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Voice of the Customer for Service Design – Are you Getting It … Really?

September 6th, 2012 1 comment

We have just finished working with a large international services company which has had challenges rolling out new services.  The most difficult aspect of their business was in discovering the real customer requirements, and converting those requirements into service requirements and, ultimately, a service design.  Like many service companies, they just have an immature process for this.

rorschach_inkblotThe service design team is essentially the sales team. They get multiple voices from many parts of both their organization and the client.  It is literally a cacophony of noise which, when converted to a service, the service process map looks like a Rorschach image.  It is then “launched” for the bugs to be worked out as the service is being delivered.  The rework is expensive, taxes the company’s employees, and rarely produces a happy customer.

To help them, we built a Voice of the Customer (VOC) Maturity Model with laddered capabilities for them to climb. That model was built on some basic premises and observations after working with service companies for many, many engagements over the course of my entire career.  Let me lay these out to you so you understand our final recommendation to any service company struggling with the same problem.

Download VOC Maturity Model

 a short Powerpoint presentation that describes a 5-stage Voice of the Customer (VOC) Maturity Model

First, there are two aspects to VOC – getting it and using it. They are very different.  And there are two basic ways to Get VOC: 1) directly from the customer,  and 2) indirectly from all your company’s customer facing team members.

Our experience has been that companies are better at using what information they have than in getting good information. Further, that what they do to get the information often relies on customer facing team members as surrogates for the customer.    One thing is for sure, while only a small fraction of companies that use it well get it well, almost none of them that manage the information get good information. Why?

I think this is true because after crashing a few launches, companies suffer enough pain to cause them to start gathering information.  Then as they develop the disciplines in using it, they discover it isn’t very good and they need better information.  So until they try to use it, they don’t start improving the quality of the information gathered.  Just as an aside, along with discovering they aren’t getting good information, they often discover they aren’t getting the right information as the system focuses on product specifications rather than customer requirements. So the learning curve goes from we need information to …. we need good information to …. we need the right information.

As a company goes through this discovery process, they have to overcome some assumptions that are being taken as truths, and are really holding them back from progressing.  Why does this happen?

  1. The assumption that customers don’t really know what they need.
  2. Information is gathered once at the beginning by simply asking customers what they want.
  3. They only gather information from surrogates.
  4. They only gathering information from their best relationships (often happy customers).

These are the traps that get you stuck in bad information and more rework. To overcome these traps, information must be gathered both directly and indirectly. The information gathered must be prospective and from a broad population.  And gathering and incorporating information must be continuous, NOT a one-time event.

Needless to say, the process isn’t easy and requires a significant effort.  But the payoff is a multiple of the effort.  There is no doubt that companies that have structured processes for gathering and converting customer information outperform companies that don’t, regardless of whether they do it well or not.  Working with a plan, even if not perfect, outperforms no plan.  And needless to say, if your plan and execution are done well, then your company performs even better.

Take a look at the summary presentation of what we recommended.  If you have any experiences, comments or questions you’d like to share, let me know at jlopezona@ssqi.com.  And by the way, while this is all written based upon an experience with a B2B service organization, it is equally applicable to internal processes such as a Shared Services organization providing a service to operating units.

Reshoring – An Opportunity to Redesign Processes to Lower Total Cost of Ownership

March 7th, 2012 1 comment

Reshoring - Process Redesign to Lower TCOThe drive to reshore goods, and services, for the US market builds every day.  Growth in emerging markets is driving up local wages.  The decline in the value of the dollar has increased the cost to produce abroad for import back to the US.  The need to provide faster AND better delivery makes for a increasingly powerful competitive advantage.  The ability to manage shorter supply chains increases quality.  These and other factors are driving more ompanies to look at reshoring opportunities.

A critical element in a reshoring decision is a Total Cost of Ownership analysis.  Made popular by the Gartner Group when attempting to capture all the costs of software and IT systems over the product’s life, it is an excellent concept to apply to reshoring as it goes beyond a simple vendor price or internal transfer price by looking at overall system costs.  At a personal level, think how we apply it when comparing cars for purchase. We incorporate costs to maintain, operate, insure, finance and, eventually, what we get back when we dispose of the car.  Total cost of ownership …. not just purchase price.

