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QFD Turns Diversity into Corporate Innovation

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Just take a look at recent social events and political scenes, and one can see how important diversity has become in America. With unprecedented globalization today, diversity is no longer confined to one country's political and social boundaries. It is now a matter of strategic importance and survival, regardless what your company sells and where your business is located.

In the book "The Real Eve," Stephen Oppenheimer says that without genetic diversity, species "lack the flexibility to survive and adapt to the various stress imposed upon them." In analogy, we can say that companies that have employees of diverse background, ethnicity, religion, thinking style, etc. would have more ways to view and solve a problem and thus are better equipped to respond to market changes.

This notion has gained scientific endorsement: In his book "The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools and Societies," Scott E. Page demonstrates through mathematical modeling that diverse organizations are indeed more productive, resilient, and adaptive than homogenous ones.

The question then is ...

Let us look at one case study by Blue Cross Blue Shield of Florida (BCBSF), presented in September 2007 at the 13th International Symposium on QFD in Williamsburg VA.

BCBSF has over 9,000 employees within its walls, each with an idea how the company can increase their business, reduce costs, and differentiate products and services from their competitors. Florida, already one of the most diverse states in the U.S., is expected to see its population further diversify, resulting in significant changes in demographics in coming decades. To stay competitive and to achieve market penetration goals across all ethnic groups, the company has to deliver superior competitive value to increasingly multicultural markets by creating loyal customers with unparalleled products and service and culturally relevant experience.

BCBSF is an experienced QFD company, having many key employees trained in the QFD Green Belt® and QFD Black Belt® programs of the QFD Institute. For this special project, the Innovation leaders teamed up with Glenn Mazur to implement "Reverse QFD" in order to harness the rich tapestry of multicultural voice of the employees and their click to view Reverse QFD diagramcreative ideas to identify new market opportunities and competitive strategies that will resonate with the health care needs of the Florida's minority populations.

In Comprehensive QFD, there is a technique called Technology Deployment. It is used to assure the quality of new technology concepts as they are being developed. One variation of this is Reverse QFD in which concepts are generated internally and then mapped back into customer needs. Key needs are then identified through prioritization and used 1) as a criteria to select which concepts to pursue, or 2) to fine tune the new concepts for usability and better market acceptance. This case study used the former (see Figure 1).

Since BCBSF's diverse employees are also healthcare consumers themselves, their input also represents others in the community. The ideas submitted by the employees through the Innovation Blue web site, a non-biased forum to solicit innovative ideas from employees, were analyzed using Modern QFD's Customer Voice table. These verbatims included suggested actions, products, or solutions and had to be translated into underlying needs (Table 1).click to view Diversity Customer Voice Table

The exercise shown in Table 1 yielded over 100 customer needs from 14 employee suggestions. How could so few ideas yield so many needs?

In the translation process, one idea might lead to five or more needs. Sometimes the same need will be generated from different ideas. Other needs are less obvious than the example given in Table 1. In one case, the employee requested she be called if more information was needed and gave her full telephone number, including area code. This could be easily dismissed as nothing more than a courtesy, but a good VOC analysis might probe deeper. Giving full phone number could imply that this employee believes this program may be run by someone outside the area, outside Florida, and perhaps even outsourced outside the U.S. What customer need could we translate from this? Perhaps, "I want to do business with a company that is close to my community," "I need to understand health issues common to my ethnicity," etc.

In a standard QFD, the next step would be to take the customer needs to actual customers and have them structure the needs with the affinity diagram. In reverse QFD, the concepts are already created at the start, so the affinity diagram may not be necessary. However, correcting the levels of abstraction is critical for the next step, prioritization with Analytic Hierarchy Process (AHP).

There are different ways in which customers can be surveyed for this, including personal interviews, by telephone, by mail, or even by web. The preferred way will depend on the ethnicity, age, etc. of the community, and employees who are members of that community can make recommendations. This case study used the web-based AHP software, Expert Choice® which BCBSF has used on other QFD projects with great success. Additionally, representative employee groups that were established in those projects will also participate in this affinity diagram exercise as they represent their respective ethnic groups in the customers' community.

Once the customer needs have been prioritized, we can use them to identify which Innovation Blue ideas should be developed into concepts, fine tuned, and deployed through the organization into the market. If there are a small number of needs and ideas, the simplest way may be to use the Customer Voice Table to identify which idea generated the most important needs, and then to evolve those into workable concepts. If the data set is large, we can use the needs and their ratio scale priorities as selection criteria in AHP's "alternative selection mode." In either case, this work can be done by the QFD team.

The modern QFD methods described here can be easily applied to any industry and organization seeking to improve the diversity of their staff, customers, and supplies and to harness the power of diversity to increase competitive strength. Although BCBSF's products are mainly health care insurance products and services, these methods can be also applied to any new product and service development, including financial product development, software/hardware, manufactured goods, etc.

The QFD Green Belt® Course includes hands-on practice of these methods as well as AHP and other Modern QFD techniques.

In conclusion, the BCBSF team reported, "The QFD process gives us a way to harness all the creative energy of our employees in a way that is efficient, transparent, and gives equal voice to all."

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