The Kano Model

The Kano model is more narrowly focused than the former two models discussed. Named for Dr. Noriaki Kano and widely described in the literature, ^[8], ^[9] the model is aimed at capturing the voice of the customer for requirements for products and service. Originally conceived in the 1970s as a quality tool for obtaining a good match of customer need and product feature and function, project managers can apply this tool not only for grading requirements but also for evaluating budget allocations and priorities, and for assessing qualitative risks. In this regard, Kano models are quite useful for project managers who must make dollar decisions about where discretionary funds can be best leveraged for business value.

Kano really only addresses two of the focus areas already described: customer perspective and product excellence. The Kano model pretty much ignores operational effectiveness, except as operational effectiveness is reflected in product or service quality that influences customer satisfaction. Of the three models, the Kano model is very tactical and applies readily to projects.

The Kano model is most often represented as a graph, with two axes as shown in Figure 1-4. The vertical axis is the customer satisfaction scale, reaching from very satisfied, to indifferent in the center, to very dissatisfied. Although a numeric scale is not often used, project managers seeking more quantification could apply a scale. ^[10]

Figure 1-4: Kano Graph.

The horizontal axis is product or service functionality or performance. To the right is desired or available functionality or performance, with stronger desire or need represented by a farther distance outward from the center. To the left is missing functionality or poor performance. Again, the same ideas of numeric scaling could be applied to this axis. In the center is a neutral area in which functionality is unevaluated, but also this is where the center of the customer satisfaction axis crosses.

Of course, the axes are laid out on a graph to cross at the center and provide an orthogonal space in four quadrants suitable for plotting. In this space, a set of curves is plotted. Let us consider the first quadrant in the upper left of the plotting space. We see this illustrated on the Kano graph. In this quadrant, customer satisfaction is increasing, but there is little expectation for functionality. In this space are latent, or unspoken, requirements — missing functionality but also unknown or unappreciated by the customer. In the upper left quadrant there is little or no impact on customer satisfaction. From the project management perspective, this space means that no investment need go into filling the missing functions since they have little impact. However, there is opportunity insofar as a function or feature might be "promoted" from the upper left quadrant to the upper right quadrant.

The upper right quadrant is the "ah-hah!" space where the customer recognizes increasing, available, or known functionality as real value add. Kano calls this the customer delight quadrant. In the upper right quadrant are functions and features that the customer did not know were wanted until the functions were revealed. This is the quadrant of "home runs" and new-to-the-world product risks. Spending is discretionary in the upper right quadrant. For the project manager, requirements plotted in the upper right quadrant carry above-average risk, increasingly so as the plot moves farther from the center origin. The impacts on cost management and schedule are more probable, making their risks rise to the top of the list of risks to be watched.

Moving to the lower half of the plotting space, we next consider the lower right quadrant shown on the Kano graph. This is an area of distress. The customer is not satisfied in spite of function, feature, or service that is provided. The project manager is compelled to address these requirements, dedicating resources to their fix. Resource allocation to this quadrant competes with the resources that might or should go into the upper right quadrant. The project manager, along with other team members, particularly whomever holds the best relationship with the customer, must make the call about resource contention between the upper and lower right spaces.

Finally we come to the lower left quadrant. This quadrant is the flip side of its cousin above. If functionality is missing or poorly provided, the customer is unhappy, perhaps very unhappy. This quadrant consumes resources for the needed fix, competing with the other two (upper and lower right) as shown on the Kano graph.

There is actually a fifth space, really only a line: the horizontal axis. Along this axis, function and feature may be provided, as on the right side, or not provided at all, as on the left side, but the customer cares not one way or the other. This is the line of total indifference on the part of the customer. In fact, we plot the first of our curves along this axis and label it the "I" curve for indifference.

What may lie along this axis? Actually, quite a lot usually goes here. Project managers put all the regulatory requirements, whether internal or external, on this axis. What about risk? Well, some of these requirements may carry quite a lot of risk but add nothing to customer satisfaction, at least as perceived by the customer. Certainly the project manager should take no more risk than necessary and challenge any new additions to the "I" requirements.

