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Cases, Service

Do You Have a Clear Line-of-Sight?

Whenever I entered the management team meeting at MyBank, I had my state-of-the-art PowerPoint pitch showing the performance of each department and its core processes as part of our dashboard. Every month, we got the latest underlying data together, aggregated them and displayed an overall dashboard of how the business was doing. With that, we had a clear Line-of-Sight.

For this particular month, my dashboard highlighted only one indicator pointing south, i.e. showing a significant decrease in performance. The traffic red highlighted “Client Management” (Figure 1). Client Management is the business unit that handles our relationship with dealers and retailers in the different industries. They issue our loans for Sales Financing.

Dashboard gives a clear line-of-sight

Figure 1: Balanced Score Card of MyBank

 

Gerald, Director Sales Finance was able to shed some light on the significant drop in performance. Drilling down step by step from Client Management via Sales Finance and Used Car Financing he concluded that the indicator for Dormant Car Dealers went up (Figure 2). This meant that the percentage of Car Dealers who are on contract but do not generate loan requests for more than three months, went into a red zone. The initial root cause analysis failed to reveal any obvious reasons for the change. Though, he and his team decided to start a multi-disciplinary project on the underlying process in order to get the Car Loan business back on track.

 

Dashboard - Driver Tree for Client Management

Figure 2: Driver Tree for Client Management

Getting a Balanced Perspective with a Line-of-Sight

Having a clear understanding of the health status of the organisation is an important leadership task. It involves managers at all levels. The health of the organisation, as many companies knew even before Kaplan and Norton emphasised, is not only apparent in its financials. Following Kaplan and Norton’s Balanced Scorecard, it is visible in a Customer Perspective, an Operations Perspective, a Learning and Growth Perspective and – of course in the Financial Perspective. Whereas the Financial Perspective involves merely lagging indicators, i.e. indicators like revenue, costs and margin that show the result after product or service have met the customer, the Customer Perspective leaves some room for reacting on customer feedback before the financials turn red.

However, the objective should be to identify the drivers for customer satisfaction and consequentially for financial results. These drivers are usually visible in process performance and in the organisation’s capability to learn and evolve fast, long before customer satisfaction or even financials show signs for concern. Therefore, a dashboard is necessary to display timely data of all relevant drivers for the business in a regular manner enabling the managers at different levels to control and improve if necessary.

Everything in a company happens in processes. Hence, process measures are the key indicators that help steering any organisation to success. Process measures help to establish a line-of-sight for the management.

Why Dashboards?

Whether your organisation has a Balanced Scorecard or not is secondary. The vital question is: Is there a set of business relevant measures or a dashboard, which management can use to control the business? Does management have a clear line-of-sight?

We often say, “What gets measured gets done.” This is not entirely true. Look around in your organisation and see how much data your staff collects. How much of it do you analyse and how much do you really use to derive actions? And, even if there are actions, how many of the interventions are really appropriate, i.e. statistically reinforced?

Dashboards serve purposes such as

  • Raising awareness for some key indicators among managers and employees. This alone leads to some initial improvements – due to the Hawthorne Effect,
  • Building a cause-and-effect mind-set, especially in the process of constructing the driver tree. This driver tree shows leading indicators that drive lagging indicators and serves to give a clear line-of-sight to the process owners. They will be able to see – and often quantify – the impact of their performance on customers and financials,
  • Creating appreciation for simple statistical principles like control charts. They are used to identify the appropriate action in case the dashboard shows signals.

How to Develop Dashboards?

Building dashboards is not a one-off exercise but a recurring task that mirrors changes in the organisation as well as learnings out of the dashboard itself. It usually takes the following steps:

Preparing the Dashboard

  1. Collecting existing indicators that make the initial driver tree. Some organisations are data rich, some are not. Building an inventory of the existing data is necessary – and often full of surprises. Not many businesses use this data in a driver tree with established cause-and-effect relationship. More often than not, the selection of KPIs is based on gut feel fed by a good portion of business knowledge. Almost always, it is necessary to amend the set of indicators after inventorying and evaluating them.
  2. Designing the dashboard for different levels is a rather creative activity. It involves decisions about which indicators to bring to whose awareness, how to show these indicators and how to set thresholds. Rule of thumb: not more than 10 to 12 indicators in one dashboard.
  3. Setting up the data collection system is a vital task. The quality of the data in the system determines the quality of information obtained and decisions made. Therefore, the data collection system should ensure that the right amount of relevant and representative data is available. Evaluating repeatability and reproducibility of the data collection system might be necessary.

