No relation between price and quality
In industries under siege from external change (and I count music, books, airlines, pharmaceuticals, IT, telecommunications, etc) you’ll find that the extra fees extracted by the legacy companies DO NOT go for quality. They go to prop up the status quo.
That’s why CDs cost $18 and why Jet Blue is the best airline in America.
Quality is not a given
In just about all of my writing, I assume that the stuff you’re making is world class. In a world where everything is good enough, meeting that standard isn’t enough.
But it’s worth a reminder every once in a while that getting the quality right still matters. I went to buy the much hyped (1 million bucks worth ) Gourmet Magazine cookbook: Amazon.com: Books: The Gourmet Cookbook : More than 1000 recipes, only to discover that every single reviewer hated the fact that they couldn’t read it.
How did that happen? In a conservative industry known for not screwing up the hard stuff (no typos, page numbers in order, stuff like that), how did a book this important to the bottom line end up with yellow headlines?
The rush to quality
I just passed a house for sale. The sign out front was from a mass market realtor, but from their higher end “estates” division. A fancier sign, a fancier name.
It wasn’t, however, a fancier house.
In one industry after another, premium brands (Tiffany) are becoming the standard. Why list a house with a regular realtor? Why buy jewelry from a regular store? Why wear regular clothes? As brands learn how profitable it is to go from Class to Mass (Wolfgang Puck and Armani come to mind), consumers are being trained to abhor not the cheap but the middling.
Zales for your anniversary anyone?
Quality, scale and the regular kind
When we talk about quality, it’s easy to get confused.
That’s because there are two kinds of quality being discussed. The most common way it’s talked about in business is “meeting specifications.” An item has quality if it’s built the way it was designed to be built.
There’s another sort of quality, though. This is the quality of, “is it worth doing?”. The quality of specialness and humanity, of passion and remarkability.
Hence the conflict. The first sort of quality is easy to mandate, reasonably easy to scale and it fits into a spreadsheet very nicely. I wonder if we’re getting past that.
Consider two eggs:
If I go the local diner, I can get a high quality diner egg, over easy. The egg is a standard manufactured egg, created in quantity by drugged chickens in prison. It retails (raw) for about 14 cents. The egg is cooked on a griddle the way it always is, a grill neither spotless nor filthy, covered with a sheen of slightly old oil. It’s cooked on one side until set, flipped for a few seconds, put on a plate, given a shake of iodized salt and served, usually with a piece of generic white bread toast.
This is the regular kind. The kind most people grew up with. Easy to produce on demand, reliable and expected.
If I make an egg at home, I’ll use a free range egg from the farmer’s market, which I’ll happily pay 39 cents for. This egg tastes like an egg, and the extra money pays for a local farmer and a (slightly) happier chicken. I’d cook it in a very hot cast iron skillet with really tasty olive oil, and I’d leave it in longer until it gets crisp around the edges, then I’d put some David’s salt on it (which, due to its pointy edges, in fact does taste better). All told, it costs about thirty one cents more altogether.
This is the undependable kind. You might not be able to get the eggs. Cleaning the pan is more work too. But this is a remarkable egg, an egg worth talking about, an egg worth crossing the street for, an egg worth writing about.
If you can do this to an egg for thirty cents, imagine what happens when you bring the same approach to quality to your job.
Defining quality
Given how much we talk about it, it’s surprising that there’s a lot of confusion about what quality is.
What’s a higher quality car: a one-year old Honda Civic or a brand new top of the line Bentley?
It turns out that there are at least two useful ways to describe quality, and the conflict between them leads to the confusion…
Quality of design: Thoughtfulness and processes that lead to user delight, that make it likely that someone will seek out a product, pay extra for it or tell a friend.
Quality of manufacture: Removing any variation in tolerances that a user will notice or care about.
In the case of the Civic, the quality of manufacture is clearly higher by any measure. The manufacturing is more exact, the likelihood that the car will perform (or not perform) in a way you don’t expect is tiny.
On the other hand, we can probably agree that the design of the Bentley is more bespoke, luxurious and worthy of comment.