Reshoring to Lower TCOReshoring provides a unique opportunity to lower the Total Cost of Ownership as the existing supply chain and internal production processes can be designed with a blank slate.  The iterative redesign that first occurred when it was offshored and then occurs again when reshoring can leverage past experience, and work with a blank slate.

For example, we have a client which offshored a production line to capitalize on lower direct labor costs.  After a severe fire in the offshore facility, they decided to bring the line home.  They performed a Design for Lean analysis on the entire process and lowered the cost to a level significantly less than the pre-fire offshore line.

Download Lean Overview  this executive brief for a short, practical overview of Lean

Another client brought back its customer service operations.  Again, through a redesign process and armed with clear Voice-of-the-Customer (VOC) about their offshore facility, they were also able to lower its costs and increase customer satisfaction, thus significantly lowering their Total Cost to Service.

Redesigning a production line or a service delivery process are great opportunities to really pour through VOC and design the value streams and supporting processes with a clean slate.  Clear VOC, strong design capability and application of lean skills can collectively be used to take advantage of declining costs in the U.S. and better meet customers’ needs thus lowering the Total Cost of Ownership.

If you would like to discuss these topics, feel free to contact me.

Service Design vs. Product Design – 5 Key Differences

December 19th, 2011 1 comment

Designing a product and designing services have many similarities but also key differences.  Both need clean VOC, clear definition of CTQs, stakeholder input and intelligent tollgates.  But the differences in the design process for the two are far greater.  And those differences are defined by the nature of products versus the nature of services.  So here are the top ten differences in their nature.

Service Design vs. Product Design - DifferencesHow do these attributes change the design process?  Well imagine how difficult it is to know if you have the right design if you can’t easily measure different attempts since repeatability and storability are issues.  And you really aren’t sure what you can measure since quality is defined by the customer’s experience of an outcome more than measuring the attributes of output.  And imagine what happens to multi-generational planning when you have to factor in how difficult it is to maintain your moat of defensibility for a new service without the right of a patent. Time and again basic elements of a design process are scraped or reinvented in an attempt to build a proxy for what is normally taught and practiced as good design principles.

In the end, you essentially have to nearly start over n building your design process for a service.  Basics are retained but new elements must be introduced or emphasized.  In a recent blog post, I point out how the basic principle of tollgates must be retained but mapping becomes the foundation to test, validate and repeat due to the absence of data.

Download service blueprinting

a short presentation on Service Blueprinting now ……..

At Qualtec, we’ve built a new design process or roadmap and established a set of tools to support each step of the way.  We will continue to write about this subject as we find there is a real dearth of information available.  But we also welcome your input and so if you’d like to discuss the differences and how to adapt to them, we invite you to contact us.

Service Design – Service Blueprinting and Tollgates add Much-needed Structure ….

December 7th, 2011 Comments off

Service Design | Services BlueprintingIn our design course we present an argument that over 70% of a product’s total cost is captured within its design process.  Based on that assumption, we go on to argue the most impactful activity a company can make to lower the cost of new products is to improve its design process. While we don’t cite similar statistics for a service, we believe the basic principals are the same.

Within Service Design, we believe there are two activities that we have observed service companies don’t aggressively pursue and which, if improved, could dramatically improve its cycle times, costs and perceived customer service quality.  Specifically, intensive mapping and tollgating are two basic design process and design principles that service companies would be well served to improve.

Tollgates should serve as business reviews and not technical reviews.  Tollgate business reviews should include cross-functional teams that are named based upon the business risk of the project.  Some new service offerings should include the CEO and others shouldn’t require such attention.  Tollgate reviews should include discussions about project risk, customer requirements, financial objectives and schedule/timeline.