Using the Dashboard

  1. Making the dashboard operational is about change and needs proper change management. It usually takes time, training, motivation and a great deal of role modelling by the leadership team to establish dashboards and the right mentality in using them. Start with the obvious indicators that are neither doubtful nor difficult.
  2. Revising the metrics is an ongoing task that should be part of the annual or bi-annual planning process. It needs time and some trial-and-error to establish effective dashboards showing numbers that really correlate with customer satisfaction and business success.

Conclusion

Building dashboards is a project itself. Their ongoing review and adjustment is as important as changing strategy or processes. Reading business indicators is a management task that requires preparation, focus and the willingness to embrace cultural change. Using dashboards combined with effective data analytics, process management and appropriate process improvement interventions are powerful in steering the business and in ensuring the organisation’s continuous learning and renewal. An effective dashboard with appropriate indicators gives the management a clear line-of-sight to the business objectives.

The project at MyBank did not take too much time. It revealed some obvious drawbacks in our processes. Firstly, our new conditions, i.e. better interest rates have not been communicated to all dealers. Hence, they used other banks for financing sales. The root cause was found to be a mismatch of our car dealer database with the marketing database. Marketing was working with “old” data. Secondly, our sales reps tended to call car dealers whom they are comfortable with.

This means they mostly called car dealers who were active anyway. For both process problems, corrective actions were introduced and monitored. As a result, Gerald’s dashboard has been amended to show the car dealers who have not been contacted for a certain period. This was a leading indicator that was very helpful in keeping current with the status of our communication with our car dealers – long before the relationship could turn sour.

 

Uwe H Kaufmann: Managing with Dashboards. Rath & Strong’s Six Sigma Leadership Handbook, John Wiley & Sons, 2003

Cases, Competency, OD, Service, Staff Development

Why Competency Framework? Isn’t SOP Enough?

“Why do we need a Competency Profiling?  We have SOPs. That should be enough” was one of the statements I heard from a colleague. Here is some rational explaining why there is usually an added value in having competencies defined in addition to Standard Operating Procedures (SOP).

When SOP is in Place

Spending some days in Nanjing, the former capital of China, is enjoyable. People are nice, work is fun, food is outstanding and my hotel is awesome. Nowadays, the service in most hotels in China is world class.

Competency Profiling

Competency Profiling starts with Understanding the Job

Monday morning I make my way to the restaurant, expecting my usual sumptuous breakfast. I am greeted with a smile and with the usual dialogue:

“Good morning, sir. Your room number, please” requests the waitress with a sweet smile. I answer 1326.

“Smoker or non-smoker?” I opt for the first one.

“Tea or Coffee?” I answer this one as well and start toasting my bread.

On Tuesday morning, it is nice to meet the same waitress with the same sweet smile.

“Good morning, sir. Your room number, please” she wants to know again. I did not expect her to remember, of course.

“Smoker or non-smoker?” I answer as well.

“Tea or Coffee?” I answer this one, irritated.

Wednesday morning the same waitress, the same questions.

On Thursday and Friday exactly the same procedure.

I am very sure it was always the same girl. And, I am very sure I was always myself staying in the same room, being violent non-smoker who always likes coffee with milk in the morning. And I would bet she must have recognised me from Tuesday onwards. I just assume she was following her procedure and was not willing to think one step beyond.

She knew her procedure. No doubt. Even with a smile. However, I gave her a not so pleasant rating when I checked out. She was the wrong person for the job.

After Competency Profiling – SOP and Competency Framework Come Together

A friend mentioned the following story to me.

She arrived in her hotel in Myanmar on Sunday in order to work the following week. The hotel was ok. It was clean and nice but not really comparable to hotels she was used to. She went for breakfast on Monday morning and was greeted by the waiter. The waiter asked the usual questions that seemed to come from the worldwide handbook for hotel waiters. This waiter, dressed in a not perfectly clean suit, was not too busy so that he started a small talk with my friend.

“How did you sleep”, was one of his questions – in starter English. And my friend hesitated but replied truthfully that her night was not that good. Just by the way, she mentioned that her pillow was too hard.

When she returned from her client meeting, she was truly surprised. On her bed she found two additional pillows with different height and filling. Exactly what she needed. I am sure this little deed resulted in a nice tip for the waiter upon check-out.

