Tuesday, November 20, 2012

Does Quality Really Distinguish Your Firm?

What differentiates your firm from your competitors? I've posed that question many times and the number one response is "our quality." Ask clients what traits distinguish the standout firms (as my former employer did in a survey years ago) and quality is undoubtedly at or near the top of the list. But when I've asked clients to rate individual firms in hundreds of client interviews over the years, quality has rarely been mentioned as a point of differentiation.

How can this be so? I suspect it relates to how A/E firms go about the process of "assuring" quality. The fact is that I've not encountered a firm that specifically sought to create differential quality. Despite common claims that "our quality sets us apart," quality management processes in our industry are predominantly designed to simply meet the norm.

Let me suggest four stages of quality improvement (borrowing in part from the Alexandria Marketing Research Group) as illustrated in the diagram below: 

Conformance quality involves meeting an internal standard of care, which typically means minimizing mistakes rather than delivering superior quality. The vast majority of A/E firms fall in this category (the percentages in the diagram are simply my guesses). Plus most firms rely on an outdated mode of quality control that centers on reviews at the end of the production process. That is both inefficient and expensive because the focus is on catching errors rather than preventing them.

At the next stage, firms seek feedback from clients on how their quality meets expectations. Since my informal polling suggests that less than one fourth of A/E firms formally solicit regular performance feedback, I would conclude that no more than a similar proportion reach this stage. Of course, firms get periodic client feedback on their quality. Unfortunately, that usually occurs when the client is dissatisfied—hardly a formula for creating differential quality.

At the third stage, companies benchmark their quality against their competitors. A/E firms do this intuitively; that's what defines the internal standard of care. But I've not heard of anyone doing this formally, and frankly I'm not sure how it would be done. Unlike other industries, we generally don't measure quality, so marketplace benchmarking would be very difficult to accomplish.

Which leads to my conclusion that differential quality—providing a competitive advantage—is exceedingly rare in our business. I'm sure there are a few exceptions out there, such as some of the nameplate architectural firms. But for the most part, quality as a differentiator is a popular myth, with one primary exception—if your quality is substandard, it will set you apart!

So does this mean there's little value in striving to deliver exceptional quality? Not at all. But you should recognize that delivering a quality difference that clients will notice is not as easy as most firms seem to think. If you want to be among those rare firms who truly are distinguished by their quality, here are some things to consider:

Simply minimizing mistakes does not lead to differential quality. If that's the extent of your firm's quality management process, you might reconsider those claims about delivering better quality than your competitors. "We make fewer errors than they do" is hardly the stuff of a compelling differentiation strategy.

Promote a culture of continuous improvement. I've worked with many firms trying to improve, but none that I'd say had embraced a full-blown commitment to continuous improvement. What's involved? An ongoing, relentless pursuit of finding better ways of doing the things that contribute to your firm's success.

Conduct root cause analysis for persistent problems. Clients will generally forgive occasional quality breakdowns, but they are understandably less tolerant of recurring mistakes. These deserve a formal root cause analysis as I described in a couple of previous posts (Part 1 and Part 2).

Focus on reinforcing quality behaviors. About two-thirds of corporate quality initiatives fail to significantly improve quality. A study by the Boston Consulting Group found that one of the primary causes is a failure to "inspire quality-creating behaviors." A/E firms routinely rely too much on quality management procedures rather than addressing the behaviors that lead to superior quality. By the way, most root causes of quality problems are behavioral in nature.

Regularly seek feedback from clients. Benchmarking against the industry might be a stretch, but you can certainly be talking to your clients about how you're doing in meeting their expectations of quality.

Create a more collaborative work process. Coordination errors between disciplines is reportedly the most common cause of quality problems in the A/E industry. In many multidisciplinary firms, the working relationship between different departments borders on dysfunctional. But the real opportunity here is not just fixing the problem; it's leveraging the advantages of different disciplinary perspectives in a truly collaborative process

Remember that quality doesn't differentiate; customer experiences do. It's hard to stand out on the basis of superior quality, but your work product quality is critically important to the best differentiation strategy—delivering distinctive customer experiences. You can have great quality and still have unhappy clients, but you can't have substandard quality and deliver an experience that sets you apart. Make satisfying the client the centerpiece of your quality management approach.

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