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Posts Tagged ‘Voice of the Customer (VOC)’

Business Process and Performance Improvement – Strategic Initiatives to Tactical Actions?

March 8th, 2013 Comments off
For many companies, CI has has moved from a top-down strategic initiative to tactical activities focused on specific business problems

For many companies, CI has has moved from a top-down strategic initiative to tactical activities focused on specific business problems

I’ve written several articles that talked about how views on business process and performance improvement have changed over the last 3 years.   In the personal development world, there is a mantra that basically says that meaningful change comes only when the pain of not changing becomes greater than the pain associated with change. 

The economic downturn definitely created the pain that caused a lot of companies to change the way they look at their business, and at process and continuous improvement.  I see very few companies saying they want to launch a top-down, enterprise wide Six Sigma (or Lean or BPM) initiative, especially ones that focuses on investing big $’s on training and infrastructure up front.   Those days, for the most part, seem to be over and gone.  Certainly a big change from years past, but is it a bad thing?

Some purists might argue that it is a bad thing, that top-down, large scale change management and process improvement initiatives should be a fundamental part of any enterprise.  Theoretically, yes, but how many large-scale Six Sigma (or Lean or BPM) initiatives basically collapsed under their own weight in years past, after a great deal of money, time, and intellectual capital was spent?   A great many, I can assure you.  Why?   Well, I might argue that it’s because they took on a front-and-center life of their own, as initiatives, growing unbounded for the sake of the initiative when their place should have been in supporting the core value-generating processes of the business.

Download our short guide to project selection and definitiona short guide to project selection and definition.

I would argue that the change is not a bad thing, and was necessary to survive in this new normal.  Let’s think about where are we now?   Companies are lean and mean, operating in very much of a do-more-with-less mindset.  For many, big Six Sigma (or Lean or BPM) organizations have been disbanded.  Productivity is at record levels.  60 hour + work weeks are the norm for many.  But, you can only ask so much of your people for so long.   Sooner or later the business processes have to be looked at, right?

But, now, what I see is that many organizations are taking a very pragmatic and tactical approach to CI.  The competitive environment, the regulatory environment, or maybe even a very important customer is telling them EXACTLY where process problems are, and they are listening.  They then focus like a laser beam by identifying and rigorously defining good projects (see a recent article I wrote on the elements of good project definition) that solve real, specific business problems.  They then develop the process improvement skills in-house or work with a specialist partner to execute what are, by definition, high-impact improvement projects. No guesswork, no unnecessary overhead, no unnecessary infrastructure.

In essence, what I see is a fundamental shift from CI initiatives that are pushed into the enterprise to an environment where CI and process improvement are pulled in, as specifically needed by the business.  Of course, the pendulum has swung very far from the strategic to the tactical and the optimum is probably somewhere in the middle.  But, was this change a bad thing?   I think not.  I think it will serve to refocus CI on what really matters …. making the business more competitive and profitable in an ever-changing marketplace.

Feel free to contact me directly.  I’d like to hear your thoughts ….

Voice of the Customer; Getting to the Endzone

December 14th, 2012 Comments off

VOC – Getting to the Endzone

What is the fastest and surest way to success when designing a product or service?  Quite simply – Give customers what they want.  But easier said than done, right?  Which customers?  What do they want?  Which of their needs matter?  How do we answer those questions?

Let’s start by defining some basic terms.  First, user needs are characteristics or qualities that if present in a product or service result in user satisfaction. They close the gap you would have identified when you decided to produce a product or provide a service.  They are things the user wants the product or service to have in order to be satisfied.  But not all users are created equally nor will they value every need the same way.  So how do we capture their needs and stratify their relevance?

Well, while it’s not the topic for this post, to maintain a credible argument we start with segmentation.  For the greatest success, you search for the needs that are most important to the biggest segment that is growing the fastest.

Now every segment has four different types of user needs as best laid out by Kano.  The four categories depend on the way a user responds based upon either the presence or absence of the user need in the product or service.  The needs can be separated into those about which (i) the customer doesn’t care, (ii) the ones about which they care linearly, (iii) those that are must haves but for which you don’t get a lot of notice until missing and finally (iv) the latent needs whose absence isn’t noticed but whose presence delights.

