Week 17 Part 2:  The relationship between Quality, Grade and Requirements….

…. and why being clear about each matters

This post is a catch up from week 17 where we had a spontaneous discussion about the relationship between quality and requirements and why improving the grade of a product or service will normally add cost, but improving quality will normally reduce cost.

The idea that increasing quality reduces costs seems counter-intuitive, but that is only because we’ve not understood what “quality” is, and importantly, how it is distinct to “grade”.  So here are some definitions of each from ISO9001, as defined by the International Standards Organisation (ISO):

Some definitions:

Requirement:  A need or expectation that is stated, generally implied or obligatory.

Quality:  The degree to which a set of inherent characteristics of an object fulfils requirements.

Grade:  The category or rank given to different requirements for an object having the same functional use.  For example, the class of airline ticket and category of hotel in a hotel brochure.

-Thanks to the International Standards Organisation (ISO) for the definitions. (https://www.iso.org/obp/ui/#iso:std:iso:9000:ed-4:v1:en)

And for clarity, “Object” is defined as:

An object is any entity that is either conceivable or perceivable. Objects can be real or imaginary and could be material or immaterial.  Examples include products, services, systems, organisations, people, practices, procedures, processes, plans, ideas, documents, records, methods, tools, machines, technologies, techniques, and resources.”  http://www.praxiom.com/iso-definition.htm#Object

Given that we are using ISO9001 definitions, I suppose it’s only right to explain a little about what it is.

“The ISO 9001 standard provides a framework of globally recognised principles of quality management, including: customer focus, leadership, involvement of people, process approach to management, continual improvement, factual approach to decision making and mutually beneficial supplier relationships. These are also known as the eight key principals of quality management.”  – http://certificationeurope.com/what-is-iso-9001/

These definitions of Quality and Grade are applied across the world in the discipline of Quality Management.  In manufacturing, services, agriculture and pretty much anything.  Some industries have specific variants on the base standard, for example I was involved in managing an AS/EN9100 Quality Management System (QMS) when  I worked in the aerospace design and advanced engineering  sector, but that standard is essentially ISO9001 with some industry specific variations.

ISO9001 isn’t perfect, but it’s pretty good

It’s not all good news with these standards.  They can be bureaucratic to administer and whilst that’s fine  for a stable organisation in a relatively stable market, for a more dynamic organisation  in unstable markets, it can be difficult, if not impossible to maintain all company procedures appropriately documented and audited, as certification  requires.

That was certainly my experience later when playing a leading role in transforming a construction company into a primarily logistics oriented one as a result of the highly unstable market conditions that existed post the 2008 financial crash; and the need for us to develop new services for new customers to stay in business.  The idea of  maintaining a fully compliant ISO 9001 QMS in that situation  is hard to square away. Similarly, it shouldn’t be allowed to constrain any positive change or transformation in an organisation.  It is not intended to, but through  it’s (inappropriate) application, that can be problem.

So, it’s not without it’s problems, but at it’s heart it is a sound approach. For our purposes, what I think is really useful and important is how it defines Quality and Grade. To reiterate the definitions above;

  • Quality is about the degree to which requirements are fulfilled.
  • Grade is about what the requirements actually are compared to the requirements for other products in the same category.
  • Quality is independent of Grade!
Do we mean grade rather than quality then?

People often confuse the two, or simply don’t know there is a distinction.   I’ve foud this to often be the case in healthcare. In a sense, that’s fair enough.  Industries can use whatever terminology they like to mean whatever they like.  However, if “quality” means “grade”, then what word is used to refer to “quality”, or rather, services that don’t fully satisfy requirements? I’m not aware there is one.  

In practice,  I think they’ve been merged into a single concept. And maybe that’s ok. After all,  we are offering a standard service to all.  A single grade I suppose.  The difficulty,  is that it’s not entirely clear that we’ve formally defined, recorded and agreed the requirements  or purpose of our services and systems.  We found it hard to do this for a GP practice if you cast your mind back, and we weren’t aware of a Requirements Document we could refer to.  How do we know if we are fulfilling requirements if we haven’t defined and documented them?  

Leaky windows

It’s not unusual to hear people in our and  other industries say “we can’t afford to provide a higher quality service.” or similar.  This might be a problem though.  If we understand quality to be about the degree to which requirements are satisfied, rather than what the requirements are, then we can see that ultimately we can’t afford not to increase quality.  Why is this?

If the basic requirement of a car is to get the driver from A to B in comfort, and there is an aspect of it, a leaking door seal perhaps, that prevents it from  doing that, then the car will be returned to the manufacturer to be repaired.  Or the problem may be picked up by “Quality Control” before it leaves the plant and repairs are made at that point. There are costs associated to this.  The costs of identifying the problem, and then fixing it.  These costs are specifically associated to poor quality.  You have to fulfil requirements.  There are no two ways about it. You have to.  And if you don’t, you will have to pay to correct the problem.

Providing it satisfies the requirements of a typical buyer, a brand new Dacia without a leaky window is actually a higher quality car than a brand new Rolls-Royce with a leaky window.  Presuming both sets of buyers have a requirement to arrive at their destination dry.  Of course, the Rolls-Royce is a far higher “grade” of car though. It will have all sorts of additional requirements on it the Dacia doesn’t, such as speed, comfort,  the degree to which it impresses your mates, etc. Quality and Grade are independent of one another.

Increase Quality to reduce cost

In health services, there will be a myriad of requirements on any service, but for the sake of argument, let’s assume a basic and fundamental requirement on all health services is to diagnose and cure, or treat as far as is medically possible (given  NICE sanction) a presented condition. Ultimately, this has to be fulfilled, or patients will unnecessarily die, or live with  unnecessary suffering.  They and their relatives will know this, and so they will keep presenting, or be passed around different parts of the health service until the requirement is satisfied (assuming it can be).

