The cost of quality

Geoffrey Keating
Apr 12, 2018 · 2 min read

I’ve recently finished reading 101 Things I Learned in Engineering School. It’s a simple, straightforward crash course for anyone with an interest in engineering, design, or mathematics, or simply for anyone who has ever wondered why buildings stay up or machines keep running. There are words of wisdom for engineers, but more importantly it contains dozens of simple abstract principles that can be related to real-world circumstances.

The entire book is worthy of your attention, but it was the section on quality that stayed with me:

Few customers will pay for a perfectly engineered product.

Customers notice and are willing to pay for improvements to low quality products more than high quality products. A 10% improvement to a low quality product will lend more than a 10% increase in the value of quality — the user’s perception of its quality. But as subsequent improvements are made, they add value at a decreasing rate. If a 10% quality improvement costs $10, a 20% improvement will cost more than $20. Eventually, the cost of improving quality increases at a faster rate than the improvement will be perceived. The optimal quality-cost state theoretically occurs when the slopes of the value and cost curves are equal. At this point, the rate of improving a product equals the rate at which costs to the producer will increase. Beyond this point, the producer’s cost for providing one more unit of quality will exceed the value the customer will perceive.

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The takeaway here is that quality is valuable up until a certain point, but at a certain point has diminishing returns. Polishing every single sentence, perfecting every pixel or fixing every last bug will likely give you the dopamine hit we all get striving for perfection, but it’s unlikely to add significant value to the end consumer.

It also limits your ability to focus on things that do add value. You can make the best, most polished saddle out there, but if the market has moved on from horses to cars for general transportation, it would be wise to divert your attention elsewhere.

Recognizing that inflection point — the point at which our pursuit of quality reaches a law of diminishing returns — is one of the hardest skills to learn, but also one of the most necessary. You have to weigh the value of continuing to hone and perfect the existing with knowing (or at the very least being able to decide) when good enough is enough.

It also requires understanding that nothing is perfect and waiting for the perfect moment or killing yourself trying to ensure that every thing your hand touches is done perfectly is a sure way to not get anything done at all.

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