It is these latent needs within the biggest and fastest growing segments for which we search primarily through observation and capturing verbal expressions.  Observation can be powerful and some argue the best method because verbal expression isn’t always understood or completely revealing.  Nonetheless, we inevitably want to speak to customers in some manner.

Download

Download “Voice of the Customer Deployment & Maturity Model” PowerPoint Presentation

So now I get to a very interesting and possibly controversial point.  I recently read a paper by Abbie Griffin and John Hauser of the University of Chicago entitled Voice of the Customer which, if I understood correctly, postulates that between focus groups and one-on-one interviews, the interviews are considerably more effective.  With a small number of interviews, you’d collect nearly the same number of customer needs than with focus groups for the same amount of man hours.   And that by the time you conducted ten individual interviews, you’d collected 90% of the customer needs you’d collect in twice as many hours devoted to focus groups.  So Griffin and Hauser conclude that on a cost and time basis, one-on-one interviews is the way to go versus focus groups to find those latent needs.

So the path to success requires three capabilities.  First, know how to segment to find the sweet spot. Second, understand the nature of needs to find the ones that illicit the strongest positive reactions.  And finally, know the best method to listen to your customers.  Still easier said than done but at least it’s a plan.  If you’d like to discuss, 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.

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.

Voice of the Customer (VOC) – Can You Hear Me Now?

August 5th, 2011 Comments off

Voice of the Customer (VOC)Verizon Wireless “Can you hear me now?” commercials hit home because in our increasingly mobile connected lives we live that moment so many times. Verizon’s implicit message is that not only will you be heard on their network but that they hear you. We all want to be heard and we are frustrated when ignored.

We live that moment when we question whether we are being heard in many other ways including as consumers and business customers. How often do we feel as if we are asking the people from whom we buy goods and services both personally and professionally “Can you hear me now?” How often do we feel as if we are ignored, misunderstood or altogether treated like a dropped call! What do we do when we feel that way? I know what I do. I move to another network. I move to one that will listen to me.

Let’s now reverse the question. As a product or service provider, ow well do we listen? Are we so busy with what we wish to accomplish that we are forget our goal in business, which is to meet client or customer requirements. I recently heard an individual involved in a performance improvement program discussing the need for Voice of the Customer, VOC, as he explained his management scorecard and projects. When asked if he’d reviewed either with a major customer, he replied that they’d given him a scorecard but he’d neither used it or presented his because his system was still immature. I took a double-take. He’d been handed the VOC he sought but failed to realize it as such as he was focused on his ability to execute. Tell me

– would a hunter increase the amount of venison he had for the winter if he could shoot straight but couldn’t find his quarry? I think he’d have a cold, hungry winter. Good VOC helps your business see the target.

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

If you want to judge the ability to execute, we have lots of qualitative observations and quantitative measures with which to make an assessment. Do you have the same so as to assess your ability to listen? Do you know whether or not you are really listening to the voice of the customer? We feel that just as there is a maturity model for the ability to execute improvement, there is a maturity model for the ability to listen. If you’d like to hear more and discuss how you listen to your customer, please contact me. We always like to listen to you.

 

VOC and Lean Value Stream Mapping – A Simple, but Powerful Equation

March 2nd, 2011 Comments off

It sounds so simple. Lean eliminates waste defined as any activity that does not provide value to the customer. Eliminate the waste and you will bring products and services to customers better, faster and at a lower price. Finally, combine it with Six Sigma to reduce variation and defects, and you make breakthrough results.

We all start by understanding that value is defined solely by what the customer actually desires and for which they are willing to pay and that value enabling activities, while not adding direct value, are necessary. We all then look for the true non-value added activities that add waste in the form of unnecessary time, effort or cost. We learn to seek and eliminate those non-value added activities. That is the essence of a lean project.

So what is the lynchpin that makes this elegant equation work? Identify what your customer considers of value and how you deliver it. Once you have that line of site, if you maintain efforts to continually improve, you’ll get there. But without that clarity, your improvement efforts are a march to nowhere.

