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Archive for September, 2011

Change Management – Is it as Simple as Just Seeing Clearly?

September 29th, 2011 5 comments

Change management - Use VOC and VOB to objectively identify performance gaps that matter mostWe’ve been working with a number of customers of late that are trying to improve service delivery processes, and move into the differentiating realm of service innovation.  In these very large enterprises, it’s always a challenge to get organizations to change behavior.  Immediately, voices start rising, touting the need for change management.

This is another of those terms that can have a lot of different meanings to a lot of different people.  Wikipedia defines change management as a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state. If you google “change management”, you really enter the swamp.   Even if we narrow change management to the business / process improvement world that we at SSQ live in, there is still a lot of confusion.  How do you sort it all out?

Download Business Process Management (BPM) Overview

our BPM Overview presentation

In the CI world, companies want and need to markedly improve their value-generating processes (value stream), but the question becomes how do you get people to embrace the changes that come as part of improving?  How do we get them to embrace the overall effort to improve processes, and theoretically improve service delivery?  Do we really have to indoctrinate them into some new philosophy of change?

Personally, I don’t think so.  I think that many times change management becomes a problem because people don’t have a clear picture of 3 simple (not really) things:

  1. where they are now,
  2. where they need to be
  3. why they need to get there.

Most organizations have plenty of smart people (I know … there are exceptions!)  .  The fundamental trick to change management really boils down to getting all those smart people pulling in the same direction.   If you can get clarity around the 3 simple things above, you might be surprised to see that change management is not the big issue you thought it was.

I’ve used the term simple to describe these three things above, but getting there can be anything but.  With our engagements, we spend significant time on the front ending trying to get these answers, and I can assure you that it can be challenging.  But, we get there, and I firmly believe our success rates with business improvement efforts are better because of it.

There are other ways I’m sure, but we use a structured approach that attacks the problem by:

  1. Understanding, for both the customer (voice of the customer) and the business (voice of the business), what constitutes high-performance and turning that into clearly defined metrics (efficiency and effectiveness).  We are looking for gaps in these indicators, between current state and where we need to be.
  2. Understanding the top-level value stream from a process perspective (not function), the things that have to happen to deliver your services or products, and create customer and business value
  3. Identifying metrics at the process level (VOP), and making sure they are aligned with top level VOB and VOC (#1).  Like #1, we are looking for the gaps.
  4. Defining an objective prioritization scheme based on voice of the customer and voice of the business.
  5. Identifying improvement ideas from the gaps, and evaluating and prioritizing those ideas objectively based on #4.  A prioritized project pipeline.
  6. Turning high-value project ideas (business cases) into tightly scoped improvement projects that are clearly aligned with very visible objectives (#1)

Of course, this is over simplified. There’s a lot of work happening between the spaces, but think about it and ask … Is change management really as simple as being able to see clearly? As always, I welcome your thoughts on this.  Comment or contact me directly if you prefer.

Lean Process Improvement / Lean Enterprise – A Key Element of a Pay-as-you-Go Approach

September 22nd, 2011 2 comments

I talk to companies every day about how they can best roll out business performance and process improvement programs.  Now, just to level-set, we aren’t zealots here pushing any one-size-fits-all model for programs. We do have some key principles that we adhere to when designing programs though. One of these is that it’s likely not feasible to have a program that builds infrastructure and trains for many months, before ever delivering any quantifiable return. That is simply not the world most of our clients live in these days.   Our philosophy is that it is always advantageous for the program to deliver near-immediate, visible, and quantifiable impact.

When looking at an enterprise, more often than not, we find that basic process management/improvement and Lean (i.e. Lean Enterprise, Lean Process, Lean Manufacturing, Lean Product or any of the other labels floating around out there) can solve a lot of high impact business problems, without incurring high training and infrastructure costs, and are the right place to start.