This is all the cost of low quality.  And worse than that, if the requirement isn’t fulfilled quickly, their health can worsen, and ultimately cost more to put right.  I have personal family experience of this, and sadly, I imagine many others do too.

So, increasing quality in a health service is about identifying and treating conditions as quickly and appropriately as we can, whilst treating people as individually and kindly as possible and it is not about “gold plating”. That would be “Grade”.   When we talk about “getting things right first time”, this is what we are talking about, Quality.

A tough job in public services

I don’t underestimate how difficult this is to do in public  services though. I think one particular challenge we have is defining the requirements and in turn  the grade of the service we should offer.  We all have individual personal expectations and requirements for all things that we buy and consume.  Ideally, all products and services would be produced for us individually.  This would not be economical though.  To get around this, companies will segment their customers into groups, generalise requirements for each of those groups and produce offerings for each and importantly, charge accordingly.

If we think about laptop computers, manufacturers will produce a wide variety of models, each aimed at a different category of customer.  The medium performance, but robust build quality for the person who needs it for work, the cheap and cheerful basic machine for the home user on a budget, the high performance machine  for those who work with graphics, and the good performance in a shiny, slim package, for the trendy person who wants to impress their mates.  Each of the options described will be priced differently to reflect it’s grade.

One difficulty we have in public services is that we need to offer a standardised service for all.  We can’t “charge accordingly”. It’s not possible to do this, and satisfy everyone’s requirements, and so there is a lot of compromise and accommodation going on along  the way and effort to try to provide services that more or less satisfy most people’s requirements. A kind of service for the “average” patient.  

For health services, the core functional requirement of making people better will be the same irrespective of grade, but there will be decisions made around waiting times, length of time it takes to treat, and other service elements like comfort of facilities, and where services are provided (hospital, GP practice, or at home) etc. i.e. Non-Functional System, Non-Functional Implementation and Non-Functional Performance Requirements.

It seems to me that all of this requires debate at national and local levels between patients, taxpayers, government, commissioners, providers, suppliers, lobbyists, activists and probably others too, to come  to an accommodation over what the grade of services should be. This is no mean feet! There are a lot of stakeholders to accommodate in  public services.  It’s a much bigger job than a manufacturer has when categorising customers and  defining their requirements.  

This does beg the question how one goes about defining the concept of “Value” in health services, but let’s leave that for another day.  There’s also the  question of the role “Outcomes” play in all of this. A central one. We should also need remember what Jean Boulton had to say about the things that really matter often can’t be easily measured quantitatively. How does that fit with this approach to Requirements and Quality.  Lots of swirling questions for us to keep in mind as we continue this journey.

Does it really matter?

Why does all of this matter to we Systems Thinkers.  Well, as we’re discovering, “Requirements” are a very close relation to a system’s “Purpose”.  So quality is about the degree to which something  is “fit for purpose”.  Before we can determine whether a product of service is fit for purpose, we need to have a clear understanding of exactly what it’s “purpose” is, and that is exactly what we have been doing in this group.  You may not have realised you  were learning  about “quality” as well as problem solving and design, but you are.

2 thoughts on “Week 17 Part 2:  The relationship between Quality, Grade and Requirements….”

  1. OK, another long post from the lead STA, but as it was well-interesting, as my youngsters would say, I’ll forgive. Some positive reactions:

    – distinction of quality and grade: absolutely. Assuming requirements are well stated (if there are stated), then quality as a measure of how well requirements are met is spot on. Often the issue as to whether customers agree about the quality (or level of quality) versus opinion of a provider can be: that (some) requirements have been left implicit or tacit – so managing expections can be of utmost importance.

    – the comment about ‘one size fits all’ etc above, economies of scale (don’t get be started…), etc. Interestingly I’d argue that the UK healthcare system routinely (as it should) actually provides a bespoke response to customer/patient care at the moment: every patient is different, every patient’s case is (to some degree) different, patient’s pass through individual care pathways in their diagnosis and treatment. Interestingly, with contemporary information handling/IT capabilities, handing the information side of bespoke care is entirely possible – companies are increasingly doing this at the customer AND product level (just registered for my Dyson account when I bought a replacement filter, and I can register my individual Dyson devices). And it is that bespokeness that to me makes me wonder whether it is probably Agile approaches that may be more relevant to healhtcare improvement than the Lean approaches (waste reduction) that tend to get highlighted by the ‘economies of scale’ brigade. But as Jean Boulton might have said ‘appropriate techniques’ (she probably didn’t, I just imagined it).


    1. Interesting point about whether health services are standardised or bespoke Julian. Something to think about more. Reminds me of some research I did into Innovation in Services a while back. Here are a few lines about types of services from the report I wrote.

      “They* also propose the following alternative categorisations:

      • Wholly standarised services
      • Largely standardised services
      • Bespoke services
      • Partially customised services

      This categorisation is softened though through the caveat that these categories are not mutually exclusive. For example, a “largely standardised” service can be “partially customised” through a process of co-production in partnership with the customer. Whilst this categorisation isn’t absolute, it does draw attention to the adaptable nature of services and these categories do appear to tend towards incremental rather than radical innovation.”

      *Love, J. H., Stephen, R. & Bryson, J. R., 2011. Openness, knowledge, innovation and growth in the UK business services. Research Policy, Volume 40, pp. 1438 – 1452.

      Something I’m thinking, is perhaps the NHS provides a range of standardised services, that are put together into a customised package of services for individual patients. More thinking on this is needed I think.


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