However, to get to issues of quality, I’d first like to consider what a profound concept tangibility is. In particular, how profoundly different a tangible product is from an intangible service. More than that, I’d like to consider how different the management approach to delivering tangible products in the 20th century is to the approach needed to successfully deliver the intangible services of the 21st Century.
The most successful product manufacturers of the previous century took a disciplined, scientific approach to manufacturing processes. And the hero of manufacturing quality is undisputedly William Edwards Deming.
Deming’s thinking on quality transformed Japanese manufacturing
As early as 1912, only four years after the first Model T Ford hit the streets, Deming told us that “Inspection is too late. The quality, good or bad, is already in the product.” In this context, Deming was referring to quality control late in the production process.
Deming’s work, especially in Japan, ensured the best manufacturers maintained the highest standards of quality at every step in the production process. The goal was to provide a repeatable standard of quality – quality that would be experienced by the customer long after the product had left the factory. Engineering and systems thinking were the dominant competencies of the era.
As the services economy matured in developed countries it was understandable, even inevitable, that the thinking that had dominated the business structure and management style of product manufacturers would simply be applied to services. And so, it was.
As more technology, software, in particular, came to be deployed in service businesses the number of failed projects started to mount up. It is worth reminding you of the statics:
Between 2015 and 2020 only 35% of large-scale technology projects were a success. If projects weren’t cancelled altogether (19%) they were one of the 47% considered to be ‘challenged’ by being over time, over budget, or underperforming, up 4% since 2014.1
With these figures, it is little wonder that there has been ongoing interest in any technique or management style that might improve the results. And this is why new approaches such as ‘agile’, ‘lean’ and DevOps were born. Yet, it is also worth considering, that the figures quoted above are recent, and so they include these new approaches also. In short, none of the remedies worked as hoped.
At a very human level it must be incredibly frustrating, even debilitating, for the people involved to be working in environments where two-thirds of the projects that are supposedly important to the organisation, go so wrong. And on top of the frustration, what a waste of resources and time.
tangible products and intangible services are more different that we ever imagined
To gain a better perspective as to why new approaches have not worked so well and, more importantly, to get some insight into what will work, we need to think more carefully about the concept of tangibility.
Tangibility applies to all products and services. Henry Ford’s Model T product is almost entirely tangible. It could be experienced directly, touched, seen, smelt, driven. Its relative permanence is also important. It can be experienced many times and by many people.
One of the Model T’s greatest successes, was proving a production line could achieve a universal and repeatable level of quality. Thanks to Deming, the Japanese automakers mastered the art.
And yes, there is an element of intangibility in tangible products, including the marketing campaign, the promise of a warranty and even the social status of ownership. But ultimately, the experience of these intangibles is driven by and directly related to the customer’s experience of the tangible product itself.
By contrast, the intangibility of services means they are not permanent, they are perishable, and typically they can’t be touched, seen, smelt, or driven. For example, a client of a barrister or a psychotherapist can’t even be promised a result before buying the service.
To reduce the uncertainty associated with the intangibility of services, marketers will strive to make the service seem more tangible by emphasising the place, people, equipment, symbols, or price of the service. However, none of this can overcome the two biggest issues that have historically needed to be managed by service organisations.
Firstly, the provision and consumption of a service often happens at the same time. They are often dynamic and fleeting. A single moment of truth.
Secondly, there is a much higher level of human interaction in the experience of the service.
These two factors tell us immediately that product, systems, and engineering style thinking alone are not appropriate for developing and providing services. The inappropriateness is magnified tenfold when we try to replace one side of the human interaction with technology.
the vanishing human is the biggest challenge to services
I believe the ‘vanishing human’ on the company side of a service is the number one challenge of customer experience today. Every area of a company is affected by this fundamental change. And so, every part of a company must be completely aligned if there is to be any hope of getting it right. The best, possibly the only, way to achieve this alignment is to use quality as the yardstick.
A high-quality customer experience involving technology must replicate the highest quality human experience. It must be capable of matching human interactions.
So, rather than just applying systems or engineering thinking, we need to also think in human terms, and we need to be able to translate our understanding of human behaviour – complete with all its irrationality and non-system thinking – into the design of services. Just as Deming warned that inspection was too late for product quality, ‘help & support’ is too late for service quality. So, the strategic imperative to deliver a quality experience cannot just sit at an executive level. It has to be ingrained at the very heart of your technology development capability. To understand how ingrained quality is at the heart of your organisations technology capability, ask three people involved this simple question, “what is the definition of quality for this technology product?” The results may surprise you.
Moreover, to be competitive, the thinking required needs to be at a personal level, to enable customisation, allowing for variation and difference, and to bring creativity to interactions. There is more than one colour! Service technology and service thinking are as far from the Model T as one could imagine. And our thinking about quality needs to be as well. Indeed, the role of creativity is the next challenge to address.
1 Chaos Report 2020. The Standish Group, a benchmarking and research company in the USA.