To keep pace with the revolution, the way we manage quality must undergo fundamental change. To keep achieving success, the most important factor is having the courage to try something new, as well as hard work and innovative capacity. Our contributor Dr. Benedikt Sommerhoff tells us how this can be achieved.
We are on the precipice of a fourth industrial revolution. The revolution began quietly, many years ago, and has now become more and more insistent, and will continue to advance over the coming decades. The revolution is felt and made real for many of us in our daily life and career: Today we take technology and services for granted that we would have thought were works of science fiction just a few short years ago. One striking example of this is the Apple iPhone, which has just celebrated its tenth birthday, and which has many equal competitors today. The iPhone changed billions of peoples’ lives, both faster and with more impact than the invention of electricity, cars or computers. We take this for granted because, despite these milestones, we experience technological development as evolutionary rather than revolutionary. However, the societal changes this engenders are revolutionary.
Just one person can shake up stocks, threaten political alliances and stir up the whole world with just one 140 character post. Extreme automation – not just of logistics and handling but, most of all, of office activity – is going to replace millions of jobs worldwide. This is not at all dissimilar to the first industrial revolution, which changed the face of the world, the nations and society as a whole irrevocably. Germany is a saturated country: Its society has achieved much over the past decades and therefore has much to lose. We are in a nationwide comfort zone: Our machine construction and automotive industry are second to none.
We are currently losing pace as we have ignored data-based business models, autonomous driving and electromobility for a long time. Our key industries are really at risk as they are being attacked by very new technology companies and start-ups which are now giants, like Tesla. Many German automotive managers say that Tesla has yet to break even. Tesla has been skirting bankruptcy, they say. But so what? Elon Musk’s goal for Tesla doesn’t appear to be making money. He has a vision and is on a mission to change the world, which he is doing. Is Tesla immoral because it tests new technology in real vehicles, and people die in the process? If autonomous driving happens two years earlier than expected, potentially many thousands of people will be prevented from dying because it is safer than human driving. Experts say that the German automotive industry is technologically more advanced than Tesla. However, these advances have yet to make it past the laboratory doors. They haven’t arrived on the streets. This demonstrates a fundamental difference between the new 4.0 companies that are beginning to shape the USA and Asia and the old 3.0 industries that set the stage in Germany.
The new companies adapt to change, are disruptive, agile, excellent at implementing, visionary, iterative, experimental – and several are incredibly successful in terms of profit. Germans love hardware, like thinking everything through, prioritize safety, are slow and, some may even say, arrogant. German companies grew into their specialisms and specialized themselves for the third industrial revolution. The fourth revolution, however, has completely different parameters. The Internet and the Internet of Things constitute the technical core of Industry 4.0, just as the steam engine was the core of the first industrial revolution, but the revolution isn’t the technology itself but is rather in the sense that the Internet is creating a new and novel social activity hub which has really opened up during the last few years. Completely new business models and paths to success are created within the Internet and for it. If we use the Internet just as a technical networking tool, or as another channel for transferring data, then we have not harnessed its full potential. The Internet enables us to constantly interact with our clients, for instance, and creates an entirely new set of requirements.
Agility is a key competence in the fourth industrial revolution. Agility here is taken to mean the rapid, adaptive and proactive capacity to change. This capability can even transform the playing field itself. Agile companies can reorient themselves in a flash and invent and implement new methods and products. Agile organizations are therefore not especially hierarchical as their employees are all linked together, both internally and externally – they are person- and requirement-focused. This is different from us: The typical German company is innovative and flexible, but it is not agile and is non-disruptive.
We are already seeing a few agile companies coming through, or agile sectors in companies, particularly in the development sector. They work with agile methods, such as Scrum and design thinking. Their culture is completely different from traditional German corporate culture: Their structures, regulations and systems are not like the ones we are used to. Therefore classic quality management approaches no longer function in them, and might even cause friction and roadblocks. We therefore need new quality management approaches that are suited to agile culture. This is not because previous quality management is somehow wrong, but because requirements, demands and opportunities are undergoing fundamental changes in the course of this huge industrial revolution. It’s up to us – the management, engineers, IT experts in companies – to roll with this new dynamic, and not to be governed by fear but by that spirit of innovation and design which we channeled so well for industry 3.0. We must get onboard with the novel mechanisms of this digital transformation. It is also our responsibility, as quality managers, to reinvent quality management right from the ground for this completely new world.
The German Association for Quality (Deutsche Gesellschaft für Qualität, DGQ) has heralded the dawn of this new era and has decided to act together with the pioneers of this digital transformation and redesign quality management. One basis for this is the manifesto for agile quality management, which was developed by expert groups at DGQ. Within this manifesto, seven agile principles are defined, which are based on the revised ISO 9001. These could help companies to reorient themselves.
Benedikt Sommerhoff is the Head of Innovation & Transformation at the DGQ, the German Association for Quality. He has been active in various expert and managerial positions at DGQ for the past 18 years. He is currently working with colleagues and members of the DGQ on future topics which will influence and impact on the economy and society, and particularly the world of quality management. In the QLAB, the DGQ’s design and concept laboratory, new and innovative solutions are produced for DGQ and other organizations under supervision from his team.