Certainly, when constructing customer requirements for the service, there should be some form of VOC, such as a quantitative or qualitative survey, and conversion to CTQs using some form of decision matrix or tool such as a QFD.  But customer input shouldn’t stop after setting initial customer requirements.

Customers should be part of the tollgate process.  They should be treated as a stakeholder just like everyone that is part of the cross-functional team.  Of course, design incorporates a lot of proprietary information that is part of an entity’s business model and which a company certainly doesn’t want to disclose to its customers as it risks the very essence of their value proposition.  This is especially true for B2B service companies.

Download service design - Tollgate Process a short .ppt dealing with tollgate reviews in the service design process …

The key to incorporating the customer in the tollgate process and still maintaining a protective shield on your value proposition is to know when and on what to include the client.  A valuable tool to identify those points is a service blueprint that details all the “on stage” points of customer interaction.  These are the customer input points.  It is here that they form their perception of service quality.

Service companies still have very ad hoc service design processes.  Process mapping and tollgate reviews are two simple tools that can put some initial structure into service design.  Service Blueprinting, a form of process mapping, is a great tool to understand how to extend tollgate reviews to include customer feedback during design.  The stronger the design process, the shorter the lead times, lower the costs and higher the perceived customer experience.  If you would like to discuss any of these concepts or how to implement them, contact me.

Service Innovation and Design – Help me help you …

November 30th, 2011 Comments off

Service Innovation - Help me help youRecognizing co-production as the core concept of service innovation leads service providers to rich deposits of waste, the extraction of which adds tremendous value to a customer relationship.  And, failing to recognize the interdependence leads to suboptimal solutions.

When providing a service, whether B2B or B2C, we too often view the flow of activity as simply going one way.  In actuality, there is a constant flow of information and activity in both directions as you and your customer move along the continuum of operations that deliver the ultimate job.  This is especially true in B2B businesses that have another end consumer to a co-produced good or service.

Too often we give the notion of this relationship a friendly nod but fail to incorporate it into our work.  We fail to respect this interdependence because we all look for control in our work.  The introduction of the notion of reliance on the interrelationship with our customer brings a highly uncontrollable input.  We have a difficult time telling the person to whom or entity to which we are attempting to satisfy a need that we need something from them.

Download service innovation

a short .ppt dealing with tollgate reviews in the service design process …

Service Innovation - Customer RequirementsBut as iconic movie star Tom Cruise, while playing sports agent Jerry McGuire, says to Cuba Gooding Jr.’s Rod Tidwell, playing his client, “Help Me Help You”.  It was when Jerry McGuire recognized the interdependence between his actions and his clients that success accrued to both of them.  Your clients’ actions as your partner may be uncontrollable but they remain undeniable.  And when they are recognized, great opportunities open to provide more value and earn more profit by capturing a portion of it themselves.

The first step in recognizing this co-production is to give it visibility.  The best way to do this is with various mapping activities.  You can value stream map the overall process, including both the service provider and clients’ activities.  This can be pursued further with customer mapping.  Another alternative is to perform service blueprinting, which specifically focuses on a service provider’s interactions with its customers.

For a further discussion on how to identify the interrelationships between you and your customer’s co-production so as to add value to your customer and capture value for your company, please contact me.

Service Innovation Points of Differentiation

November 15th, 2011 1 comment

Service Innovation for DifferentiationA service provider seeking to grow by innovating new services must have a competitive advantage versus existing service providers, whether internal or external, when positioning new services. In services, with its low barriers to entry, it’s not good enough to simply say I’m the largest. And when perceived quality is the final measure it is also not good enough to say I’m the cheapest. A service provider must be able to provide a good value for the best work. And to meet that sort of test, it must design processes to do jobs and achieve outcomes better than whoever is doing them today.

Service and/or process design is a core capability that can be built. With stronger process design, companies can offer better deliverables at a lower price. If gaining scale is one of the service designers goals, process design can produce more scalable services since an element of scalability is consistency which can be enhanced with better process design. Process design is also an easier core capability to develop than many others because it can be contained in a small group of people that are leveraged across an entire organization. It is the service business equivalent of an R&D function whose output is leveraged by manufacturing, sales, marketing and distribution.