There are three other curves that are more interesting. ^[11] The first is the "L" curve, or the linear line that extends from the lower left to the upper right through the center. This is the "more is better" line. For features represented on this line, providing "more" simply increases customer satisfaction. A good example is computer memory: more is better, always! Correspondingly, a lack of memory will upset the customer, and the more missing the worse will be the effect. From the point of view of meeting the competition, it is almost mandatory to fund these requirements, at least to some degree, to stay in the race. Commensurate risks must be taken, or else product obsolescence will doom all future sales.

A third curve is the "M" curve, which stands for "must be there." The "M" curve is shown in Figure 1-5. Running along the horizontal axis on the right side, and dipping into the lower left quadrant, the "M" curve is appropriate where the presence of a function raises little reaction with the customer, but if the function is missing, then there is customer dissatisfaction. With requirements of this type, the project manager should take no risks and invest only that which is necessary to maintain the function without adding to it. Now, there is opportunity to "promote" from "M" to "I". Did Apple make this move when it dropped the floppy disk drive in its desktop computers?

Figure 1-5: Kano Curves.

Perhaps of most interest is the "A" curve, which stands for the "ah-hah!" reaction. It is the mirror image of the "M" curved flipped around so that it runs along the horizontal axis on the left side and then rises into the upper right quadrant. Requirements along the "A" line do not upset the customer if missing but engender a very favorable reaction if present. If acted on, "A"s are the requirements of greatest risk, perhaps new to the world. "A"s require the most attention in terms of funding, risk management, and performance measurement.

Table 1-1 provides a summary of a potential product analyzed with the Kano model. Here we see a list of requirements that are characterized by their funding need, risk potential, and fit to the Kano plot space.

Table 1-1: Kano Example, Personal Computer
Requirement	Funding	Risk
Packaging and eye appeal	Discretionary investment targeted for high returns	Take all necessary risks to assure success
Faster CPU and larger memory	Constant refreshment required; reserve funds to meet needs	Take prudent risks to maintain market acceptance
FCC compliance	Mandatory funding to meet minimum requirements	Take no risks not essential to meeting compliance specification
Floppy disk drive	If market demands, fund lowest cost supplier	Take no risks; mature device
CD-RW drive	Initially, discretionary investment targeted for high returns	CD-RW decays to M quickly; minimize risk to balance rewards

^[5]Kaplan, Robert S. and Norton, David P., The balanced scorecard — measures that drive performance, Harvard Business Review, pp. 71–79, January–February 1992.

^[6]Treacy, Michael and Wiersema, Fred, Customer intimacy and other value disciplines, Harvard Business Review, pp. 84–93, January–February 1993.

^[7]Treacy, Michael and Wiersema, Fred, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, Perseus Books, Cambridge, MA, 1996.

^[8]Kano, Noriaki, Attractive quality and must-be quality, Journal of the Japanese Society for Quality Control, pp. 39–48, April 1984.

^[9]Shiba, Shoji, Graham, Alan, and Walden, David, A New American TQM: Four Practical Revolutions in Management, Productivity Press, Portland, OR, 1993, pp. 221–224.

^[10]The scales applied to the Kano model need not be linear. Indeed, a logarithmic scale going from the center origin toward the outer reaches of satisfaction, both positive and negative, could be quite helpful if there is great range to be plotted. Or, the logarithmic scale could be applied to product functionality, left and right. Applying a scale to one or the other of the axes creates a "log-linear" plotting space. Of course, project managers familiar with logarithmic scales will know that a straight line plotted on a log scale will be a curve.

^[11]In the original Kano model, which grew out of work in the 1970s for the camera company Konica, there were in fact only three curves. The "I" curve along the axis was not included. Kano named his three curves a little differently than as presented here. Kano's names were: "excitement" for the curve this book calls the "ah-hah!" reaction, "performance" for "more is better," and "threshold" for "must have." Many references in the literature use the original names. Dr. Kano's research objective was to model "attractive quality" and distinguish that from "must-be" quality. "Must-be" quality was seen as a minimum or threshold to customer satisfaction. Below this threshold, customers would object; at the threshold, customers would not notice or would not make a competitive buying decision one way or the other.