Lean Process Improvement efforts can yield big results fast, without big investment or big risk …

 

ROI from Lean Program However, I get a lot of questions dealing with how an organization can get started with basic process management and Lean Enterprise, and how to fit in to an overall, enterprise wide process improvement / CI program strategy.    This is a good question in that, in the past, it was almost always preached that Process Improvement deployments (Six Sigma, Lean, etc) had to be top-down.  Start with executives to get support, develop champions, select projects, train black belts, build a 3-year plan, etc, and grow from there.  The challenge with this approach is that it requires a hefty up-front investment and it takes a long time before results are seen.  Read ….. high cost .. high risk!

our new Lean QuickStart powerpoint presentation.

In today’s business climate, this is simply not palatable for a lot of organizations.  For them, an approach that is much less top-down, and much more focused on near term, bottom line results may be far more attractive.  So, here is an approach sequence that I’ve seen effective over and over

  1. Work with business leaders to identify pilot areas of the enterprise
  2. Identify specific focus areas and business cases in that area(s)
  3. Refine those down to a set of well-defined project charters, segmented by the nature of the problem (defect, cost, cycle time, etc), scale, and perceived complexity.
  4. Select a set of low-hanging-fruit projects that can likely be solved in a relatively short amount of time and with basic lean and quality toolsets
  5. Run 1 or more workshops with specific project teams, with specific well-defined projects that can be executed in 2-5 weeks.
  6. Track real savings and ROI on projects, and publicize/promote heavily internally
  7. After one or more workshops, train champions /sponsors and develop a formal project selection and prioritization methodology (see my recent post on this).  Refine continuously.
  8. Continue with more workshops, to a broader segment of the enterprise

Processes are cleaned up, waste and complexity removed, measurement systems are put in place, and real bottom-line results are realized.  Results drive interest and commitment, so it becomes easier to get the broader organization engaged.  For enterprises that have done little formal process improvement work (or a lot for that matter), there will most assuredly be many Lean projects to be executed, yielding fast and consistent results. And, soon enough, larger and more complex problems that require higher level capability (e.g. six sigma) will show themselves.  Then, and only then, do you bridge up to and invest in the next level of capability …. Pay-as-you-go.

These efforts can easily and painlessly run in parallel with and, indeed, support and pay for the broader activities that are required to make the overall process improvement effort successful long-term, namely identifying CTQ measures for voice of the customer (VOC) and voice of the business (VOB), characterizing value streams and establishing process indicators and metrics, building a mechanism to constantly identify high value improvement opportunities (i.e. project pipeline), and constantly defining and executing improvement projects.

Contact me if talk about whether this model could work for your enterprise.

Voice of the Customer (VOC) that’s Meaningful and Actionable – Remember the Kano Model …

September 15th, 2011 Comments off

Voice of the CustomerCapturing Voice of the Customer (VOC) is a critical first step in aligning your product or service delivery organization to the real needs, wants, and desires of your customer. Pretty common sense, right? But, when someone says “I’ve captured the voice of the customer”, what does that really mean?

Any interaction with the customer is an opportunity to capture VOC, but I would argue that a more proactive and structured approach may yield more useful and actionable information from the customer. Understand what’s important, from the customer’s perspective, clearly define it and make it measurable, then measure your performance. Sounds simple, right?

 

Download a short training module that discusses Critical to Customer Requirements

a short module on understanding customer requirements and the Kano Model

 

Well, not so fast. The relationship between how you perform and what the customer sees as real value is not always simple or direct. Many times, organizations are left utterly bewildered after making some “major” performance improvement only to find that the customer never even noticed! I’ve even seen a case where a business process outsourcer assumed an agreed upon SLA was their VOC, met every single measure in that “VOC”, and then lost the customer! How could this happen? Well, the customer expected them to optimize and improve the process for them, not just run it at current performance levels and meet the SLA. Their ideas of “Value” were very different.

Voice of the Customer - Kano ModelOne good way to look at customer requirements is through the lens of the “Kano Model”. Dr. Kano developed a model of the relationship between service or product delivery performance on the one hand, and value as perceived by the customer on the other. It is very simple and can be extremely useful in understanding the relationship between what you do and how that relates to what the customer perceives as value. The model defines 3 categories of customer requirements: basic, performance, and excitement.