Competency Profiling - Competency Framework and SOP Working Together

Competency Framework and SOP Working Together

We do not know what the SOP (Standard Operating Procedure) for the waiter in this hotel says – if they have an SOP. I do not believe it instructs him to do what he did for my friend. If he got an SOP it was surely for waiters, not for chamber maids.

Conclusion

SOPs describe how a task has to be performed – often step by step. Competencies describe knowledge and skills needed to perform this task. Additionally, they formulate requirements towards attitudes to apply knowledge and skills. Competencies describe WHAT it takes to complete a job successfully with the “HOW” to do it. This HOW is of less importance when the job is about repairing a car, for example. However, it is of paramount significance if the performance has to be shown in the service line of business.

SOPs and competencies combined can help delivering the best results. Job competencies often take over the instructional task of SOPs in case SOPs are lacking substance or don’t exist at all. If it serves the purpose, why not? Investing in Competency Profiling may add value to performance management as well.

Performance is achieved through application of knowledge and skills with the right attitude. The waitress in Nanjing did her job, but was lacking exactly this attitude whereas the waiter in this second class hotel in Yangon did. He displayed competencies we could summarise with Customer Orientation, Collaboration and Teamwork as well as Alignment with Organisational Values.

He sincerely listened to customer needs and translated them into actions. This attitude is completely unlike the usual “How are you?” for which no one really wants an answer. Furthermore, he showed a great degree of Collaboration and Teamwork by helping his colleagues to satisfy the needs of their customers – beyond his own scope of work. And, he exhibited his organisational values, probably without even knowing.

His mind-set made the difference between poor rating and commendation by customers.

Customers, Innovation, Service

Everyday Innovation

“iPhone, Google, Samsung Mobile Phones and other products” are usually mentioned when it comes to innovation. It seems that innovation is strongly connected to new products everyone can see and even experience. The talk about Process Innovation is rather limited or left to the “process specialists”.

Doblin[1] has shown that the Return On Investment (ROI) of product innovations is by far lower than what you get when you rethink the way you make, sell and deliver your product or service. The HOW is much more important than the WHAT.

Some years ago when we established our business in Singapore, the registration of our company was easy.  We just needed to register our company with the government agency through a very simple and hassle-free online application. However, setting up a bank account for the company was not that simple. Doing it online was not possible. We made some calls to the major foreign banks like HSBC and Standard Chartered and we realised then that they were not ready to support SMEs. Then, we heard about OCBC and their new offerings for SMEs. We gave OCBC a try.

On the phone, Yu Jin, one of their bankers, explained the advantages of their new SME business account model. Everything looked very promising until he asked: “When can you come to our office to open the bank account?”

Everyday Innovation starts with you.

Everyday Innovation starts with you

“Today is not possible since we are with clients all day.”

“What about tomorrow?”

“No way. We are with a ministry from eight to six. After that I fly out to clients in China to spend a week with them”, I answered somewhat frustrated. I could not see an obvious way to solve our problem of opening our company bank account. And – much more important – to get our business finally up and running.

Still on the phone, Yu Jin thought for a while and asked

“What do you do tonight?” And, before I could get irritated he completed his thought: “Can I come to your place to finalise this application with you?”

At eight in the evening, he arrived at my house, explained all the formalities to me and my partner, we signed the papers and … voila. Problem solved.

On the one hand, I am very sure that at that time OCBC’s Standard Operating Procedures (SOP) did not explicitly tell their bankers to go the extra mile, to do something outstanding to help their clients with a creative solution. On the other hand, their culture must have been built in a way that people felt encouraged and empowered to do so.

The “WHAT”, which is the bank account, may be offered by other banks in a similar way for a similar price. The “HOW” makes the difference. Until today, we really appreciate the open mind-set Yu Jun was showing. He did not express the typical “Can Not” attitude. Instead, he delivered the service in a very  unexpected way, an innovative way.  He did something many people would not be keen to explore since it was beyond what the company said he could or should do.

This is what I call “Everyday Innovation”.

Conclusion

Waiting for the next “great innovative product idea” may never get you one step closer to a  higher level of customer satisfaction, more revenue and consistent business growth. Instilling an innovative mind-set facilitated by some simple creativity tools that are supported by empowerment does. Process Innovation creates much more value to the business than one realises. It can be done by nearly everyone in your organisation at any time because processes run every day. Everyday Innovation will change your organisation.