It is important when developing that line of sight to define value from the perspective of the customer, the Voice of the Customer (VOC). Understand clearly and exactly what product or service the customer desires, when it is to be

delivered, and at what price.

Download a VOC training module dealing with Critical to Customer Requirements, a key element of VOC

Download a training module dealing with Critical to Customer Requirements, a key element of VOC

To understand how your company actually delivers what the customer considers of value, leverage lean tools to precisely map the set and sequence of all specific actions done to bring the product or service from conception to final delivery. This provides a visual display of exactly how a particular process is carried out. Mapping this “value stream” enables you to identify value-adding and non-value adding activities from the customer’s perspective thus setting the stage for improvement.

Along with providing a sense of alignment between your goal of delivering value and your opportunity for improvement, this exercise also carries the message of how problems and solutions are cross-functional in nature. If process owners participate in this process with an open mind, they will learn the futility of looking for a solution from someone else independent of their efforts. Thus, not only does value stream mapping provide alignment from the customer to performance improvement opportunities, but it continues through to an individual’s actions.

Yes it can be a simple equation – understand what your customer values (VOC), eliminate waste (Lean) and be more competitive. But to do that, make sure you get the front end right using VOC and value stream mapping to get the target and alignment to individual actions.

Feel free to contact me if you’d like to discuss ….

Process and Change in Service Industries – The Survivor Challenge

February 1st, 2011 Comments off

Outwit…Outplay…Outlast.  Wow, that says it all doesn’t it?  Reality TV is a kick. Throw a bunch of strangers onto an island and watch them dwindle down based on how well they can play to the desires of a group in a winner-take-all battle. Lots to learn from watching. How well and quickly can a player understand the group’s requirements? How well can they meet those requirements in a highly competitive situation? Each elimination changes the group’s dymanics so the requirements, competition and strategy all have to be adapted continuously and quickly. One slip up and you could be out. How does this relate to Service Industries?

Download our critical to customer requirements module

our critical to customer requirements VOC module

In previous articles, I’ve discussed how business and consumer patterns have gone through massive changes and how understanding the Voice of the Customer is the key to adapting to the new environment. The nascent recovery is providing an opportunity to survive and, for some businesses, to flourish. But the competition is still in the elimination phase and I believe that is very much the case for service businesses of nearly every nature.

It’s important to understand why things are different in services so as not to be lulled by more macroeconomic headlines. Before the crises, manufacturing went through years of driving productivity while services accelerated right up to the edge. The Federal Reserve’s strategy of depreciating the dollar and growing demand in emerging markets has helped the global competitive position and demand for manufacturing products while services are more tied to the domestic economy. Finally, we have a political environment that ramped regulation or restructured entire service industries such as banking and health care. And if that weren’t enough, services are going to be the start-ups of all the unemployed as they require less capital and can use the internet to gather and distribute information, the very essence of a services business, at a very low cost.

Change is not over in service businesses. Like Survivor, listening and adapting quickly to an ever changing customer is still the only protection from elimination. Several key points we consider imperative to driving alignment are:

  1. However you capture VOC, keep improving it. We propose a five level maturity model that goes from what you need to simply stay alive to what you need to be innovative.
  2. Balance how you respond to VOC with how you respond to other stakeholder demands. We have a checklist of behaviors that will give you the ammunition to point to an imbalance.
  3. Segment your VOC. Meeting every item your customer sets out for you will not yield a purchase while some will yield tremendous results. We offer a framework for segmentation.
  4. Convert what you hear to something you can measure. To make science out of art we use industry case studies and benchmarking as the best guide.
  5. Align process metrics to the chosen customer measures in #4 above. Again, use industry benchmarking and cases to apply knowledge and experience and avoid the alchemy.

Now you are ready to drive change. But there is one more thing. Let’s return to the scenario painted at the start of this article…it’s not enough to just do this. You must do it fast. We are rebounding but demand for services isn’t returning to 2006 levels…at least not until around 2016…and competition is increasing. During that time, businesses will fail, be acquired or be rationalized. But there will also be winners and, like Survivor, they will win big. We urge you to recognize what is coming and act.  Outwit…Outplay…Outlast.

If any of the pieces above would help you, let me know our thoughts.