By Anthony W. Ulwick, Richard E. Zultner and Richard Norman

In 1988, John Hauser and Don Clausing popularized the use of quality function deployment (QFD) in corporate America. The theory behind QFD was that design engineers and manufacturing staff must understand what needs a product concept is intended to satisfy so they can make the appropriate design trade-off decisions throughout the product development process. Following this practice would assure that the product conceived at the beginning of the development process matched the one that was produced. It would also ensure that the product, as designed, satisfied customers’ needs. The house of quality is the name given to the multi-faceted matrix that is the primary tool for implementing QFD.

Companies did not limit their use of the house of quality to product development, however; they also used it to help execute the innovation process, a related, but distinct, discipline. Today, with innovation and product development emerging as the keys to company growth, increasing numbers of companies are attempting to use the house of quality and QFD programs to bring rigor, discipline, and quality to these complex processes. But as a handful of companies discovered years ago, and as other companies are discovering now, the house of quality is not the best tool for the innovation process or even for its intended use – product development.

What has supplanted the house of quality? The use of systematic methods and tools are refocusing the energies of companies. By adopting these tools, companies can improve both innovation and product development, creating greater value for customers and a competitive advantage for the firm.

How the House of Quality Became Standard Innovation Practice

Innovation is the process of devising product and service concepts that address unmet customer needs. It should not be confused with the product development process, which is the process of developing a product once it has been conceptualized and approved for development (see Figure 1). The output of the innovation process is a product concept, that is, a unique and valued solution that is worthy of entering a company’s product development process. Confusion about innovation sometimes arises because technical innovation, which includes making design and manufacturing trade-off decisions, takes place in the product development process. Although this is considered innovation, it is not concept innovation, as it takes place after the product concept has already been defined and funded.

Figure 1: Distinguishing the Innovation Process from Downstream Processes

The house of quality initially emerged as a tool for translating customer needs into technical requirements in the initial stage of the product development process. But although it helped engineers and designers make technical design and manufacturing trade-off decisions, it was never suited to the job of managing the innovation process, despite companies’ tireless efforts to make it work.

New Tools for Innovation

To excel at innovation, a company must be able to do three important things for any given market:

1. Identify all customer’s needs
2. Determine which of those needs are unmet
3. Devise solutions that meet those needs

A solid tool for innovation must enable companies to identify and prioritize all the customer’s unmet needs; it must be usable in all innovation contexts, and it must minimize process variability and produce predictable results. The house of quality fails on all fronts.

Figure 2: Concept Innovation

The notion that the house of quality can assist in the execution of the concept innovation process is based on an incorrect assumption – that customer needs (which in the house-of-quality methodology are recorded as benefit statements) must be translated into metric-based technical requirements (house of quality outputs) before the company can generate and evaluate alternative product concepts. As it turns out, this assumption is dead wrong: well-defined customer need statements are the only inputs required to uncover opportunities and brainstorm valued solutions.

Consider that customers buy products and services for a specific purpose: to do jobs – the fundamental goals customers are trying to accomplish or problems they are trying to resolve in a given situation. The job is the stable, long-term focal point around which value creation should be centered because the job’s perfect execution reflects the customer’s true definition of value. When companies accept the job as the sole unit of analysis, they are freed from the necessity of capturing requirements on products and services. Instead, they must capture requirements on the jobs that those products or services are intended to perform. This is a new way of thinking.

When following this approach, the company must ascertain from customers what must be measured and controlled to ensure the job is executed with the desired speed, predictability, and output. The statements that describe what must be measured and controlled are what we call desired outcome statements; they are customers’ fundamental measures of performance associated with getting a job done. When these facts are understood, the house of quality is no longer necessary. Because desired outcomes are defined and structured as metrics-based technical requirements to begin with (ones that customers themselves define as measures of success when getting a job done), there is no need to translate customer inputs into company-defined technical requirement statements, which is the whole purpose of the house of quality. Instead, desired outcome statements are used directly as inputs into the idea generation and evaluation process.

Using systematic innovation methodologies, rather than the house of quality, for the innovation process not only makes it simpler, it eliminates three significant sources of error and variability:

1. They can move beyond company-defined metrics to guide product concept innovation, they eliminates the errors that creep in when company employees attempt to restate customers’ inputs. Furthermore, customers’ rankings determine how outcome statements are prioritized for development, a great improvement over the house-of-quality method, in which company employees do the prioritizing.
2. They trade hit-or-miss brainstorming sessions with targeted opportunity cultivation. The more important (and less satisfied) a desired outcome is, the greater the opportunity for value creation.
3. The product’s competitive position does not have to be decided before the concept is devised. It is wrongheaded to choose a competitive position before the concept is even devised. By devising a solution that successfully addresses the best opportunities for growth, such a competitive position is automatically achieved.

The technical innovation process relies on the product concepts that result from the concept innovation process. Detailed design and manufacturing decisions are made during the technical innovation process, which results in a complete and detailed product and process design. Innovation at this stage focuses on determining technically how a product will work and exactly how it should be produced. The challenge in product development is to assure the successful realization of the promising concepts.

Conclusion

Because the successful execution of the innovation and product development processes is now recognized as a prerequisite for corporate growth, there is a renewed interest in tools and processes that can help bring insight and competitive advantage to these complex and often misunderstood processes. The time has come to retire the traditional house of quality and to institute the renovated version and its associated tools for product development. By adopting systematic innovation methodologies and tools,companies will place themselves at the forefront of the new era of growth through innovation.

Note: To read an extended version of this article, please click here.

About the Authors:

Anthony W. Ulwick is the founder and CEO of Strategyn, an innovation management consultancy firm based in Aspen, Contact Anthony W. Ulwick at ulwick (at) strategyn.com or visit http://www.strategyn.com.

Richard E. Zultner is a Strategyn business partner, a recipient of the International Akao Prize for QFD, a QFD Red Belt® (one of two in North America), and a director with the QFD Institute. Contact Richard E. Zultner at richard (at) zultner.com.

Richard Norman is a consultant with Strategyn and has a long prior career as a QFD practitioner. Contact Richard Norman at rnorman (at) strategyn.com or visit http://www.strategyn.com/.