 


[1] Larry Keeley, Ryan Pikkel, Brian Quinn, Helen Walters: Ten Types of Innovation: The Discipline of Building Breakthroughs. Wiley, 2013

Lean Six Sigma, Service

Six Sigma In The Bloodstream

One day I was asked why I left the stable, “money-printing” ISO 9000 business to join the riskier Six Sigma environment. My explanation went something like this: “Well, I think it makes more sense to implement a real business improvement and management system than to hang a nice certificate in the CEO’s office.”

But is this statement really true? Does starting a Six Sigma initiative automatically mean you’ll have an effective Quality management system? Definitely not. The downside of this methodology is that there are currently no “standards”, nor an “official” certifying institution. There is no external body that checks whether everyone walks the talk.

Six Sigma is more than starting a few projects, training some Belts and educating some business leaders about what it all means. The Six Sigma criteria depend on the business implementing this approach.

The Criteria

Generally, Six Sigma criteria are not comparable to the ISO 9000 but to the Malcolm Baldrige National Quality Award criteria or the European Quality Award criteria. These Quality management system descriptions exceed the historical thinking of “Quality Management Systems” enormously. Companies that have won either the European or the Malcolm Baldrige National Quality Award have learned that successful Quality management encompasses business management tools including leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management and results orientation.

Six Sigma aims to pursue the same target: “Completely Satisfying Customer Needs Profitably!” (Jack Welch). Therefore the criteria of a successful Six Sigma system are similar to the Baldrige criteria. One major difference seems to be that Baldridge shows just the shell of targets within those criteria whereas Six Sigma also describes a proven box of powerful tools and a rigid way to apply them.

The trick is how to plant this concept into an organisation. Here are some steps that most companies pursuing Six Sigma must go through:

Phase 1: Enthusiasm & Awareness

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Firstly, the Leadership team of the organisation decides to go for Six Sigma. They dream of increasing its net income with huge savings, continuing to portray the image of an outstanding company and increasing customer satisfaction and loyalty, with doubts of whether these concepts will actually work. Normally the implementation of Six Sigma starts with Leadership awareness training and a couple of improvement projects. When they choose their first projects, the company either shows its Six Sigma competence by selecting business related projects within the leadership team or demonstrates the old-fashioned Quality way by delegating the task to their Black Belts or a “Quality team”.

This phase also includes the first Black Belt/Green Belt trainings. If the projects only focus on manufacturing areas, the company will limit themselves to the playground of traditional Quality improvement initiatives. Instead, it makes sense to think cross functionally and recognize improvement opportunities in all key business processes.

Phase 2: Seeking Results

Secondly, it is critical for the Leadership team to pass the first tollgate: Are they tracking results from their first projects or are they losing interest? Successful organisations install a steering committee – often called a “Quality Council” – to make decisions about projects, especially about tying their selection to business strategy and customer needs, implementing improvements, and reward and recognition.

If the leadership team shows that they don’t care, then Black Belts will not be able to produce results. And if the Black Belts do not produce results, then the leadership team will lose interest. It becomes a vicious cycle. The trigger must come from top management.

Results also need to be communicated to the entire company. It is critical to sell Six Sigma internally and convince the sceptics. Otherwise, the company will not be ready for the next phase.

Phase 3: Implementing Measures

Thirdly, results from the first projects usually include a few measures that track the results and ensure that the improvement lasts. Successful companies do add these measures to their internal dashboard and customer loyalty tracking system. Some even share those results with their customers, which builds trust.

Customer satisfaction measures are key for project selection. Unfortunately, they are not always available or used. Scorecards (comparable with Balanced Scorecards) should be implemented to tie Six Sigma implementation to the reward & recognition system and the bonus system to drive business results in terms of process improvement, customer satisfaction, employee satisfaction and net income. This kind of scorecard contains deployment and result measures.

Phase 4: Implementing Six Sigma As BAU

Finally, to build Six Sigma into the “business as usual”, all departments should be involved. Six Sigma includes a powerful tool set. This can help to improve all key business processes – including administrative processes – throughout the organisation. Additionally, there are a few key departments who need to support the Six Sigma initiative. Finance should track the costs and the benefits. Marketing/sales should gather the voice of the customer and track customer satisfaction levels. IT should support certain projects with their technical competence. And, HR must support Black Belt and Green Belt selection and development. They should include it into reward and recognition, and track and analyse employee satisfaction.