Basic. These are the requirements that are just taken for granted. Customers will rarely mention them, because they are just expected. In the airline industry, getting to your destination in one piece is an example of a basic requirement. No matter how well you deliver on basic requirements, your customer will never be more than neutral in terms of satisfaction or perceived value. But fail to deliver one of these requirements and you can bet you’ll have a very dissatisfied customer, one that is likely to be out the door.

Bottom Line: Basic requirements are really only noticed when they aren’t met …..

Performance. These are the things that customers want, but don’t necessarily expect in all cases. They are the things that usually make up a service level agreement (SLA). Performance characteristics include faster service, lower cost, higher reliability, etc. They are usually stated by the customer, in some detail, and meeting them will drive customer satisfaction to some degree, and sales. But they do not guarantee customer loyalty (e.g. earlier example of business process outsourcer that lost customer after meeting SLA).

Bottom Line: Meeting performance requirements will drive near term customer satisfaction and sales, but will not guarantee customer loyalty.

Excitement (Wow). Excitement attributes are unspoken and mostly unexpected by customers but can result in extremely high levels of customer satisfaction and loyalty. Their absence doesn’t lead to overt dissatisfaction. Excitement attributes often satisfy latent needs – real needs of which customers are currently unaware. In an ultra-competitive marketplace where multiple vendors’ offerings provide similar levels of performance, delivering on excitement attributes that address “unknown needs” can provide a competitive advantage.

Bottom Line: Delivering on Excitement attributes drives customer satisfaction, new sales, and and customer loyalty. It enables the charging of a premium for goods and services.

One final thing to keep in mind is that this is a moving target. Today’s wow factors will soon become just basic requirements. Think about what was a “wow” factor on a mobile phone just a few years ago, and where things are today. Don’t sit still. Getting VOC is never a one-and-done.

Feel free to contact me directly to discuss how you might improve your efforts to capture voice of the customer (VOC).

Voice of the Customer (VOC) vs. Voice of the Customer (VOC) ??

September 9th, 2011 1 comment

For service organizations seeking to grow, excellent service delivery of existing offerings instills trust with the customer. That trust is the cornerstone to successfully launching new services. But the goodwill of that trust can only be leveraged if new service offerings provide NEW value. And excellence in what you do doesn’t guarantee providing that new value. To put it another way, doing something well for someone doesn’t mean you will add value in everything new you can think of or be asked to do for them in the future.
What is common between delivering on current services and new services is the ability to execute. What is different is that the Voice-of-the-Customer (VOC) is well defined in the former case and has yet to be defined in the latter. Defining VOC well is a function of listening well. Execution and listening are critical to both situations. Execution has the same definition in both cases. But the two situations call for two different types of listening.

How does the listening differ? Well, in Service Delivery the target had been acquired at the time of the sale. Therefore, you are listening to determine if you are hitting the target and, if not, how you’re missing and by how much.  In the case of new service design, you are trying to acquire the target. When delivering existing services, customer requirements are well known and VOC must be collected on how well you are performing vis a vis those requirements. With new services, you are more heavily involved in defining customer requirements.

Download a short training module that discusses Critical to Customer Requirements a short training module that discusses Critical to Customer Requirements


Too often, I see companies launch new services with confidence based on their ability to stay tuned to a specific target and hit it consistently only to fail with a new service launch. The reason they failed is that they never properly defined the new target. Staying on a target and finding a new target are really very different.

For Service Delivery, the primary “listening” or “targeting” challenge is how to (i) monitor VOC and (ii) convert VOC to Critical to Quality. To launch new services, the primary “listening” or “targeting” challenge is to define the value to be delivered per the customer or define Critical to Customer Requirements.

In the end, service delivery VOC is about how to understand your processes while the VOC needed to successfully launch new services is about understanding the customer’s unexpressed needs.

If you would like to discuss, contact me directly.