controlled, and we like (and take pride in) understanding and finding solutions to challenges.

These basic traits were then arguably accentuated by the scientific method and Industrial Revolution.

These both led the world to be understood principally as a “machine” to exploit, and were applied to business by the principles of Scientific Management developed by Frederick Taylor.

Everything became understood to be governed by known, fixed laws – the understanding of which seemed to enable nature to be tamed, accurate prediction and total control – and people became largely non-mechanical and non-autonomous “cogs” in predominantly manufacturing processes.

This naturally led to efficiency being the principal threshold of competition, “exploitation” through repeatability (ahead of exploration), and optimisation and control being the keys to competitive advantage.

None of this is a criticism of science itself. Rather, it is an observation of what happens when science subtly becomes scientism: the belief that what matters most is what can be observed, measured, isolated and controlled.

Indeed, whilst science has moved on to see complexity as even more fundamental than laws – e.g. in quantum theory or in understanding biological systems, both of which focus on relationships and ambiguity, and which leading thinkers have related to business – the business context into which Japanese quality arrived was thoroughly steeped in these rigid approaches and their underpinning assumptions.

Relationships, meaning, perception and judgement then became secondary concerns – not because they are unimportant, but because they are harder to treat as “things”.

And this surely helps explain why the West saw and gravitated towards the technical aspects of what they found in Japan, adopting many of the tools and techniques, but without really absorbing the more holistic underlying, relational philosophy.

The consequences are still being felt today.

Research into Lean transformations has consistently found that organisations often struggle to sustain and realise the benefits they seek. For example, a 2008 analysis reported that whilst nearly 70% of U.S. manufacturing plants were using Lean practices, only a small minority achieved the results they had anticipated, with only 2% reported as achieving their primary objectives and less than a quarter achieving significant, lasting results.

Different studies report different figures and interpret them in different ways, but the broader pattern is difficult to ignore.

Significantly, the explanations offered are often not technical; rather, they concern leadership, culture, engagement, shared understanding, behavioural change and organisational learning – the relational dimension.

There is therefore now an uphill struggle to redress the balance between “tools” and a more holistic approach to lean and quality.

Nowhere is all this more apparent than within the aerospace sector.

Next time, we’ll see what that looks like and what it tells us for the future of quality.