By this phase, project selection is no longer driven by the Quality leader or business leader. Individual process owners use Six Sigma to achieve their own business goals. Therefore, they dedicate resources to the effort and gain the results.

Six Sigma In The Bloodstream

Consequentially, you will know when Six Sigma is in the bloodstream of your organisation, when it will no longer be necessary to talk incessantly about it. Then, it will be part of the culture. This is probably one of the major differences between earlier improvement efforts such as TQ and Six Sigma. There will be no need to get startled by the call of the ISO 9000 auditor asking for the date of the re-certification. Six Sigma is a different mindset. There will rather be a kind of a regular internal evaluation by the leadership team assessing the status of their own management system – comparable with EFQ assessment.

Six Sigma means

  • Incorporating customer requirements into business processes,
  • Integrating business management skills into each element of the organisation effectively,
  • Analysing causes of process and output variation with statistical and non-statistical tools systematically,
  • Instilling people with the ability to get involved, and initiate, their own improvement projects cross-functional and company-wide,
  • Tracking performance honestly over time.

Leadership’s role is critical, especially at the outset, because leaders communicate and reinforce the power Six Sigma has to achieve business objectives. Without buy-in from leadership, it simply will not work. It must be reinforced from high and adopted from each internal level and process area. When done well, Six Sigma has the ability to create a truly customer focused workforce – and organisation.

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BPR, Cases, Customers, Lean Six Sigma, Manufacturing, Service

Complaints – The Tip of the Iceberg

“Voice of the Customer” – VOC in short – is a key topic in all kind of customer service, TQM or Lean Six Sigma training and related project work. There are two main categories for VOC data, reactive and proactive. Firstly, proactive data is collected with methods like focus groups, interviews, observations, surveys or test customers. Secondly, reactive data is mainly based on customer complaints, feedback, hotline data or warranty claims. The nature of the human being restricts itself almost always to negative comments through reactive data channels.

Value Complaints - They Carry Valuable Information About Your Processes

Value Complaints – They Carry Valuable Information About Your Processes

Proactive versus Reactive Feedback

Asking staff working in customer service departments about the nature of the feedback they receive from customers will result in answers like “No-one calls to tell us how good we are in delivering our service. Most of the calls – that are not questions – are more or less strong complaints.” On the one hand, this sounds frustrating, “not fair”. On the other hand, “negative feedback” is very powerful due to the fact that someone takes the time and tells us what goes wrong in our processes, hence shows us opportunities for getting better, for getting more competitive, for growing. The quality of this kind of information is usually much better than the feedback received via proactive channels like surveys due to the fact that respondents of surveys do usually not have a stake in the issue.

How do YOU feed back?
Reactive
The other day in Singapore, I had a small complaint about an SBS bus driver who did not really respect me cycling my way on the road. After getting home I took some time to recap what happened and wrote a very detailed letter to SBS to explain the situation.
Proactive
After I spent some days in a hotel in Batam, I received a survey form I needed to fill in before leaving the hotel. Did I fill it in? Make a guess…

The Value of Complaints

Customer research studies in the German financial industry some years ago have shown, that complaints normally reveal only the “tip of the iceberg”. Receiving 50 complaint letters means we get only the feedback from those people who take the time and the courage to complain. Hence, there might be about 1250 customers out there who experience a similar situation but do not complain. May be they go immediately to our competitor if they have a chance. We may never find out. Furthermore, the research has shown that there might be as much as 10 times more negative contact points with our company – like “Your call is important to us. Please stay on the line.” These negative incidents are not “big enough” for a complaint but always impactful enough to drive customers’ decision sooner or later.

Conclusion

Welcome complaints! As long as you get complaints someone is interested in your service and wants to help you improving. Behind each complaint you can expect as much as 25 times the situation that has led to the complaint and as much as 250 negative “Moments of Truth” with your company. Use this valuable and powerful information for taking actions. And, give positive feedback, too!

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BPR, Cases, Customers, Lean Six Sigma, Service, Strategy

Seven Habits … – Habit 2: Moment of Truth

The Moment of Truth is the short time frame when a customer experiences the product or service that many people have prepared often over many months. It is the moment when a small, often unintentional mishap has the huge potential to spoil the result of hard work by others in the organisation behind the scenes. Good process managers know this and put their focus on the Moment of Truth.