It is also the building of such a capability that can be promoted to change a company’s brand image. Many equipment manufacturers provide services in conjunction with equipment sales. However, they are still viewed by their clients, employees and, most importantly, customers as equipment makers. If the vision is to move from being an equipment maker, with all its inherent cycles, to a service provider that has greater stability and growth, expertise is designing and executing services is a key roadmap.

Download service innovation a short .ppt on service innovation ….

In a previous post, I wrote how service innovation is different from service excellence. The latter requires knowledge of your processes while the former requires you to know your client’s and/or competitor’s processes. I also wrote how even though you must have service excellence to establish the credibility to be given the opportunity to provide new services, expertise in delivery isn’t a guarantee to be able to define and design solutions that ensure better outcomes. This article adds that one of the two basis on which you can differentiate yourself as a service provider is to design better solutions.

If you’d like to speak more about this, feel free to contact me.

Service Innovation and Service Delivery – Together but Apart ….

November 11th, 2011 1 comment

Service innovation and Service Delivery ExcellenceService organizations must grow by offering new solutions to customer needs.  The trust needed for a consumer of services to buy a new offering is obviously highly dependent on their perception of the service quality they are experiencing on current services.  If the customer has issues with service delivery on existing services, it is no surprise there will be a lack of confidence in buying new services.  However, service delivery excellence, while critical to successfully expanding new services, is a different capability from service innovation.

Successful service innovation depends on (i) defining unmet VOC for which the customer has not contracted as they currently are doing it themselves or have other vendors doing it and (ii) the ability to design better processes as measured by the customer than the customer or an existing third party provider can design.  Service delivery is about executing against customer expectations on existing contracts and internal processes.    Improving service delivery is about understanding the service provider’s processes.  Succeeding with new services about understanding the customer’s or a third parties processes.

Download service innovation a short overview of our service innovation approach ….

Never assume excellent service delivery ensures the ability to define, design and deliver new services.  In the end, the muscle tissue a service organization builds by improving service delivery will improve perception for new services but not necessarily the ability to define, design and deliver new services or to innovate. Service innovation must be addressed separately from Service delivery.  The upside of building service innovation ability is that if the service provider succeeds it will be able to extend beyond providing existing services.

If you’d like to speak more about this, feel free to contact me.

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.

Join Us on Twitter for Thoughts and Announcements

September 2nd, 2010 Comments off

First, we want to thank all of you that have subscribed to our blog. We have over 1,000 subscribers and the list grows every day, week and month. We hope we are providing you relevant information. If there is anything you’d like us to bring to you, let us know. If we don’t have the content, we’ll recruit guest bloggers that do.
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On another note, we began “tweeting” about a month ago and just were rated in the top half of Twitter profiles by Hubspots ranking tool. We have grown a nice group of friends who we follow and that follow us by regularly tweeting on key subjects as well as making announcments about our complimentary content offerings. We invite you to join us on twitter at @sixsigmaqualtec.

Thanks for your support and have a great Labor Day weekend. See you on the other side.

Innovation Careers

July 4th, 2010 Comments off

The only think constant in life is change.  As unsolved project inventories grow due to the limitations of known skills, companies CI programs face the challenge of looking differently at problems.  The natural path is to look at Innovation tools.  I’d like to share an article from Harvard Business Review regarding Innovation (http://hbr.org/2009/12/create-three-distinct-career-paths-for-innovators/ar/1).  Innovation is a very broad topic but one that is certainly touching on CI professionals.  The article’s basic principle is that Innovation career paths can be structured with different skills and experiences.  The introduction of innovation skills in a CI professional’s career can be similarly structured.  This is different from what is offered in the market today.  Today you have Introduction courses, basically an awareness session, and deep dives for those seeking a sophisticated level of expertise.  If you are increasing your efforts around Innovation, you may encounter the challenge of creating a set of applicable tools according to the problems an individual encounters.   I found the article thought provoking and thought I’d share it.