Let’s think about manufacturing variation for a second: Fedex promises overnight delivery. 10:20 vs 10:15 is not something the recipient cares about. Tomorrow vs. Thursday, they care about a lot. The goal of the manufacturing process isn’t to reach the perfection of infinity. It’s to drive tolerances so hard that the consumer doesn’t care about the variation. Spending an extra million dollars to get five minutes faster isn’t as important to the Fedex brand as spending a million dollars to make the website delightful.
Dropbox is a company that got both right. The design of the service is so useful it now seems obvious. At the same time, though, and most critically, the manufacture of the service is to a very high tolerance. Great design in a backup service would be useless if one in a thousand files were corrupted.
Microsoft struggles (when they struggle) because sometimes they get both wrong. Software that has a user interface that’s a pain to use rarely leads to delight, and bugs represent significant manufacturing defects, because sometimes (usually just before a presentation), the software doesn’t work as expected–a noticed variation.
The Shake Shack, many New York burger fans would argue, is a higher quality fast food experience than McDonald’s, as evidenced by lines out the door and higher prices. Except from a production point of view. The factory that is McDonald’s far outperforms the small chain in terms of efficient production of the designed goods within certain tolerances. It’s faster and more reliable. And yet, many people choose to pay extra to eat at Shake Shack. Because it’s “better.” Faster doesn’t matter as much to the Shake Shack customer.
The balance, then, is to understand that marketers want both. A short-sighted CFO might want neither.
Deming defined quality as: (result of work effort)/(total costs). Unless you understand both parts of that fraction, you’ll have a hard time allocating your resources.
Consider what Philip Crosby realized a generation ago: Quality is free. (free essays are here).
It’s cheaper to design marketing quality into the product than it is to advertise the product.
It’s cheaper to design manufacturing quality into a factory than it is to inspect it in after the product has already been built.
These go hand in hand. Don’t tell me about server uptime if your interface is lame or the attitude of the people answering the phone is obnoxious. Don’t promise me a brilliant new service if you’re unable to show up for the meeting. Don’t show me a boring manuscript with no typos in it, and don’t try to sell me a brilliant book so filled with errors that I’m too distracted to finish it.
There are two reasons that quality of manufacture is diminishing in importance as a competitive tool:
a. incremental advances in this sort of quality get increasingly more expensive. Going from one defect in a thousand to one in a million is relatively cheap. Going from one in a million to one in a billion, though, costs a fortune.
b. As manufacturing skills increase (and information about them is exchanged) it means that your competition has as much ability to manufacture with quality as you do.
On the other hand, quality of design remains a fast-moving, judgment-based process where supremacy is hard to reach and harder to maintain.
And yet organizations often focus obsessively on manufacturing quality. Easier to describe, easier to measure, easier to take on as a group. It’s essential, it’s just not as important as it used to be.
How this quality concept can explain:- the industrial economic expansion of the last 50 years in every single big mass product?
– the ups and downs of the stock market due to low short term expectations of the company?
– the indifference of 90% of the population to look for price as main decision point?
Why do I spread your idea? because…
Ideas spread when people choose to spread them. Here are some reasons why:
- I spread your idea because it makes me feel generous.
- …because I feel smart alerting others to what I discovered.
- …because I care about the outcome and want you (the creator of the idea) to succeed.
- …because I have no choice. Every time I use your product, I spread the idea (Hotmail, iPad, a tattoo).
- …because there’s a financial benefit directly to me (Amazon affiliates, mlm).
- …because it’s funny and laughing alone is no fun.
- …because I’m lonely and sharing an idea solves that problem, at least for a while.
- …because I’m angry and I want to enlist others in my outrage (or in shutting you down).
- …because both my friend and I will benefit if I share the idea (Groupon).
- …because you asked me to, and it’s hard to say no to you.
- …because I can use the idea to introduce people to one another, and making a match is both fun in the short run and community-building.
- …because your service works better if all my friends use it (email, Facebook).
- …because if everyone knew this idea, I’d be happier.
- …because your idea says something that I have trouble saying directly (AA, a blog post, a book).
- …because I care about someone and this idea will make them happier or healthier.
- …because it’s fun to make another teen snicker about prurient stuff we’re not supposed to see.
- …because the tribe needs to know about this if we’re going to avoid an external threat.
- …because the tribe needs to know about this if we’re going to maintain internal order.
- …because it’s my job.
- I spread your idea because I’m in awe of your art and the only way I can repay you is to share that art with others.
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