The Moment of Truth

The Moment of Truth

When Jack Welch explained his view on management he used to draw a company structure against the common understanding upside down. His explanation went somehow like that:

Who is the most important person for our company? It is our customer. Consequentially, the people who make or break every day’s business are the people who interact most with our customer, our front line staff. The crucial job of the lower management is to make sure their team members at the customer interface have everything they need in order to serve, to impress and to delight the customer. Every level of management has to support their team members with this purpose. My job is to ensure everyone in my company is able and willing to do his best for this objective.

For many of us this is not really new. However, the number of managers – call them process managers – who really go to Gemba for experiencing the Moment of Truth is marginal.

Is it not enough to ask your staff what is going on at the ground level, what happens at the moment of truth? Well, it would if they knew. And, it is a very normal human tendency that information gets “filtered” when it is passed from hand to hand, from level to level. Often there is a factor of guesswork added to the information.

What We Know About the Moment of Truth

Only an hour after running a very simple role-playing process simulation, the 20 managers involved in the process are asked to state the time spent on their own process steps. They merely have to guesstimate the duration for their direct involvement – a non-challenging task, one would assume. To everyone’s surprise the actual time measures more than 300% of the time estimated by the group of managers. Hence, it is not enough to estimate or guess. You need to measure in order to know.

Does this only apply to processes that are new to managers? Not at all. A Lean Six Sigma team’s project focusses on reducing the lead time for treating the customer at a routine service process. During an interim project presentation, the manager who has been directly responsible for that process for many years raised his voice after the team revealed data about the time needed to attend to the customer. He doubted the data; he could not believe that the process took as long as presented. Of cause, the team members were able to show facts… Hence, if you run a process for years, it does not automatically mean you know what happens on the ground. Customers and employees change. And so do processes.

Best Practices

Gemba is the place where your product or service is received and applied. You cannot learn about the Moment of Truth, the usage of your offerings and how well you are able to meet customers’ expectations by conducting an annual survey or by issuing some evaluation forms.

CEOs like American Express’ Kenneth Chenault know about this. He is said to spend time in American Express call centres to pick up calls from customers and listen to their requests. He surely cannot change the customer service level by answering some calls every now and then. However, he walks the talk. As a leader, he knows how important it is to observe and focus on what is critical to customers during the Moment of Truth. And, he expects his employees to “have it in their DNA”.

The former CEO of Singapore’s Alexandra Hospital, Liak Teng Lit, used to host a monthly lunch for a focus group of patients who had just gone through Alexandra’s service. He wanted to hear them out about their experience at the Moment of Truth. This way he learned about hospital processes and how his customers perceive them. Whenever possible, he would look into improving things. .

Conclusion

For managing a process successfully it is essential to know the details about the process. This can only be achieved by a set of carefully crafted instruments put in place:

  1. Make sure your process management is based on meaningful process indicators and real data collected in the right way by people who are taught to do so. Start with the Moment of Truth.
  2. Ensure that this information reaches you without being filtered or otherwise manipulated.
  3. Derive actions based on systematic and comprehensive data analysis following known and accepted rules.
  4. Publish this information in an appropriate manner so that the organisation can learn from it.

And, don’t forget going to Gemba from time to time to observe what happens at the Moment of Truth. The purpose of this is two-fold: Firstly, it helps you getting real information from the ground regularly. Secondly, it sends the right signal to your team members, your colleagues and, last but not least, to your customers.

Moreover, it is very likely that you learn something new about your processes.

Cases, Customers, Manufacturing, Service, Strategy

What You Measure is What You Get

Developing a compelling vision and mission statement as well as a sound strategy is vital for any organisation. Equally important is the translation of the strategy into the day-to-day business. This step becomes even more critical for multi-national companies with their need for regional adaptation and alignment with corporate at the same time. So, how do we make sure our mid- and long-term plans – developed in the head quarter – make sense to business leaders and employees in other regions?

BPR, Cases, Customers, Lean Six Sigma, Service

Seven Habits … – Habit 1: VOC

Ting is a sophisticated traditional Chinese character (Figure 1) that exemplifies the most important activity related to customer service in an impressive way: Listening. The old Chinese already knew that when listening with your ears, you better treat the speaker as a king, focus wholeheartedly with 100% attention.

Only by doing so you learn about your customers’ requirements, the mentioned ones and – often more important – the unsaid.

Listening Without Ting

Customer Surveys

It was early evening when I received one of these customer survey calls everyone experiences once in a while. The timing was not perfect however I decided to help this poor chap on the phone. He was just trying to do his job for his bank. Patiently did I listen to his questions trying to give him my honest rating on a scale from 1 to 10. Before we started, I had already decided that my average rating would be around 7. This does not make someone loosing face and still shows some room for improvement. Since the questions did not really touch anything that had to do with my banking experience but did rather circle around the brand value of his bank, I lost some interest. Nevertheless I installed some variation by going down to 5 and up to even 9 for some questions.

Figure 1: Traditional Chinese Character Ting. English: Listen

Figure 1: Traditional Chinese Character Ting.

When Survey Data Becomes Interesting

Only when he finally touched an area that had to do with my recent banking experience, I woke up, gave him a rather low rating and wanted to explain why. His answer was: ‘Sorry, I am not really from this bank. I am calling from a call centre and I am not able and needed to gather your verbatim feedback.’

Customer surveys are means of listening to the customer. Unfortunately, when you survey a customer he is often not in the mood to give his feedback. Most likely, he is disturbed in the middle of something more important – which is nearly everything. When you then engage a call agent – who gets paid by number of calls completed in a certain time frame – you have two people who are not interested in talking to each other. That call would be used to derive strategy, improvement actions or OD interventions. What do you think is the result of that? Where is the Ting in that?

Customer Feedback – Complaints and Commendations

Another time, I had a rather unpleasant experience with one of our banks and their incorrect statements. I sat down, took time to write a pretty detailed explanation of what happened. The bank contacted me and promised to look into the matter. Some days later they apologised and said that this was an IT issue. This would be fixed with the next release. Good.

Customer complaints related to real events are much better in quality and usually indeed useful for both, fixing the problem and improving the system. Research in the German financial sector has shown that these complaints commonly reveal only the tip of the iceberg. Behind each complaint you should expect 25 similar unpleasant events with customers who do not complain. They may just walk.

And, think about how much you pay for the surveys. Complaints come for free!

Best Practices – Ting in Action

Learning from the Great

When I joined GE Capital many years ago, one message got hard-wired in my genes from the beginning: the customer comes first. Before Jack Welch started his famous Six Sigma initiative, GE installed a thorough system for collecting and analysing the voice of the customer that was usually scattered all over the place. Every Six Sigma project presentation we did not start with the voice of the customer was prompted by our SVP with the question:

And, how does this relate to our customers?

Another best-selling question by our SVP was

Do you THINK this is what the customers want or did you actually ASK them?

Both questions needed to be answered with specifics, with facts. Commonplaces would not be accepted. Never before or after have I seen this kind of rigour in another company.

TING in Action at an SME in Jakarta

David, the MD of a medium-sized supplier company for the petrochemical industry in Jakarta, meets his direct reports every morning at 0800 for a very short update. He used to ask questions like ‘Everything ok? Anything new?’ until he found that something is missing in his company: the focus on the customer. Therefore, he decided to change this daily routine. He now starts the day with one question: ‘How is the voice of the customer?’ His team needs to mention not only issues raised by clients or observed by his staff. They also need to come with short-term and long-term solution ideas. Every day! Since they started this habit, they learned a lot more about their clients. In this company, the meaning of voice of the customer is in the bloodstream. They listen with 100% attention – and act. They know the meaning of “Ting”.

TING in Action at the Government

In the Singapore blood bank, nursing staff together with Red Cross continuously work on improving the level of customer service. They know that every donor who does not return means a lost blood bag that could be vital for a patient in one of the hospitals. Therefore, nurses and their colleagues do not rely on written customer surveys. They contact their donors in order to listen wholeheartedly to donors’ needs, to understand their concerns and to be able to serve them better. Although being a government agency, they display an exceptional level of dedication and customer focus that would do good to any private organisation.

Conclusion

Talking about the importance of the customer once in a while and running some surveys from time to time is not good enough to really serve them better. In order to achieve this you need to change the behaviour of your team members. It is necessary to install some habits.

Make it a habit, like David, to ask in your meetings with your team members ‘What is our customers’ voice? What have you done to serve our customers better?’ And, make it a habit to start the talk with your own story to highlight how you have improved the level of customer service.

If you cannot answer these questions positively every week, check whether you have spent your time wisely.

And, it would do us good to remember what the old Chinese taught us some thousand years ago: Listen with your ears wide open (and your mouth shut), by treating the speaker as a king, whilst focusing wholeheartedly and paying full attention. Listen with Ting.

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